Offshore outsourcing can benefit Australia, says new report

Dec 9, 2004: Offshore outsourcing has the potential to create new jobs for Australians, provided the ICT industry can assertively position itself as a destination for offshored work.

That is according to a new report by the Australian Information Industry Association (AIIA), which found that offshore outsourcing represents a significant structural challenge for the Australian ICT industry with potentially profound and far-reaching impacts for both individuals and companies alike.

The report, for which the AIIA claims to have canvassed the opinions of senior executives in Australia's leading companies, software and application developers and key ICT policy influencers, found that despite the widely held belief that offshore outsourcing threatened many jobs, there is also potential for new jobs to be created from the phenomenon.

Speaking at the Offshore Outsourcing Summit in Sydney, the AIIA's Chief Executive Officer, Rob Durie said: “The over-arching priority of AIIA, both in publishing this research and in its policy deliberations, is to assist both local companies and multinationals take advantage of the global sourcing phenomenon."

Durie then criticised other media commentators for painting a grim picture of how offshore outsourcing would affect Australia.

“We also determined that, rather than follow the lead of other reports and commentators which have sought to tell the industry how it should respond to the challenge of global sourcing, we would ask our customers their intentions and the implications for our industry.”

Durie said that while the study had shown that Australia had been relatively slow to adopt the global sourcing model, technology buyers possess a pragmatic view of offshoring, and that where it is a sensible alternative for their organisation, they will use it, with little or no consideration for ICT industry implications.

In response to the report, AIIA has developed ten recommendations that seek to address the challenges of global sourcing from both an industry and personal perspective. The recommendations cover a number of areas, including issues surrounding aggressively promoting Australia in the US and Western Europe as a destination for offshore work by both local Australian companies and Australian branches of multinationals, as well as assisting SMEs to identify core capabilities and workload capacity, and providing feedback on their best offshore strategy.

Additionally, there are recommendations on assisting displaced workers to retrain and re-enter the workforce, ensuring a supply of new workers with the skills required to attract offshore outsourcing to Australia, as well as on issues specifically related to the needs of Australian SMEs; the capture and leverage of IP and strategic alliances.

The full report can be downloaded from www.aiia.com.au

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