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Computer and Data Processing Services

Nature of the Industry  |  Working Conditions  |  Employment  |  Occupations in the Industry
Training and Advancement  |  Job Outlook  |  Earnings

Significant Points

• Computer and data processing services is projected to be the fastest growing industry in the economy, with employment expected to increase 86 percent between 2000 and 2010.
• Job opportunities will be excellent for most workers; professional and related workers enjoy the best prospects, reflecting continuing demand for higher level skills needed to keep up with changes in technology.
• Computer specialists account for almost half of all employees in this industry.

Nature of the Industry

All organizations today rely on computer and information technology to conduct business and operate more efficiently. Often, however, these institutions do not have the resources to effectively implement new technologies or satisfy their changing needs. When this happens, they turn to the computer and data processing services industry to meet their specialized needs on a contract or customer basis. Firms may enlist the services of one of over 178,000 establishments in the computer and data processing services industry for help with a particular project or problem, such as setting up a secure website or establishing a marketplace online. Alternatively, they may choose to “outsource” one or more activities, such as the management of their entire data center or help-desk support, to a computer and data processing services firm. 

Services provided by this industry include prepackaged software; customized computer programming services and applications and systems software design; data processing, preparation, and information retrieval services, including online databases and Internet services; integrated systems design and development and management of databases; onsite computer facilities management; rental, leasing, and repair of computers and peripheral equipment; and a variety of specialized consulting services. Computer training contractors, however, are grouped with educational services, and establishments that manufacture and sell computer equipment are included with electronic equipment manufacturing. Telecommunications services, including cable Internet providers, also are classified separately. 

Software and professional services offered within this industry include prepackaged software, custom programming, integrated systems design, and other specialized consulting. Prepackaged software establishments develop operating system software as well as word processing and spreadsheet packages, games and graphics packages, data storage software, and Internet-related software tools such as search engines and Web browsers—the software that permits browsing, retrieval, and viewing of content from the World Wide Web. Some may install the software package on a user’s system and customize it to the user's specific needs. Programming service firms may be hired to code large programs or to get new systems up and running. Programming service firms also may update or reengineer existing systems. 

Electronic business ("e-business") is any process that a business organization conducts over a computer-mediated network. Electronic commerce ("e-commerce") is that part of e-business that involves the buying and selling of goods and services. With the growth of the Internet and the expansion of electronic commerce, some service firms specialize in developing and maintaining websites for client companies. Others create and maintain corporate Intranets or self-contained internal networks linking multiple users within an organization by means of Internet technology. These firms design sophisticated computer networks, assist with upgrades or conversions, and engage in continual maintenance. They help clients select the right hardware and software products for a particular project, and then develop, install, and implement the system, as well as train the client's users. Service firms also offer consulting services for any stages of development throughout the entire process, from design and content development to administration and maintenance of site security. 

This widespread use of the Internet and Intranets also has resulted in an increased focus on security. The robust growth of electronic commerce highlights this concern, as firms seek to attract as many potential customers as possible to their websites. Security threats range from damaging computer viruses to online credit card fraud. Services outsourced to security consulting firms include analyzing vulnerability, managing firewalls, and providing intrusion and antivirus protection. 

Information services include data preparation and processing services, as well as information retrieval services. Establishments may provide payroll processing, credit reporting, data entry services, and optical scanning services, as well as the leasing of computer time. Usually, information is collected from the client’s databases, processed, and passed to other online subscribers, to contracted users, or back to the client. With the Internet and electronic business creating tremendous volumes of data, there is growing need to be able to store, manage, and extract data effectively. Establishments in these sectors also include a number of Internet service providers. These companies provide access to end users of the Internet who usually subscribe for a set fee. 

Hardware services for computers and other data processing equipment include facilities management and operation, rental and leasing, maintenance and repair of computers and peripheral equipment. Such services usually are offered on the customer’s site, although, in the case of maintenance and repair work, equipment may be taken to repairshops and replacements left for temporary use. Miscellaneous services establishments include database development firms engaged in building and maintaining databases of critical information. Miscellaneous services also include disk and diskette conversions, hardware requirements analysis, and consulting on a contract or fee basis. 

