Further offshoring for IT inevitable: NIIT

Australian enterprises will increasingly have to engage offshore technology providers to offset declining population growth, according to Arvind Thakur, the CEO of Indian offshoring specialist NIIT Technologies.

"Australia is challenged in terms of its population," Thakur told ZDNet Australia, although he said the country had a good track record for high-level project management and design skills.

However, a shift to more coding and management tasks being sent overseas was inevitable, he suggested. "Work now happens where it is good quality and where it is more cost-effective."

NIIT employs over 4,000 people worldwide, with the vast majority at its headquarters in New Delhi. The Australian operation, headed up by John Price, has around 70 employees.

Price said that the company was keen to encourage local IT service providers to partner with it in delivering large-scale projects, but many remained resistant.

"Not many Australian firms have recognised how they could grow their business through this path," he said.

Those comments follow recent remarks by Satyam's ANZ country manager, Deepak Nangia, that CIOs remain nervous about adopting offshoring, despite perceived benefits.

Thakur said that some market verticals, such as finance, were already comfortable with the notion of planning and measuring outputs based on service targets rather than against specific individuals, but others were still uncomfortable with the notion.

"One of our biggest challenges working with global customers is changing their mindset from individual consumers of skilled people to an output created by people and processes."

Thakur also confirmed that NIIT is working to enhance its own development capabilities in China, although he rejected suggestions that China could ultimately outpace India as a source of offshoring services for first-world countries.

"China is severely handicapped by the fact that it's not in the global marketplace, and there's a significant handicap in terms of language," he said, predicting that its main impact would be in combined hardware and software solutions that could also exploit its well-developed manufacturing base. "China is a source of good talent but they lack the ability to work together as teams."