One Australian IT shop that has proven it can innovate with a decreased budget is car company Nissan.
While most of the car maker's international IT operations have been outsourced, Nissan has kept its local operations in-house simply because it is one part of the organization that has demonstrated a high level of innovation and has consistently performed.
The IT department of Nissan New Zealand merged with the Australian operations four years ago, developing in-house applications that are used around the world.
Bandu Dissanayake, the company's national IT systems development manager, said locally IT is kept in-house because it proved so cost effective, although overseas IT departments were outsourced.
"Globally, even in the US, Japan and South Africa, Nissan outsources its IT operations," Dissanayake said.
"Basically Nissan Australia was seen as having a low operational cost - the Nissan global standard to maintain an IT shop is 1.5 percent of total annual budget but Nissan Australia sits at 0.4 percent.
"We now have only one person staffing New Zealand - we previously had 12 people in New Zealand but as a result of consolidation there are now 23 IT staff in Australia - about 12 people within application development and 11 people for infrastructure development."
Nissan Australia uses Software AG's Adabas database for vehicle distribution, warehousing, spare parts and warranties and forecasting; SAP for finance and Niscom for front-end dealer systems.
The company also uses Software AG's program generator product Natural Construct to ensure all applications developed in-house have a consistent look and feel.
So why did Australia prove to be so cost-effective?
The company's database administration manager Steve Hogan said all internal IT development is done on a business-needs basis only.
"By ensuring business drives our development, load costs are kept to a minimum," he said.
"Even though Nissan has outsourced its IT shops on a global basis, we have been so economical with our IT budget that our team has been allowed to continue.
"With only a small team we can develop systems quickly; it would be very hard for an outsourcer to compete."