Working Conditions

Most workers in this industry work in clean, quiet offices. Those in facilities management or maintenance and repair may work in computer operations centers or repairshops. Given the technology available today, however, more work can be done from remote locations using modems, fax machines, e-mail, and especially the Internet. For example, systems analysts may work from home, with their computers linked directly to computers at a financial services firm. Although they often relocate to a customer’s place of business while working on a project, programmers and consultants may actually perform work from locations offsite. Even technical support personnel can tap into a customer’s computer remotely in order to identify and fix problems. 

About 6.2 percent of the workers in computer and data processing services firms work part time, compared with 15.3 percent of workers throughout all industries. For some professionals or technical specialists, evening or weekend work may be necessary to meet deadlines or solve problems. Professionals working for large establishments may have less freedom in planning their schedule than do consultants for very small firms, whose work may be more varied. 

Data entry and information processing workers and others who work at video terminals for extended periods may experience musculoskeletal strain, eye problems, stress, or repetitive motion illnesses, such as carpal tunnel syndrome. 

Employment

While the industry has both large and small firms, the average establishment in computer and data processing services is relatively small; approximately 80 percent of establishments employed fewer than 10 workers. The majority of jobs, however, are found in establishments that employ 50 or more workers (see chart). Many small establishments in the industry are startup firms that hope to capitalize on a market niche.

Relative to the rest of the economy, there are significantly fewer workers 45 years of age and older in computer and data processing establishments; this industry’s workforce remains younger than most, with large proportions of workers in the 25 to 44 age range (table 1). This reflects the industry’s explosive growth in employment since the early 1980s. The huge increase in employment afforded thousands of opportunities to younger workers possessing the newest technological skills.
 

Table 1. Percent distribution of employment in computer and data processing services by age group, 2000
Age group	Computer and data processing services	All industries
Total	100.0	100.0
16-19	1.4	5.4
20-24	9.3	9.9
25-34	36.9	22.6
35-44	30.0	27.1
45-54	16.0	22.0
55-64	5.7	10.0
65 and older	0.7	3.0

Occupations in the Industry

Providing a wide array of information services to clients requires a diverse and well-educated workforce. The majority of workers in computer and data processing services are professional and related workers, such as computer systems analysts, computer engineers, and computer programmers (table 2). This occupational group accounts for 53 percent of the jobs in the industry, reflecting the emphasis on high level technical skills and creativity. By 2010, the share of professional and related occupations is expected to be even greater, while the employment share of office and administrative support jobs, currently accounting for 20 percent of industry employment, is projected to fall. 

Programmers write, test, and maintain the detailed instructions, called programs or software, that computers must follow to perform their functions. These programs tell the computer what to do, such as which information to identify and access, how to process it, and what equipment to use. Programmers write these commands by breaking down each step into a logical series, converting specifications into a language the computer understands. While some still work with traditional programming languages like COBOL, object-oriented programming languages, such as C++ and Java, computer-aided software engineering (CASE) tools, and artificial intelligence shells now are being used to create and maintain programs. These languages and tools allow portions of code to be reused in programs that require similar routines. Many programmers also customize a package to clients’ specific needs or create better packages. 

Computer engineers design, develop, test, and evaluate computer hardware and related equipment, software programs, and systems. Although programmers write and support programs in new languages, much of the design and development now is the responsibility of software engineers or software developers. Software engineers must possess strong programming skills, but are more concerned with developing algorithms and analyzing and solving programming problems than with actually writing code. These professionals develop many types of software, including operating systems software, network distribution software, and a variety of applications software. Computer systems software engineers coordinate the construction and maintenance of a company's computer systems, and plan their future growth. They develop software systems for control and automation in manufacturing, business, and other areas. They research, design, and test operating system software, compilers—software that converts programs for faster processing—and network distribution software. Computer applications software engineers analyze users' needs and design, create, and modify general computer applications software or specialized utility programs. They analyze user needs and develop software solutions. Computer hardware engineers , on the other hand, usually design, develop, and test computer hardware, such as computer chips, and supervise its manufacture and installation. One of the goals of computer hardware engineering is to design and produce computing devices that function efficiently and economically. 

