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Customs unveils IT outsourcing plans

The nation's border protection agency has opened the door to using low-cost offshore software developers to build and maintain core technology systems that regulate the flow of people and products in and out of Australia.

Tender documents published online yesterday say the Australian Customs Service will "not exclude offshore sourcing for the provision of application maintenance and support" as part of plans to find partners for its $70 million-a-year technology outsourcing program.

This is a turnaround in the attitude of Customs to offshoring. Under current contract arrangements, the service's technology providers, such as EDS and IBM Global Services, are forbidden from using software development facilities outside Australia.

Customs has issued four tenders for technology partners to replace a nine-year, $522 million contract with EDS.

In a sign that offshoring may soon become more common in federal departments, the Department of Immigration and Multicultural Affairs has indicated it will consider proposals to use offshore developers for work on its $495 million Systems for People IT overhaul.

Immigration deputy secretary and chief information officer Bob Correll said yesterday the Systems for People tender issued earlier this month did not rule out offshoring options.

Mr Correll said any decision to use offshore facilities in low-cost centres such as India or China would need to involve Minister Amanda Vanstone, and broader consultation with government.

"We would certainly be consulting first with our minister before any decisions would be taken to do things that would involve offshoring," he said.

"There is, however, nothing that would prevent that from happening."

Commonwealth chief information officers are known to be closely watching developments at the Australian Tax Office, which will decide soon whether to allow Accenture to use facilities in India for development work on its $450 million Change Program.

The Tax Office has been considering an Accenture proposal to use offshore developers for low-end "factory work".

It said using offshore facilities could speed project development, relieving pressures and reducing spikes in demand for niche IT skills.

The Australian Government Information Management Office's CIO committee, chaired by office chief Anne Steward and made up of CIOs from the major Commonwealth departments has not formally discussed the offshoring issue.

However, a spokesman for Special Minister of State Gary Nairn, who is responsible for AGIMO under the Department of Finance, said the issue had been informally discussed.

If the Tax Office agrees to the plan, it will be the first Commonwealth department to send work offshore.

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