Tuesday, 2 December 2008

Gershon review may open Australian public sector to offshoring

(By Anthony Miller) The Aussie media is buzzing with the news that a recently published review (see here) of the Australian government’s use of ICT, conducted by our very own Sir Peter Gershon, will open the doors to public sector offshoring. The Australian government spends about AUD 6bn (c. £2.5bn) p.a. on ICT. The covering letter from Gershon to the Minister for Finance rings hauntingly familiar:

“At the heart of my findings is a conclusion that ... the current model of weak governance of ICT at a whole-of-government level and very high levels of agency autonomy ... leads to sub-optimal outcomes in the context of prevailing external trends, financial returns, and the aims and objectives of this Government. While ICT has undoubtedly benefited government administration and the delivery of key public services ... benefits realisation and the measurement of benefits arising from investments in ICT are areas where there is substantial scope for improvement, together with measuring and improving the efficiency of current ICT operations."

In my opinion, Gershon’s recommendations on offshoring are muted:

“The potential for outsourcing ICT-related activities to lower cost countries with highly skilled workforces is already being utilised by many private sector organisations to improve their competitiveness. For governments, more complex trade-offs have to be made when considering whether ICT-related activities should be undertaken offshore. However, even if political considerations limit the activities to onshore locations, there may be scope for deploying government ICT work to reinforce regional economic development policies.”

However, Wipro in particular took heart from these comments, with their Asia-Pacific head of sales and operations, Rajat Mathur, quoted as saying that Gershon’s recommendations will give Indian SIs the chance to bid for public sector work in all areas outside of defence. If so, this will surely give a strong incentive for UK government to follow suit.

By the way, there was an excellent programme on R4 last night on the NPfIT called ‘Wiring the NHS’. You can find the iPlayer link here.

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