According to Meta Group executive vice president Howard Rubin, there's a substantial increase in the use of outsourcing providers and external contractors especially for new software development work.
"Offshore outsourcing is definitely up. These companies have found methods for mitigating risk and have compiled a substantial list of strong customer testimonials," Rubin said.
While India continues to be the preferred offshore country, with more than 500,000 knowledge workers, Rubin cited Russia, the Philippines, Ireland, Israel, and China as upcoming countries to watch.
At the moment, on a worldwide basis, Meta says an average of 40 percent of new software development work is outsourced (offshore or otherwise).
So, the $64,000 question is how do we compete against these countries. I've heard several innovative ideas but the best would probably be Craig Baty's suggestion of "the Australian way".
Baty, group vice president and chief of research at Gartner, said the government should be selling Australia as an outsourcing destination.
"The reality is that outsourcing is here to stay so we should be looking at high-value services the country can offer as opposed to basic services such as call centre functions and software development," he told ZDNet Australia in a recent interview.
He said while Australia has been successful on the tourism front, a new kind of marketing is required to portray the "other side" of the country. The Asia-Pacific region isn't short on examples -- Malaysia's Multimedia Super Corridor and Singapore's SingaporeOne initiatives, for instance, created thousands of jobs.
I couldn't agree more with Baty. You can't fight fire with fire so trying to counter offshore countries on cost is out of the question. With federal elections next year, perhaps it's time to pressure the government of the day to ameliorate the effects of outsourcing.
Do you think the federal government should be marketing Australia as an outsourcing destination? Send your comments to itmanager@zdnet.com.au.
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