Outsourcing a two-way street: Minister

The Minister for Communications, Information Technology and the Arts, Daryl Williams, claims Australia stands to benefit as well as suffer from the trend towards offshore outsourcing.The Minister made the comments at the opening of BMC Software's new sales support centre in Melbourne last week, conceding that it will be difficult for Australia to remain competitive in some areas.

The Minister for Communications, Information Technology and the Arts, Daryl Williams, claims Australia stands to benefit as well as suffer from the trend towards offshore outsourcing.

The Minister made the comments at the opening of BMC Software's new sales support centre in Melbourne last week, conceding that it will be difficult for Australia to remain competitive in some areas.

"We understand that there are some jobs that will be better... done overseas," he argued. "It's going to be a two-way thing."

However, the Minister pointed out that some high-skill work is still flowing into Australia.

"UBS Warburg transferred hundreds of jobs to Australia," he said. "IBM Japan has outsourced to IBM Australia."

BMC's Asia Pacific Vice President, Chua Tock Ling, said the decision to set up the new sales support centre in Melbourne, as opposed to India, China or another "cheaper" market, had little to do with cost.

"We have gone to India, we have gone to China... let me be blunt. From a cost point of view, Melbourne did not come up number one," Ling said.

It was a combination of good infrastructure and access to quality, multi-lingual personnel that helped to clinch the deal, he said.

For his part, Williams described some political reactions to the issue of outsourcing as "knee-jerk," especially in the case of recent deals involving Telstra.

The telco giant recently re-negotiated its contract with IBM, resulting in Big Blue sending jobs to India to cut costs and pass on savings to Telstra.

Telstra pointed the finger at IBM, which claimed sending jobs offshore was the only way to secure the savings demanded by the telco.