TechnologyOne forced into overseas R&D

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.

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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

Luke Hopewell

About Luke Hopewell

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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8 comments
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  • Why not to say truth that it's just cheaper to have offshore dev centre ... We have enough IT graduates here in Australia. They just want to support Indonesian economics instead of Australian ...
    billconnan
  • @billconnan. WHile i too usually doubt these stories, i have friends who work in management at tech1 who have been telling me for some time that they are unable to get the devs they need locally. At any price.
    gr1f
    • I have to agree. The numbers are too few and the decent ones are getting harder to find. IT courses are just not popular in Australia anymore and it used to be the courses overseas students did. Now with overseas students drying up, many universities have reduced or even cancelled IT courses. This too is a known fact.
      Azizi Khan
      • Australia has a great Permanent Resident immigration program visa for IT engineers. And it's quite popular, as well as ordinary working visa too. So stop talking that it's not possible to get IT staff here, or invite from overseas. Even this students from Indonesia will certainly be happy to work here, and in this case it will be support for our Australian economic.
        billconnan
  • thus you will reap !
    For years we have protested against the use of overseas contracting companies in IT. When you see your job heading OS, and big IT companies with few permanent staff winning tenders then using 90% contractors to fill roles.
    Some schools are flooded with OS students that courses are steamlined for them - money talks and IT is not one as a business graduate will be more suited to "managing" IT ( they might have no idea but they are in charge) so there is no room for advancement.
    I have not recommended to any student to take up IT when there is no future here for them in Australia, as the IT moved to Singapore and as the accountants rule the board rooms looking for that 3% increase in profits yearly.
    Hideous62
    • hopefully the situation will change with the salary rise for software-engineers, as for today it's not in the same range as for "usual" engineering professions
      billconnan
  • This is completely crap, i dont accept the fact that they are not enough IT graduates in australia.  If you look at the statistics, there are more than 20,000 It graduates coming out of the universities, forget about tafe. the company just wants to do it offshore to save $$$$ and wants to give a reason that they are not geting enough graduates. i know my mates who are still looking for jobs in brisbane who have completed masters in IT. There is a technologyone office in toowong suburb in brisbane. i myself was looking for a job  for almost an year after graduating and then decided to move to sydney and now i have an awsome job.  i still now know atleast 7 people who are looking for a job in IT. I will challenge the chairman that more than 20,000 graudates come out of australian universities.
    Kash007v
  • I know someone who works for TechOne and the reasons stated here are lies. This is a clear case of "Right shoring". For 1 programmer here, they can hire 5 in Bali. TechOne used to be a great company, now its turning into a parody of a Dilbert cartoon. They are hiring managers and sacking workers. Everyone just sits in meetings all day and the front-line people are given more and more work to do. The managers are spending all their time worrying about reports, and the best people have already left.
    al@...