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Policy Changes will Determine the Future of the Australia Enterprise Outsourcing Market in Government - New analysis from Frost & Sullivan, The Australia Enterprise Outsourcing Market in Government reveals that revenues in this market to be worth AU$1.83 billion by end-2010, growing at a CAGR of 3.9 per cent (2006-2010)
Policy Changes will Determine the Future of the Australia Enterprise Outsourcing Market in Government

 

NewswireToday - /newswire/ - Sydney, Australia, 2007/08/22 - New analysis from Frost & Sullivan, The Australia Enterprise Outsourcing Market in Government reveals that revenues in this market to be worth AU$1.83 billion by end-2010, growing at a CAGR of 3.9 per cent (2006-2010).

   
 
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Despite the perception of Government in Australia as being a mature market in terms of the adoption of enterprise outsourcing, CIOs and IT decision makers within both federal and state agencies identified policy changes and increased demand from consumers as major drivers of this market.

New analysis from global growth consulting company, Frost & Sullivan, The Australia Enterprise Outsourcing Market in Government 2006 - 2010, reveals that revenues in this market totaled AU$1.58 billion in 2006 and is forecasted to be worth AU$1.83 billion by end-2010, growing at a CAGR of 3.9 per cent (2006-2010).

BPO is forecast to be the strongest growth segment at 5.9 per cent compound annual growth, with IT outsourcing growing at 3.6 per cent on a compound annual basis.

BPO includes front office, back office and other government processes such as licensing and registration, infringement processing, transport ticketing, utility billing and market management. While IT outsourcing includes applications (maintenance and support; software development and integration) and operations which includes datacentre management, helpdesk and network telecommunications, among others.

"The strongest growth segment with substantial revenues in the outsourcing market between 2006 and 2010 is expected to be the front office sector which covers contact centres and customer interaction", says senior industry analyst, Simon Hayes at Frost & Sullivan Australia. "A CAGR of 6.4 per cent is forecast by end-2010."

IBM is the market leader in outsourcing, but is followed closely by EDS, which has substantial existing government relationships it can leverage to gain new business. Third-placed Fujitsu has particular strengths and existing relationships in state government.

"Overall, the IT outsourcing market in Government is really just churn, fuelled by cyclical renewals of existing major contracts, particularly in the federal sector, as well as demand for upgraded infrastructure", adds Mr. Hayes.

The upcoming Federal Election will act as a powerful restraint on market growth in particular, the BPO segment, with the Federal Government postponing decisions that could be seen as politically controversial.

"While activity is forecast to increase post-election, significant growth is not expected in BPO until at least 2009, and then only if outsourcers are able to convince governments that there are benefits to be garnered".

The key challenge in 2007 is a tightening of budgets for both services and infrastructure. While this seems to contradict responses that most agencies are expecting to increase spending, it underlines the concept that government agencies are under more pressure than commercial organisations to deliver value for money.

A survey conducted with 50 senior management-level executives, with control or insight into the agencies’ outsourcing budget and strategy shows that Governments are searching for security, with factors such as success on previous contracts, the ability to effectively deploy new technologies and the ownership of a known and trusted brand rated more important than cost of delivery in the selection of an IT service provider. Government respondents also rated independent accreditation and presence on the ICT Multi-Use List (MUL) more highly than private industry respondents.

In terms of selecting a BPO provider, however, cost of delivery was rated as the most important factor, although trust factors like success on previous projects, presence on the ICT MUL and brand also rated highly.

The Australia Enterprise Outsourcing Market in Government 2006 - 2010 Demand & Supply reports forms part of Frost & Sullivan Australia’s enterprise outsourcing subscription, which includes research on the following sectors: Enterprise Outsourcing Opportunities in the Australian BFSI Vertical (published May 2007) and Enterprise Outsourcing Opportunities in the Australian Healthcare Vertical (November 2007). This service can be purchased separately or bundled as a full report.

All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Analyst interviews are available to the press.

If you are interested in a virtual brochure, which provides the methodology adopted for this research, a brief synopsis along with a complete table of contents, then send an email to Sharmin Jassal, Corporate Communications, at sharmin.jassal[.]frost.com with your full name, company name, title, telephone number, fax number, city, state, country and email address. Upon receipt of the above information, an overview will be sent to you by email.

About Frost & Sullivan

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics.

 
 
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Policy Changes will Determine the Future of the Australia Enterprise Outsourcing Market in Government

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Frost & Sullivan |
Publisher Contact: Sharmin Jassal 
+61.2.8247.8900 sharmin.jassal[.]frost.com
 
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