With the Australian IT skills market under pressure, Freya Purnell spoke to Mark McWilliams, director of Australasian professional IT services company Datacom, about the potential for outsourcing and looking offshore to find the right resources.
ISAP: Why are enterprises increasingly looking to overseas contract labour for large ICT projects?
MM: In Australia, with unemployment of around 5{db8ca4bbfe57dc8f9b6df9233a3a6c04f4968125edf9bb330d4f787c3a87cd09}, that makes IT unemployment almost zero. We are seeing some of the huge projects going on in the resources and banking sector, sucking an awful lot of resources out of the market. So the call to bring people in under things like 457 visas becomes pretty strong for a couple of reasons – anyone who has been working in Australia for a while is demanding quite a lot of money. Obviously too, with uncertain times at the moment, if people are gainfully employed, they’re not moving. So getting people from an overseas market becomes pretty attractive.
ISAP: Are there challenges for businesses bringing staff in from overseas and integrating them into their workforce on a more permanent basis?
MM: Yes, 457 visas have a fairly short-term focus, because ultimately the organisation becomes responsible for that person and their family. If we want labour onshore in Australia, we do need a longer-term fix. That means really looking at things like graduate programs out of universities. But even then, if you look at some of the stats, people who graduated in 2008, their average salary in IT is now $75,000 – having only been in the industry for three years.
The other thing too is the kind of ‘water lily’ type existence that a lot of young people live these days. Instead of being able to put them in a necessary role like a database administrator, they want to be more task-based. So finding people who just want to come to work and do the same things every day is pretty tricky. A lot of the roles in IT aren’t seen as particularly glamorous.
That’s why we are seeing a shift to lower cost economic zones. We’ve got operations in Malaysia and Manila in the Philippines, and we have ability to get skilled people at a price point that just can’t be matched in Australia. For example, for an entry-level service desk person, it will cost around $8500 a month… a quarter of the wage [for an Australian employee].
ISAP: What advice would you give to business leaders considering outsourcing to an offshore centre for skilled labour jobs?
MM: While you can easily offshore things that you can systemise, if you are looking at a serious ERP or payroll implementation, you just can’t send that offshore. You’ve got to have serious systems people who can sit around the table and work cooperatively with the client. To actually deliver the outcome that’s desired, it just can’t be done from a distance.
ISAP: With the rising popularity of cloud-based IT models, do you think there will be a change in what is expected of IT professionals in Australian enterprises?
MM: Cloud just makes things a little bit different. Instead of each SAP environment being architected differently, we will see standard templates for deployments. The net result will be quite good, because we will be able to administer more servers and databases and networks per person person than we could if each environment was separate.
But knowing how to implement the right workplace laws, and bringing into account all the individual employment arrangements, will still be a requirement which we can’t get away from, and those are the smart people that are hard to get hold of. Cloud will [however] make it easier to implement those limitations because businesses won’t need to worry about buying all the kit and integrating it in their environment. That will all be done by a service provider. Today we have SAP running in the cloud, administered by people who are administering hundreds of other services in the same cloud. So that’s good news from an efficiency perspective.
