Considering the destination as an IT Outsourcing provider Australia is ranked by most analytics as one of the best place in the developed world to base software development operations. (The Indian boutique IT vendors have already opened their centers in Sydney city and Melbourne locations along with IBM, Accenture and EDS). According to countless reports, Australia coming right after Canada in terms of setting offshore R&D and delivery centers. The reasons are clearly evident, low-cost and highly skilled multilingual IT resources combined with advanced IT infrastructure and business-friendly regulations and laws promote country as an attractive and low-risk outsourcing destination.
The latter one (low-risk) is especially important in the modern world, where realities of politically, economically and socially unsafe world have influenced on outsourcing decision process, and investor and clients' interests are no longer motivated by only English language skills and high-numbers of unemployed locals. In turn, the ability of outsourcing supplier to ensure that customer's sensitive data and processes remain safe has been included into offshore strategic planning and considered as the main diferentiator.
According to the main trends for outsourcing for next years by Black Box Research there is an increased role of safety and vulnerability measurement which can promote Australia as one of best outsourcing locations for operating with low downstream risk.
With India has been hit hard by 2008 terrorist attacks, accounting scandals that rocked an Indian outsourcing industry and increased attrition and labor cost levels there is a good opportunity for destinations such as Australia, Canada and Mexico to attract US investors and clients. However, growing US unemployment has already driven domestic wages much below where they previously were.
as a buyer....
From other side as it was specified in previous answers the discussions of the growing market in IT outsourcing in Australia has been stimulated by decisions of several biggest corporations and the Australian government to outsource their IT operations. Australia's state governments adopted outsourcing 10 years ago to reduce costs and improve services. This year, the Australian Taxation Office announced it plans to shed thousands of full-time jobs and drastically increase outsourcing as part of a new efficiency drive. The National Health and Medical Research Council (NHMRC) have signed long-term outsourcing deal as well.
It also worth to mention that over 40% of information and communication technology purchased in Australia is by government. With this kind of leverage, what the government purchases has the potential to determine the shape of an Australian information and communication technology (ICT) sector.
In general, Australian outsourcing market is still smaller that in leading developed countries, but it is gathering momentum, and its value may increase significantly in next few years. This is due in part to the fact that the market does not shy away from innovations and large-scale contracts. Australian firms now have a better understanding of what could be outsourced and how it should be outsourced.
The fact that world-known ICT industry exhibition CeBIT 2009 has been organized in Australia already shows a positive signs to the development of industry in the region. With the ICT industry worth an estimate of $123 billion a year (ABS 2008), CeBIT Australia connected local and international key players of main business sectors to find out how to achieve long and short term savings through technology-based business solutions.
However, recently I came across one interesting debate called "Stop Outsourcing Australian Jobs" criticizing the Coalition's IT Outsourcing program that effectively excluded participation of Australian IT companies in government projects bidding resulting in the high level of fear about job security among Australians. In response, Labor has announced a set of measures to improve procurement process and pursue enhanced opportunities for domestic suppliers to bid for government business.
Summarizing I would vote for Australia as IT Outsourcing buyer, due to its belonging to developed nations circle therefore with higher cost of IT services than in other emerging outsourcing destinations, however world events in 2008 have irreversibly changed risk/reward calculations and outsourcing decision making process, and Australia has enough potential to ride the second (or third) wave of outsourcing.
Tags: outsourcing