The past few years have heralded what would seem to be the new era of off shoring here in Australia.  Numerous large Australian corporations made the big decision to off shore a lot of their IT functionalities to various countries such as India and China in an attempt to capitalize on cheaper labor costs in those countries.  I aim to explore the impact of such decisions in the Australian ERP market place and who is really affected by it.

The decision to off shore IT functionalities by Australian corporations created an influx of candidates primarily within the technical space.  A lot of developers got relinquished back into the market place as companies off shored any ERP development work that they had.  The combination of a decline in the Technical positions available, coupled with the increased number of candidates in the market resulted in not only a reduction on salary expectations but also an increasingly competitive job market amongst technical consultants.  Luckily, and unlike their technical counterparts, Functional Consultants were not greatly affected by this as businesses chose to retain their consultants due to the necessity for them to work closely with business users and stakeholders on a regular basis.

From a business’ point of view, the general consensus in the market from both managers and candidates suggests a general dissatisfaction from the quality of the work that was off shored.  This resulted in businesses being forced to hire local resources to polish up and rectify the work done overseas.  The net result of this being, not only the reduction in the savings but also, the extended time it takes to deliver a workable product.

The decision to off shore has often been primarily made as a means to take advantage of the inexpensive labor costs internationally.  However, in doing so, companies needs to be cautious about their off shoring partners as the cost of rectifying such work back here in Australia could result in not only wiping out their cost savings, but also costing them more compared to having the work done locally in the first place.  Companies also need to factor in the delay and hassle the rectification work will have in assessing whether or not it is truly beneficial to off shore work.  Taking all these factors into account, it should be interesting to see whether there is still a substantial cost benefit in off shoring?