Professionals involved in analyzing and solving problems include systems analysts, who study business, scientific, or engineering data processing problems and design new flows of information. Computers need to be connected to each other and to a control server to allow communication among users, thus enhancing use of their computing power. Systems analysts tie together hardware and software to give an organization the maximum benefit from its investment in machines, personnel, and business processes. To do this, they may design entirely new systems or add a single new software application to harness more of the computer’s power. They use data modeling, structured analysis, information engineering, and other methods. Systems analysts prepare charts for programmers to follow for proper coding and also perform cost-benefit analyses to help management evaluate the system. They ensure that the system performs to its specifications and test it thoroughly. 

Database administrators determine ways to organize and store data and work with database management systems software. They set up computer databases and test and coordinate changes to them. Because they also may be responsible for design implementation and system security, database administrators often plan and coordinate security measures. 

Computer and information scientists work as theorists, researchers, or inventors. They apply a higher level of theoretical expertise and innovation and develop solutions to complex problems relating to computer hardware and software. 

Computer support specialists provide technical assistance, support, and advice to customers and users. This group of occupations includes workers with a variety of titles, such as technical support specialists and help-desk technicians. These troubleshooters interpret problems, and provide technical support for hardware, software, and systems. Support specialists may work either within a company or other organization or directly for a computer hardware and software vendor. They answer phone calls, analyze problems using automated diagnostic programs, and resolve recurrent difficulties encountered by users. 

Other computer specialists include a wide range of related professionals who specialize in operation, analysis, education, application, or design for a particular piece of the system. Many are involved in the design, testing, and evaluation of network systems such as local area networks (LAN), wide area networks (WAN), Internet, and other data communications systems. Specialty occupations reflect an emphasis on client-server applications and end-user support; however, occupational titles shift rapidly to reflect new developments in technology. 

Network or computer systems administrators install, configure, and support an organization’s LAN, WAN, network segment, or Internet system. They maintain network hardware and software, analyze problems, and monitor the network to ensure availability to system users. Administrators also may plan, coordinate, and implement network security measures. In some organizations, computer security specialists are responsible for the organization’s information security.

Computer and information systems managers direct the work of systems analysts, computer programmers, and other computer-related workers. They analyze the computer and information needs of their organization and determine personnel and equipment requirements. These managers plan and coordinate activities such as the installation and upgrading of hardware and software; programming and systems design; the development of computer networks; and the implementation of Internet and Intranet sites.

Traditionally, the role of computer operators has been to ensure that computer systems run as efficiently as possible. Depending upon the size of the computer installation, they may work with mainframes, minicomputers, or networks of personal computers. They oversee regular operations and solve problems that surface within the system. Peripheral equipment, such as printers and tape drives, and the console of the computer itself must be correctly accessed and controlled. As errors arise, operators respond by resetting controls or terminating the run. In some establishments, they keep logs of malfunctions, suggest the acquisition of new equipment, or supervise and train other operators or peripheral equipment operators.

Data entry and information processing workers transfer information from audio or printed forms to a computer system. Many also manipulate or edit existing data or proofread entries to an existing database. Increasingly, data are entered into computer systems at the point of origin, as in the case of automatic teller machines and sophisticated optical character readers, which scan a document and copy the information to the computer.

Computer repairers maintain mainframe and personal computers, printers, and other peripheral equipment. They install new equipment for clients, do preventive maintenance, and correct emergency problems. Workers may also install operating software and peripheral equipment, checking that all components are configured to correctly function together. Repairers may work in both repairshops and customer locations. When equipment breaks down, many repairers travel to customers’ workplaces or other locations to make the necessary repairs. As the amount of computer equipment increases, more installation, maintenance, and repairwork will become necessary.

