Why outsourcing should be regulated in Australia

The answer was an overwhelming yes--approximately 98 percent of respondents to an IT Manager Australia survey welcomed some form of regulation and said Australia should follow the United States' footsteps.

In March 2002, legislators in New Jersey introduced a ruling that imposed a "Buy American" stamp on all purchases in the state. According to the Bill, only US citizens and legal permanent residents are allowed to work on state services contracts. Other states, including Connecticut, Maryland and Washington, have similar anti-outsourcing bills.

So, why is legislation the only way out? "Because everything else has failed", said IT Manager Australia member, J. Adams.

"Once a position is outsourced, companies won't turn around and replace it with a permanent slot [down the road]," he said.

A victim of outsourcing, he urged the government to 'stop the rot'. "We're gonna lose more of our skilled IT workers to other countries if this continues, simply because there aren't enough jobs," Adams said.

However, according to some respondents, this is already happening, and in fact, may be worsening.

Valiant Wooi, a veteran IT professional with Asia-Pacific experience, said for the first time in his life, he visited the unemployment-benefits office because he simply could not obtain any work in Sydney, even on a contract basis.

Wooi, who has been on the job hunt for the last three months, said his next option was to relocate to Canberra for government-related technology positions.

"We need to create a union very quickly in order to be able to represent IT workers in Australia and we need to impose high tariffs on outsourcing to foreign countries...we need some protection and representation and I need my job back," Wooi said emphatically.

More outsourcing woes
Apart from the loss income as a result of offshore outsourcing, members raised three areas of concern:

• cross-border project management
• security
• data management

"I've worked on projects where the workload was split over two states, within one country speaking the same language, and the synergy was poor. It was extremely difficult to make people work together that weren't there on the ground," said IT Manager Australia member, Josef Szeliga.

"I'm sure outsourcing looks good on paper for management, especially in the short term, but project development involves [consistent] close consultation, as well as an understanding of corporate culture...and sometimes, local politics," Szeliga said.

He likened outsourcing to the issues that can occur when using proprietary software and hardware: "Once you go down that road, your supplier can keep increasing the cost because you're locked in and change would only incur huge expenses that any manager would be embarrassed to put forward."

In terms of security and data management, one member said: "You would lose all control of your data because of the sheer physical distance between the user and the network management staff."

According to Brian Richardson, any large organisation would need to retain one of its own staff at the site where the data is maintained so the organisation can retain sovereign ownership of its corporate data.

"Organisations that outsource overseas are going to be faced with the same degree of network security concern faced by the Australian Defence Forces Signals Group when Optus was seeking approval to transfer ownership of their satellites to Singapore Telecommunications," Richardson recalled.

What's next?
Can outsourcing laws save us from this twisted form of globalisation? Not according to the Australian Computer Society (ACS).

"The outsourcing issue will not go away by legislation, at least not in Australia...and the Government will not consider such an approach," Richard Hogg, ACS national president told ZDNet Australia in an e-mail interview.

"We do not support protectionism although we support 'Buy Australian'," Hogg added.

He said the US states were able to legislate because of population (size).

Hogg pointed to the need for "a better understanding of the long term outcomes of outsourcing so we can use this to provide input into policy direction that will provide education and jobs for our children and beyond."

Hogg said businesses need to appreciate the long- and short-term benefits that will accrue to the Australian economy by supporting the local ICT sector.

Editor's note: The outsourcing survey was conducted via the IT Manager Update weekly newsletter. IT Manager Australia has less than 10,000 members.