SIC 7371 Computer Programming Services

 
INDEX
FREE EXCERPT

SIC 7371

This industry consists of establishments primarily engaged in providing computer programming services on a contract or fee basis. Establishments of this industry perform a variety of additional services, such as computer software design and analysis; modification of software; and training in the use of custom software. Mass-produced software development is discussed under SIC 7372: Prepackaged Software.

NAICS CODE(S)

541511

Custom Computer Programming Services

INDUSTRY SNAPSHOT

According to the U.S. Census Bureau, the custom programming services industry achieved revenues of more than $61 billion in the mid-2000s, making it one of the largest segments of the broader information technology (IT) services sector. The industry grew rapidly during the 1990s, as businesses upgraded and expanded their computer systems. Although annual growth was uneven from 1990 to 1998, ranging from as low as 6.8 percent in 1992 to more than 28 percent in 1998, the industry's gross receipts climbed during the period at a compound average of 13.6 percent a year, based on U.S. Census Bureau data. However, the surge in the late 1990s was fueled in part by one-time Year 2000 (Y2K) compliance services, Web-enabled applications, e-commerce, and the overall dot-com craze.

During the early 2000s the IT industry was hit hard by the economic recession, and the software design industry struggled, along with the larger IT industry. These difficult times were due to a slack economy and a decrease in technology spending within the corporate sector as corporations tightened their belts and canceled or postponed any new projects or upgrades. However, by the mid-2000s the economy had revived and IT was growing once more. Advanced technology, Web-based designed, and customizable out-of-the-box software was influencing the industry.

ORGANIZATION AND STRUCTURE

Among the industry's top players, such as IBM and EDS, custom programming services are only one of a multitude of IT services offered, ranging from consulting and training to systems integration and facilities management. Indeed, the broader IT services industry has increasingly evolved toward a one-stop solution model, where a single contractor provides a comprehensive set of computer services to its clients. As such, many nongovernment statistical sources, and often the companies themselves, do not separate custom programming from these other activities.

Custom programming services are used primarily as an alternative to using packaged software unmodified and hiring in-house programming staff to write custom software. The first use is noteworthy as a reminder that packaged software is often modified by third-party vendors for specific businesses; not all custom software work begins from scratch. The second use highlights that the industry is closely associated with outsourcing technical functions. In fact, it is sometimes described as the IT outsourcing industry.

A separate and popular way for companies to obtain programming services without committing to maintaining an in-house staff of programmers is to contract for leased or temporary programmers and consultants. Several large national agencies have special units devoted to placing experienced technical workers. However, unless the contracting firm is itself a programming services provider, such activities are considered outside the scope of this industry.

A variety of trade and professional organizations represent the industry. Among others, the National Association of Computer Consultant Businesses (NACCB) and Independent Computer Consultants Association (ICCA) have members involved in contract programming. These trade associations represent their members in different ways. NACCB, headquartered in Washington, D.C., lobbies government officials on behalf of member businesses. ICCA is based in St. Louis and offers certification exams. Successful completion of a computerized test allows a member to be designated a Certified Computing Professional.

BACKGROUND AND DEVELOPMENT

As computer systems became commonplace in businesses and other organizations, the need for custom programming and other computer programming services...

To continue reading

FREE SIGN UP