In Australia the notion of DIY is alive and well. You only have to look at the performance of the Bunnings hardware chain that in the second half of 2009 posted earnings before interest and tax (EBIT) of $711 million on sales of just $2.28 billion; an enviable EBIT-to-sales profit margin of over 30%. Clearly DIY is a big business. When it comes to ICT the Australian market, despite being a highly mature services market where outsourcing is common place, we continue to hold on to the DIY mentality for key elements of ICT service delivery. In Longhaus’ ICT Spending and Delivery Study for 2010-11 the findings highlighted that across a sample of Australia’s large enterprises 40% of these organisations rely solely on their internal ICT personnel for delivery of services ranging from data centres to service desks. Even more concerning was that one of the most highly commoditised ICT services, the provision of email and calendaring, was still done entirely in-house by 45% of the respondents.

In the past 12-months we have been commissioned to conduct three separate independent reviews or assessments into Australia’s ICT contracting and labour hire markets with a specific focus on how they apply to public sector procurement.  The common finding in all reviews, and one of the few facts that is undisputed between the government and the suppliers be they recruitment or services firms, is that the labour pool is finite and common. The former fact alone should be enough to drive more public sector business towards incorporation of off-shore labour models offering access to additional capacity in India, China, the Philippines, or from wherever in our region additional labour pools reside. But it is still not the case in Australia. Prior to discussing the need for systemic change within both public sector procurement policies and ICT service vendor contracting approaches let’s first recap the national ecosystem.

Whether you are a fan of Microsoft or not one thing is for certain; after years of producing office productivity software they know how to execute a launch campaign. And the recent SharePoint 2010 offering has been no exception. Whether it is online global webcasts, local road shows or a flurry of blogging, tweeting and other social media strategies, users can hardly fail to hear the message that SharePoint was released to manufacturing (RTM) last month. In preparation for the release of this latest version of Microsoft’s portal framework and document collaboration platform, as part of our Q2 CIO Confidence Poll Longhaus sought to understand the current level of adoption of SharePoint, as well as Australian organisation’s intentions to adopt via upgrades or new purchases.

On 25 May, the Australian Government announced a set of principles to govern its engagement with ICT suppliers. In doing so Lindsay Tanner has hi-jacked the Australian Information Industry Association (AIIA) brand, and the Gershon brand to push through something that doesn’t even come close to a framework that could be leveraged into policy, and thereby taken seriously by a governing public sector body. There is zero accountability in this approach for the Australian Government Information Management Office (AGIMO) and zero progress for operational efficiency in the Federal Government’s use of ICT. If the government wants to be releasing “outcomes” like this then they should at least have the decency to not use Gershon’s name as a shameless placebo for vapourware.

Longhaus’ Australian Tech Index showed that the Australian ICT industry was already in a period of natural economic decline at the point at which the Australian Government commenced implementation of the recommendations presented by Sir Peter Gershon in the 2008 Review of the Australian Government’s Use of Information and Communications Technology (the Gershon Review). Compounding the impact of this natural economic cycle was the global financial crisis which took the Australian economy to the brink of recession. For the part of the Australian ICT industry that exists to support the $4.3 billion  Australian Government, the potential consequences of these three events occurring simultaneously were potentially catastrophic. Included within this group were members of the ICT services and labour industry represented by the Information Technology Contractors and Recruiters Association (ITCRA). This group were a key target of the Gershon Review in recommending the total number of Australian Government ICT contractors be reduced by 50% over a 2-year period. In March 2010, Longhaus undertook two research studies sponsored by ITCRA to quantify the impacts of the Gershon Review implementation on both the suppliers of contingent labour  and the individual participants constituting the labour force. Among a sway of insights, this report identifies that companies identifiable as contracting and recruitment suppliers have borne an inequitable weight of unsustainable change in reference to the way that contingent labour is now managed within the Australian Government.