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Outsourcing fallout hits Canberra digs

Outsourcing fallout hits Canberra digs

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Recent changes to the Federal Government's WOGIT (Whole Of Government IT) policy will fail to save XSI's Canberra offices, which will be scaled back as a result of the Government's outsourcing policies.

Max Goldsmith, general manager of XSI, revealed late yesterday the company's Canberra office will withdraw its data storage services due to loss of government business after the implementation of the Federal Government's contentious outsourcing policies.

"My Canberra manager says we are never going to get government business again. We've got an engineering presence down their now and that's about all," says Goldsmith.

XSI had enjoyed a strong presence in the Canberra market, but the Government's failure to renew its IT supply contracts dealt the company a heavy blow. According to Goldsmith, most government business has now gone to large multinational companies.

"XSI specialises in data storage and the Government wants to outsource to a company that can organise all of their IT needs," Goldsmith says.

XSI were told by government officials that they could do nothing to help the company and advised contact outsourcers in the process of bidding for tenders.

According to Goldsmith, these large companies "don't want to know about a small Australian business", regardless of its expertise or track record, preferring to deal with large international companies.

"If they want storage, they go to EMC's Australian branch. They like to stick with the multinationals where the relationships are international," Goldsmith said. "They just don't want to take the risk on a small company, even though we have been in business for 17 years and have an excellent reputation."

Despite recent changes to the Government's outsourcing policy, Goldsmith doubts XSI will win back the business it has lost through any new business it might gain from successful tender bidders.

Industry reaction to the Government's shifts in IT outsourcing policies has been varied, as businesses attempt to assimilate how the changes will affect their operations.

Australian outsourcing company Ipex, which bid successfully for the Group 8 tender, regards the changes as a legitimisation of its split-level approach to departmental IT requirements.

"We approached outsourcing using a dual approach of fulfilling the technological requirements and fulfilling the requirements of the department," Ipex managing director Joel Schwalb said. "We made sure the department heads knew exactly what the IT solution we designed consisted of, so they knew what they would be working with."

Schwalb believes the changes to the Government's policy were a necessary progression.

"People are calling it a disaster for OASITO. It is not a disaster, it is natural to review the implementation of an outsourcing policy whether you are a government body or a company," he said.

He is also concerned that media hype has focussed on a personal attack against the Minister of the Department of Finance and Administration, rather than on the policy changes and how these will affect the IT industry.

"Clearly the changes will open up more of the business to mid-size Australian companies," Schwalb said.

Meanwhile, another prominent IT services provider, Com Tech, reports any changes to the Government's outsourcing policies will not affect its Canberra office which will remain open.


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