Due, in part, to the robust growth in electronic commerce, a growing number of other workers in this industry are in sales and related occupations. In order to compete successfully and gain customers and clients in the online world, the presentation and features of websites and other web-related content becomes increasingly important. The marketing and sales workers employed in this industry are responsible for promoting and selling the products and services provided by the various sectors of this industry.

Training & Advancement

Occupations in the computer and data processing services industry require varying levels of education. The level of education and type of training required depend on employers’ needs. One factor affecting these needs is changes in technology. As demonstrated by the current demand for workers with skills related to the Internet, employers often scramble to find workers capable of implementing “hot” new technologies. Another factor driving employers’ needs is the timeframe within which a project must be completed. 

Entry-level positions such as data entry and information processing workers generally need a high school diploma. Most jobs are awarded to those applicants with the greatest keyboarding speed and some business education. Computer operators usually receive on-the-job training in order to become acquainted with their employer’s equipment and routines but may need some postsecondary education. Some computer operator positions may require an associate degree or even a bachelor’s degree. More commonly, however, a high school diploma, previous experience with an operating system, and familiarity with the latest technologies are the minimum requirements. Completion of vocational training also is an asset. 

Computer programmers commonly hold a bachelor’s degree; however, there are no universal educational requirements. Some hold a degree in computer science, mathematics, or information systems while others have taken special courses in computer programming to supplement their study in fields such as accounting, inventory control, or other areas of business. Because employers’ needs are so varied, a 2-year degree or certificate may be sufficient for some positions so long as applicants possess the right technical skills. 

Most computer systems analysts and computer engineers, on the other hand, usually have a bachelor’s or higher degree and work experience. Many hold advanced degrees in technical fields or a master’s degree in business administration (MBA) with a concentration in information systems, and are specialists in their fields. For systems analyst, programmer-analyst, or even database administrator positions, many employers seek applicants who have a bachelor’s degree in computer science, information science, or management information systems (MIS). Computer hardware engineers generally need at least a bachelor’s degree in computer engineering or electrical engineering, whereas software engineers are more likely to hold a degree in computer science. For computer and information scientists, a doctoral degree generally is required due to the highly technical nature of their work. For some networks systems and data communication analysts, such as webmasters, an associate degree or certificate generally is sufficient, although more advanced positions might require a computer-related bachelor’s degree. 

Persons interested in becoming a computer support specialist generally need only an associate degree in a computer-related field, as well as significant hands-on experience with computers. They also must possess strong problem-solving and analytical skills as well as excellent communication skills because troubleshooting and helping others are such a vital part of the job. And because there is constant interaction on the job with other computer personnel, customers, or employees, computer support specialists must be able to communicate effectively on paper, using e-mail, or in person. They also must possess strong writing skills when preparing manuals for employees and customers. As technology continues to improve, computer support specialists must constantly strive to stay up to date and acquire new skills if they wish to remain in the field. 

Computer and information systems managers usually require a bachelor’s degree in a computer-related occupation combined with work experience. Employers, though, often prefer a graduate degree, especially a master’s degree in business administration (MBA) with technology as a core component. 

The size of the firm and the local demand for workers also may influence training requirements for specific jobs. Smaller firms may be willing to train informally on the job, whereas larger organizations may pay for formal training or higher education. For example, many of the marketing and sales workers are able to secure entry-level jobs with little technical knowledge but quickly learn the technical knowledge necessary for their company and product. With more formal education, employees may advance to completely different jobs within the industry. Education or training in a specialty area may provide new opportunities for the worker and allow the establishment to offer new services. 

As technological advances in the computer field continue, employers in all areas demand a higher level of skill and expertise. Employers, hardware and software vendors, colleges and universities, private training institutions, or professional computing societies offer continuing education and professional development seminars. Technical or professional certification is a way by which employers ensure the competency or quality of computer professionals. Certification can be obtained voluntarily, though many vendors now offer or even require professionals who work with their products to be certified. 

