Indian IT Services companies are gaining traction within the public sector, most notably within the Federal, NSW and Victorian spheres.
Federal Government contracting with Indian suppliers Wipro and Tech Mahindra is steadily rising (mainly for contingent labour hire) while strong market rumours suggest that a major multi-national well established in the Australian Public Sector market and an Indian challenger are the two final contenders for the central computing stack of the Transport for NSW (TfNSW) Next Generation Infrastructure Services (NGIS) project.
At the political level, both NSW and Victoria have been showing strong interest in the capabilities of Indian IT Service providers, undertaking Trade Missions to India and talking positively about opportunities for engagement.
In 2012 India was the partner country for Australia’s CeBIT conference. At the time, Australia’s High Commissioner to India, Peter Varghese said “‘this partnership will add further momentum to the strategic relationship between India and Australia. India's IT sector has grown rapidly over the past 15 years and is predicted to grow annually by around 25-26 per cent”.
Indian supplier Wipro has established the strongest initial position within the Federal market. Since 2010-11 the supplier has been awarded $35 million in Total Contract Value (TCV), (as published via AusTender and analysed via Intermedium’s Analyse IT data analytics tool). $23 million of that was signed in 2012-13, almost exclusively with the Department of Human Services (DHS).
In January 2012, Wipro was included on the DHS’s ICT Services Panel. It has now signed $25.1 million in TCV through the panel.
The only other Indian vendor to have any contracts within the Federal market thus far is Tech Mahindra. Tech Mahindra is on DHS’ ICT Contractor Service Panel. It has signed a relatively modest $1.3 million in TCV with the Department of Immigration and Border Protection (DIBP) year-to date-in 2013-14 through the DHS panel.
While Wipro and Tech Mahindra, as well as the wider group of Indian ICT IT Services companies, all offer ‘as-a-service’ (cloud) solutions, no Federal agency has as yet signed a cloud contract with any due to concerns over hosting cloud solutions offshore.
The Australian Government Policy and Risk management guidelines for the storage and processing of Australian Government information in outsourced or offshore ICT arrangements, stipulates that “Should agencies enter into arrangements where information is held offshore, there is the potential for that information to be stored or processed in jurisdictions where Government information access mechanisms operate without transparency or outside of established legal frameworks.”
Indian suppliers are gaining traction within NSW, with one, as mentioned before, strongly rumoured to a serious contender for Transport for NSW’s Next Generation Infrastructure Services (NGIS) project.
The TfNSW Request for Tender process, followed an initial stage EOI which attracted 25 bidders, including Tata Consulting Services, HCL, Infosys and Tech Mahindra. If successful, the rumoured to be shortlisted Indian company would be the first Indian ICT company to win a major cloud contract within the Australian public sector.
Victoria is showing political and administrative level interest in establishing business with Indian IT Services companies. In March 2014, the Minister for Technology, Gordon Rich-Phillips led a Trade Mission to the Indian State of Kerala. Rich-Phillips said of the trip, “ICT is one area in particular where Victoria is very interested in partnering with Kerala, which has long been an Indian leader in the adoption and application of ICT services”.
More than 600 Victorian organisations have taken part in Indian Missions which have assisted in creating $630 million in new partnerships with Indian companies and private sector organisations. The only large contract to be seen between the Victorian Government and an Indian company to date is a $75 million agreement with Satyam to build a technology and learning centre at Deakin University's Waurn Ponds campus near Geelong. In 2009, Satyam reneged on the deal citing that it did not have the global capacity for further investments.
Another deal with an Indian supplier may not be far off.
In February 2014, Fairfax reported that Victorian Minister of Human Services Mary Wooldridge had failed to deny plans to send the Department’s (now former) CIO, Graham Coles, to India to conduct negotiations for the State’s Integrated Client and Case Management System. The system is an amalgamation of child protection and disability services systems within the Department based on PeopleSoft software.
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