TechnologyOne forced into overseas R&D

Summary:A declining number of IT graduates in Australia is forcing TechnologyOne to look offshore for staff, with the company announcing plans to open an offshore research and development (R&D) centre in coming months.

A declining number of IT graduates in Australia is forcing TechnologyOne to look offshore for staff, with the company announcing plans to open an offshore research and development (R&D) centre in coming months.

Graduate hat toss

(The hat toss image by David Michael Morris,
CC BY-SA 2.0)

Speaking to ZDNet Australia yesterday, TechnologyOne's executive chairman Adrian Di Marco said that he expects to hire between 100 and 200 staff for an R&D centre based outside of Australia in the Asia-Pacific region in the next two years.

"We'll start the trials in the next couple of months ... to prove the concept and then we'll start to grow that. We expect to have 100 to 200 staff in the Asia-Pacific research centre in the next two years," Di Marco said.

"We don't have anywhere near the number of IT graduates coming out that we'd like in Australia," said Di Marco. "If we want to continue to grow the business at the pace we're growing it, will we be able to fulfil the [R&D] needs here in Australia? The answer is no."

While Di Marco didn't say where the new R&D centre would be located, he said that countries like Indonesia had attractive numbers of new graduates.

"We want to make sure we're tapped into another pool. Indonesia, for example, have 20,000 IT graduates a year coming out of there ... that's a big pool we can tap into," he said, adding that the new centre would focus on providing back office support to customers, leaving the Australian centre free to focus on product development.

Part of TechnologyOne's product development includes the re-architecture of its products to work faster and more efficiently on its new cloud-based software suite, dubbed C2.

"The original plan was to have early prototypes and proof-of-concepts shipping [by mid-year], which we are starting to get out there and we'll start to see the first few products come out later this year and we'll progressively release them over 2012 to '13."

Di Marco said that the development of C2 is part of TechnologyOne's future investment strategy that has already yielded results for the software and services provider.

TechnologyOne yesterday reported a half-yearly net profit before tax increase of 33 per cent, up $2.2 million to $9.1 million. Revenue is also higher, up $12.4 million to $71.6 million.

Di Marco said, however, that despite the strong result, TechnologyOne's UK beachhead continues to be a drag on the business.

"We've had some expansion [in the UK] but it's just a difficult market. The GFC is still unwinding over there and we still think it'll be a couple of years before the UK will come out of its depressed levels. I think it's one of those markets that we'll persevere with. We don't see any immediate relief in the UK for a couple of years to be honest," he said, adding that the UK arm had lost roughly $1.5 million in the last six months.

Di Marco remains optimistic on the region's prospects, however.

"We've got good people and good customers over there. You've just got to see through these things and [understand] that the next couple of years will be painful, but once we get through it'll be a good market for us."

Topics: IT Employment, Government, Government : AU

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A fresh recruit onto the tech journalism battlefield, Luke Hopewell is eager to see some action. After a tour of duty in the belly of the Telstra beast, he is keen to report big stories on the enterprise beat. Drawing on past experience in radio, print and magazine, he plans to ask all the tough questions you want answered.

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