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MEDIA RELEASE

ACS Details IT Outsourcing Problems to Senate Committee

Friday 5 September 1997, Canberra - The Australian Computer Society (ACS) detailed problems with whole-of-government IT Outsourcing to a Senate Committee today.

Dr Edward Lewis, Ian Dennis, Tom Worthington & Professor Peter Weill at Senate,

Tom Worthington, President of the ACS and Ian Dennis FACS, author of a paper on Outsourcing issues for ACS members, gave evidence to Senate Finance and Public Administration References Committee.

The ACS submission detailed issues for IT professionals involved in contracting out IT services and included the paper Outsourcing and contracting out of IT products and services.

Mr Worthington said it is important for IT professionals to be clear on their roles and obligations in any outsourcing work.

"Whole of government IT outsourcing is a high risk approach, for individuals, organisations and for the community as a whole. It is important that all those involved understand their obligations and the risks, as well as the potential benefits," he said.

Ian Dennis FACS, detailed a number of issues:

Retention of sovereignty

  1. Need to keep control of process within Government
  2. Need to keep sufficient technical expertise to ensure effectiveness
  3. Potential to be held to ransom
  4. Potential for denial of technology benefits (cost reduction/operational improvement) unless to vendors profit.

Problem of continuance

  1. Smooth conclusion/transition of the contract is as important as its commencement
  2. Any removal or reduction of outsourcing options is to the vendors advantage and the Governments disadvantage
  3. Need for commercial alternatives and independent audit of the process
  4. Need for strong IP agreements and escrow
  5. No need to transfer all staff, what about secondment

Development of our IT industry

  1. Too big a job invariably excludes Australian players
  2. We cannot rely on "goodwill" to ensure significant roles for Australian companies
  3. Strategically important, or profitable, components of a project, once outsourced, are highly unlikely to be subcontracted to local suppliers
  4. Successful local company outsourcers become take-over targets for multinationals. Possible need for "distancing" or local ownership restrictions, especially for strategically important outsources.

Mr. Worthington mentioned these issues are of particular interest in the ACT. The ACS Canberra Branch is holding a one day conference on "The Relevance of Outsourcing to the IT Professional" on Saturday 1 November 1997 in Canberra.

The ACS also gave an overview of its submission to the IIT/Goldsworthy enquiry, at the request of the committee. Mr. Worthington also alerted the committee to the draft "Discipline Research Strategy for Information Technology", released 8 August 1997 by the Australian Academy of Technological Sciences and Engineering.

This media release is located on the Web at http://www.acs.org.au/president/1997/outsrc/outsrcpr.htm

ENDS

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