Voluntary certification also is available through organizations such as the Institute of Certification and Computing Professionals (ICCP) and the Institute of Electrical and Electronics Engineers (IEEE) Computer Society. Although professional certification is not mandatory, it may provide a jobseeker a competitive advantage. ICCP offers the Certified Computing Professional (CCP) designation to those who have at least 2 years of experience and a college degree. Candidates must pass a core examination testing general knowledge, plus exams in two specialty areas, or in a specialty area and two computer programming languages. The IEEE Computer Society recently announced plans to certify software engineers who pass an examination. 

The computer and data processing services industry offers advancement opportunities for all workers who keep up with changing technology. Beginning data entry and information processing workers may move to project leader, and then to first-line supervisor or to office manager. This advancement may result from work experience or from continued training and education. 

Computer operators may begin on small computer installations or supervise one aspect of operations. They may move to larger systems that run a greater number of jobs and require more complex problem-solving skills. They also may advance to become operations analysts, or move into computer operations management. These employees apply available computing power to business situations, and they research and suggest upgrades or modifications to the operation of the computer system. Some operators may even become system supervisors. Because they work closely with computer operating languages and systems, computer operators may gain the necessary experience to become programmers or customer support liaisons within their specialty. Many also seek formal education to advance to emerging occupations, such as operations analysts or network administrators. 

Entry-level computer programmers usually start working with an experienced programmer updating existing code, generating lines of one portion of a larger program, or writing relatively simple programs. They then advance to more difficult programming and may become project supervisors, or move into higher management positions within the organization. Many programmers who work closely with systems analysts advance to systems analyst positions. 

Systems analysts may begin working with experienced analysts or may deal with only small systems or one aspect of a system. They also may move into supervisory positions as they gain further education or work experience. Systems analysts, who work with one type of system, or one aspect or application of a system, can become specialty consultants or move into management positions. Computer engineers and scientists who show leadership ability can also become project managers or advance into management positions, such as manager of information systems or chief information officer. Technical support specialists may advance by developing expertise in an area that leads to other opportunities. For example, those responsible for network support may advance into network administration or network security. 

Consulting is an attractive option for experienced workers who do not wish to advance to management positions, or who would rather continue to work with hands-on applications or in a particular specialty. These workers may market their services on their own, under contract as specialized consultants, or with an organization that provides consulting services to outside clients. Many of the largest firms today have subsidiaries that offer specialized services to the host company and to outside clients. Large consulting and computer firms often will hire inexperienced college graduates and put them through intensive, company-based programs that train them to provide such services. 

Many experienced workers also have opportunities to move into sales positions as they gain knowledge of specific products. Data entry and information processing workers, for example, may represent an organization in contracting with clients to ensure proper completion of a data entry project. The emergence of various forms of electronic commerce has resulted in efforts by technical workers to make websites and content appealing to potential customers so that they become comfortable conducting transactions over the Internet. Computer programmers who adapt prepackaged software for accounting organizations may use their specialized knowledge to sell such products to similar firms. 

Job Outlook

The computer and data processing services industry has grown dramatically over the past decade and wage and salary employment is expected to grow about 86 percent by the year 2010, making this the fastest growing industry in the U.S. economy. Given the rate at which the computer and data processing services industry is expected to grow and the increasing complexity of technology available, job opportunities will be excellent for most workers. The best opportunities will be for professional and related occupations, reflecting their rapid growth and the continuing demand for higher level skills to keep up with changes in technology. 

An increasing reliance on information technology, combined with falling prices of computers and related hardware, means that individuals and organizations will continue to turn to computer and data processing service firms to maximize the return on their investments in equipment and to fulfill their growing computing needs. Such needs include the expansion of electronic commerce, a growing reliance on the Internet, faster and more efficient internal and external communication, and the development of new technologies and applications. With increasing global competition and rising costs, organizations must be able to obtain and manage the latest information in order to make business decisions. 

