CeBIT: Offshoring stance defined

The Australian Information Industry Association (AIIA) will actively campaign against any political party attempting to ban IT offshoring.

AIIA chief executive, Rob Durie claimed the Labor party wanted to limit offshoring to where it is not economically justified, which was not the same as a ban.

"We are not in favour of a ban," Durie said.

Software developers and the rest of the IT sector in Australia needed to raise their game if the country was to make the most of the opportunities and avoid the threats presented by this globalising trend.

The AIIA released a survey at CeBIT in Sydney this week which showed that about 12 per cent of businesses had already offshored some IT work, typically software development or software design, with a further five per cent looking to do so this year.

Durie said offshoring was in its early stages in Australia, meeting both strong support and passionate resistence.

About 76 per cent of those who offshore already said they did so to save money, 65 per cent did so for better quality and 35 per cent for better innovation.

However, the survey found many barriers to offshoring, including the fact that two-thirds of Australian businesses prefer to deal with local suppliers.

Concerns also included quality (35 per cent), project management (46 per cent), unproven cost savings (39 per cent) and language or cultural issues (43 per cent).

The CIOs and IT managers surveyed also had strong views about offshoring - a third would not considering offshoring at all.

About 27 per cent also said government agencies should be banned from sending application development work overseas in order to protect jobs.

However, only eight per cent want the Federal Government to outlaw the strategy completely. And 15 per cent said politicians should not get involved in the issue.

Offshoring was not just a cost issue, Durie said. It also offered opportunities for Australia.

He repeated government findings that Australia currently benefits from offshoring as it got work from Asian-Pacific and US organisations. Consequently, IT businesses needed to concentrate on quality and Australia needed to promote itself, Durie said.

The government had a role to play through R&D incentives and tax credits, he said.

"There's a risk but also a tremendous opportunity," Durie said. "Right now, we are a winner but what happens over the next five years? We need to promote our abilities. We haven't done what the Indian companies have done, or the emerging companies in Eastern Europe. We have to lift our game."

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