Offshoring — here to stay so get used to it

Offshoring — here to stay so get used to it

While Australia enjoys a privileged position, both as a leading source of IT related investments and as a location for innovation, its position in the context of our broader region is going to change significantly over the next few years.

The reasons for this are simple — India and China. While these two countries account for almost 40 per cent of the world’s population, they are currently just a small part of the IT marketplace. The shifting patterns of IT investment in these countries alone will shake the market, not just in Asia but across the globe.

There are two aspects to the market opportunities in India and China. These are domestic demand (stronger in China) and offshore service provision (stronger in India). So what is the impact of offshore service provision?

Offshore outsourcing is here to stay. Regardless of what government, industry organisations or the media say on the issue offshore service provision is rapidly becoming part of standard business procedures and reviews. This does not mean that all services will go offshore.

The negative reaction is often due to the failure of the vested parties to understand the dynamics of the market. Although some jobs are going offshore, there is the potential for local industries and investment agencies to promote Australia as a global or regional centre of best practice.

Several multinational IT service providers are already doing this.

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