Australia among top offshore IT services countries in 2008: Gartner

Stan Beer
Friday, 12 December 2008 05:15

IT Industry - Strategy

Australia is a now a leading offshore IT outsourcing destination, according to a new report from global research group Gartner. This year, Gartner assessed the suitability of 72 countries as offshore locations, and has announced its ‘Top 30’, with Australia figuring prominently.

The Gartner analysis showed that the dynamic nature of the market has seen a number of countries position themselves as credible alternatives to the BRIC countries (Brazil, Russia, India and China).

In 2008, Gartner’s top 30 locations for offshore services, by region, were:

·        Americas: Argentina, Brazil, Canada, Chile, Costa Rica, Mexico and Panama

·        Asia/Pacific: Australia, China, India, Malaysia, New Zealand, Pakistan, the Philippines, Singapore, Thailand and Vietnam

·        Europe, the Middle East and Africa (EMEA): the Czech Republic, Egypt, Hungary, Ireland, Israel, Morocco, Poland, Romania, Russia, Slovakia, South Africa, Spain and Ukraine

The top 30 countries for offshore services were rated according to 10 criteria designed to help determine which locations are right for individual organisations. The 10 criteria were: language, government support, labour pool, infrastructure, educational system, cost, political and economic environment, cultural compatibility, global and legal maturity, and data and intellectual property security and privacy.

A separate in depth report was prepared for each of the top 30 countries, with details about how they scored across the 10 criteria. Australia had a very strong report card, judged as excellent for language, infrastructure, Political and economic environment, Cultural compatibility, Global and legal maturity, and Data and intellectual property security and privacy. Good or very good scores were also recorded for educational system, government support and labour pool. The one drawback was cost, where Australia was only judged as fair.

Ten countries from Asia/Pacific were represented in the 30 leading countries. These included the undisputed leader in offshore services — India — and the greatest challenger in terms of potential scale — China. The rest are a mix of mature environments that offer limited cost benefits (such as Australia, New Zealand and Singapore) and emerging countries with a variety of challenges, but attractive costs (such as Malaysia, Pakistan, the Philippines, Thailand, and Vietnam).

Only China, Thailand and Vietnam were rated less than "good" for language skills in the region. Government support for the promotion of their country as an offshore services location was generally strong in the region, although New Zealand, Pakistan, Thailand and Vietnam were only considered "fair." The combination of skills, existing scale and future scalability gave India an advantage over other countries in the region but, again, New Zealand, Pakistan, Thailand and Vietnam trailed the other countries in the region with a "fair" rating.

Predictably, Australia, New Zealand and Singapore were all rated highly for infrastructure, as was China, which has made considerable investment in this area. Australia, India, New Zealand and Singapore were all rated "very good" in terms of their educational system; Pakistan, Thailand and Vietnam were rated the lowest ("fair").

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