Australia wins and loses from offshoring, says Gartner

Australia continues to be a major beneficiary of offshoring by global companies but research company Gartner Inc. warns it is an...

Australia is a major beneficiary of offshoring by global companies, but it is not doing enough to exploit its position, according to industry analyst Gartner.

While India has attracted the most attention for hosting offshore projects, Australia is in the unique position of offering skills for higher-level or management-related onshoring tasks, but the government is doing nothing to capitalise on the skilled IT workforce, quality of life and proximity to South East Asia.

Currently the most popular outsourced tasks to India are entry-level programming or data entry and call centre positions, jobs that analysts believe will be the first to be hit by automated software.

Gartner vice-president Rolf Jester said the government is doing nothing to promote Australia as a haven for onshoring tasks. Jester said he thought the government should be directly involved, to both promote Australian talent overseas and increase domestic business.

"Rather than an offshoring contract hinging on labour costs, you have to look at how you can sell your complete service. There are plenty of international subsidiaries in Australia, but currently no indigenous success stories," said Jester.

He said that tax incentives offered to overseas companies looking to onshore to Australia would be one way to attract business; however, the government had largely overlooked this opportunity.

Gartner senior vice-president Bob Hayward said if Australia was not seen as a destination for offshoring, IT services could ultimately suffer, with the result that there would be no strong, indigenous IT base.

He said he considered the best way to grab market share was by offering tax incentives for companies to offshore to Australia.

"The whole issue of offshoring is emotional and traumatic because people lose their jobs, but it would be worse to not create new jobs," said Hayward.

"Unfortunately, there are no votes in the IT industry for the government and the population has a different view of offshoring - one in seven people in the US had a negative reaction when they found their call centre was in a foreign country, but [only] one in 100 said they would pay more per call to access a local contract centre."

Michael Crawford writes for ComputerWorld

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