Within the industry, projected growth varies by sector. Among the fastest growing sectors should be client-server applications, consulting and integration services, prepackaged software, and end-user support. The demand for networking and the need to integrate new technologies will drive the demand for consulting and integration. Advances in software technology and expanding Internet usage will increase the need for software support and services. Prepackaged software has historically grown very rapidly, and will continue to grow as individuals and establishments try to capitalize on the latest improvements. Demand for support services should spur growth in areas such as help-desk outsourcing. And, as more individuals and organizations are conducting business electronically, the importance of maintaining system and network security will increase. 

New growth areas will continue to arise from rapidly evolving technologies and business forces. The rate at which the Internet has expanded demonstrates the potential effects of as yet unknown technological developments and the tremendous room for growth. The expansion of the Internet and the proliferation of websites have created a demand for a wide variety of new products and related services, including Internet and Web software, online services, Internet design services, website development, and a range of specialized consulting. Yet, the way the Internet is used is constantly changing, and so are the products, services, and personnel required to support new applications. Expanding electronic commerce, for example, has changed the way companies transact business, enabling markets to expand and an increasing array of services to be provided to customers. Business-to-business commerce is automating many steps in the transaction of business between companies, allowing many firms involved to operate more efficiently. And as the amount of computer-stored information grows, organizations will continue to look for ways to tap the full potential of their vast stores of data. Demand for an even wider array of services should increase as companies continue to expand their capabilities, integrate new technologies, and develop new applications. 

Given the increasingly widespread use of information technologies and the overall rate of growth expected for the entire industry, most occupations should grow very rapidly, although some much faster than others. As firms continue to install sophisticated computer networks, set up Internet and Intranet sites, and engage in electronic commerce, the most rapid growth will occur among computer specialists such as computer software engineers, systems analysts, and network and computer systems administrators. This group of workers also includes computer support specialists needed to provide technical assistance, support, and advice to customers and users. Rapid growth also is expected among computer hardware engineers and computer and information systems managers. Employment of computer repairers also will grow rapidly due to increasing dependence of business and residential customers on computers and sophisticated office machines. 

Employment of programmers should continue to expand, but more slowly than that of other occupations, as the proportion of programmers decreases in relation to computer software engineers and other computer specialists. Employment of administrative support occupations, including data entry and information processing workers, also is expected to grow more slowly than the rest of the industry. And, as client-server environments and automation continue to increase productivity, automated operating packages and robotic equipment should continue to reduce the need for computer operators.  

Earnings

As one might expect, education and experience influence earnings as well. For example, annual earnings of computer software engineers ranged from less than $42,710 for the lowest 10 percent to more than $106,680 for the highest 10 percent in 2000. Managers usually earn more because they have been on the job longer and are more experienced than their staffs, but their salaries, too, can vary by level and experience. Accordingly, annual earnings of computer and information systems managers ranged from less than $44,090 for the lowest 10 percent to more than $127,460 for the highest 10 percent in 2000. Earnings also are affected by other factors such as size, location, and type of establishment, hours and responsibilities of the employee, and level of sales.
 

Table 3. Median hourly earnings of the largest occupations in computer and data processing services, 2000
Occupation	Computer and data processing services	All industries
Computer and information systems managers	$42.50	$37.90
Computer software engineers, systems software	33.72	33.43
Computer software engineers, applications	33.43	32.53
Computer systems analysts	30.82	28.53
Computer programmers	29.33	27.69
Network systems and data communications analysts	28.44	26.20
Network and computer systems administrators	26.16	24.65
Computer support specialists	18.20	17.53
Customer service representatives	11.97	11.83
Data entry keyers	9.84	10.24

 
Unionization is rare in the computer and data processing services industry; fewer than 2 percent of all workers are union members or are covered by union contracts, compared with 14.9 percent of workers throughout private industry.

Source: Career Guide to Industries, Bureau of Labor Statistics

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