IT Consulting v Investment Banking Tech
Hi guys, im curious about working in IB tech either as a Business Analyst or a developer. So what are the differences between these two careers (IT consultancy v IT IBanking) primarily in terms of future earning and career prospects 5-10 years in, is it possible to move across at some point? Also interested in working in either Australia or US (California/NYC), is it easy to move, or is it easier from one as apposed to another?
Anything I should consider when choosing one over another?
Thanks
Also a little interested.
I would imagine if your goal is to be a great technology person (maybe end goal of CTO or CIO of a company):
Google, Facebook > Microsoft, IBM tech stuff > IT consulting > Bank tech sector > Random Fortune 500 tech > random small business tech
I honestly don't know though so I could be really off base
I actually had to make the same decision and went with IT consulting. I think you just gain a lot more experience. Plus you can always go into Tech at IB later but from what I have read, you don't want to go into consulting as an experienced hire (you don't have any network which is so important to get on a good project)
(Disclosure: I'm been doing IT jobs in the finance space for about five years now. While I'm learning about LBOs and M&A, don't ask me to put any models together :) )
It depends on what your end goals are and what you think you'll enjoy doing more for 8+ hours of your day. From reading the threads on here and some personal experience I've gathered over the years, it seems that politics in the finance world are similar to that in the IT world. Most places (even tech companies like Google, Facebook et. al.) consider IT to be a cost-centre, so the big bonuses people get in IB, PE or HF universes are pretty atypical in IT and waves of outsourcing periods can make things scary for people, especially developers. (The highest I've heard is 15% of salary, which, from my understand, is pretty low in comparison to IB world.)
Compensation as an IT consultant is tricky. If you're good, compensation will be just as good or better than typical compensation for senior folks in finance. (I know consultants who make over $250K salary, some of the really good ones make close to $500K annually, but that involves a lot of work, being pretty damned skilled and having awesome contacts to land a gig like that.) The problem is that (a) you don't get benefits of any kind, so you'll have to pay out-of-pocket for medical/dental/vision/401K/etc. That adds up really quickly and can definitely eat at net profits, (b) it still gets taxed; if you're not smart with your contract, you could actually get taxed MORE than a typical FTE, (c) those same senior (and some not-so-senior) people in finance tend to make variably-sized killings from bonus pay at year end, and, most importantly, (d) it's not guaranteed. If your contract is cut early, you'd better get crackin on finding a new gig as you sure won't be getting severance pay.
All in all, it's a pretty good way to make a great living if you want to continue doing technical-level work (like programming), but it's not as "safe" as working in finance. (It was the obvious route to go back in the .com era, as people were making absolutely insane money doing absolutely nothing and the people that knew something could retire early.)
I disagree. From my experience, it is significantly better to become an IT consultant after three to five years of experience in a particular domain. If you land good jobs and do good work, you'll not only be much more sellable (it's easier to get leads with headhunters or a consulting agency, and they both look at resumes first and foremost) but your initial hourly rate will be much higher as you will probably be considered an expert or at least a point reference on a subject coming in. Additionally, most companies hire consultants for very specific project work. As such, they expect that you'll know how their environment works (generally) and how to improve on it based on former experience. This is hard to get without having been full-time for a while and growing into a role. Finally, even if you do start as a consultant, it is much more likely that the work you'll be starting out with will not be as "valuable" (impacting) as work going to an experienced person.
(All of the consultants I've worked with have been full-time employees for quite some time before entering the consulting world.)
I'm more referring to consulting with one of the larger consulting firms (Accenture, PwC etc.). I don't know much about being an independent consultant but I sure can see how experience is a necessity. No one is going to trust a recent college grad with no experiences.
On the other hand, based on what I've learned from alumni's at the larger consulting firms and my own recent interviews, these firms seems to hire disproportionately large number of recent grads at the lowest level. The firms believe that any skills and experiences you lack can be taught or gained through the team based engagements. Since the firms all have a high turnover rate, you are likely to be able to rise up the ranks fairly quickly (that is if you still want to stay which a lot of people don't for various reasons).
You can also be hired into the higher level as an experienced hire but you are expected to take the greater responsibility pretty much immediately while you still lack the experience with the processes used by the firm. In addition, since the Grads can rise up in rank in a short time period, you may be supervised by someone with a lot less experience than you. Not the position you want to be in....
Also at least Accenture has pretty good benefits, better than most of my friends including those that are going to work for IBs.
Sorry for the bump, but I'm in a similar situation, trying to pick between an IT Consulting firm (looking to go into IT strategy), or IB Technology. PWC vs JP Morgan for example. I want to eventually exit into IB Tech, but should I start there or start in consulting and move there?
I'm also thinking about going into investment banking itself as I have good technology experience, but want to gain knowledge on the other side, plus the exit opportunities are very good.
What exactly do you mean by IT Consulting? I have been in an "IT Advisory" role at a Big 4 for an internship and it was really dumb. It didn't appeal to hardcore IT people or Finance people. Feel free to PM me with some more details and I can see if I can be helpful.
Some firms use IT Advisory, some use Consulting, but it is essentially the same thing from my understanding. But you are speaking about exactly what I'm looking into. I'll shoot you a PM soon.
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