Striking the right balance
Smart business is all about striking a good balance between outsourced and insourced IT skills. Banks are a perfect example as they are strictly regulated, with rules governing what they can and can't do offsite. So it's extremely important to get the mix right.
The Commonwealth Bank and Macquarie Bank, for instance, retain highly skilled IT staff while successfully working with an ecosystem of partners. They don't purely outsource, but when they do, it's done with extreme care and diligence.
Both businesses have retained very smart engineering and business savvy teams that manage the two modes of operating. This approach to technology enables them to innovate by building their own systems, apps and approaches - while investing in their own people and the local economy.
From offshoring to onshoring
If my experience has taught me one thing, it's that you can't outsource care. As a friend of mine says, "The devil is in the detail." I believe that keeping critical IT infrastructure skills within your own organisation is the best way to meet today's business needs and deliver quality services, both internally and externally.
Consider what's happened in the Australian manufacturing industry over the last decade, for example, where many high profile businesses offshored various manufacturing and distribution operations to survive. Suddenly there was a big change in the employable skills within our economy and we are now dependent on other countries to manufacture products for Australia.
Recently, however, we're seeing a growing trend toward onshoring to bring back all or some of these components. This is largely due to factors such as quality control, flexibility, responsiveness, shipping time and costs, offshore risks to intellectual property and other factors.
While Australia may never experience the mass onshoring the US has experienced since emerging from a recession in mid-2009, it can be the right strategy for certain businesses, under certain circumstances.
Today, IT infrastructure is following a similar path. Many companies that initially rushed to move their IT infrastructure offshore, or their apps and workflow to the cloud, are now bringing them back as they realise it wasn't the best approach for their particular needs.
Opening the door for innovation
If we want to continue to create, innovate and build wealth - rather than just extract it in a cheap cost play - we need to develop and retain expert IT skills within Australia to create the right ecosystem for growth. After all, it's clear that businesses will need people with strong IT application, platform and infrastructure skills to do really well in the digital era.
If we don't have the right IT professionals within Australia, businesses will end up having to buy whatever comes off the shelf - and simply hope for the best. By investing in people, your business will have the flexibility to make the best decisions for its particular circumstances. There's no right or wrong approach-it's all about striking the right balance and better defining your service levels.
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