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Indian Outsourcer Extends its Focus to Government Market

by Karen Jamal •
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The Australian Financial Review recently reported that Indian outsourcer, Satyam Computer Services, intends to establish an office in Canberra, as it targets the federal government for outsourcing work.

Satyam employs more than 850 people in Australia. Two years ago, the company's Australian workforce numbered about 125.

According to Deepak Nangia, Satyam’s Country Manager for Australia New Zealand, Australia hosts one of the company’s largest development centre outside of India. “In addition to our existing centres in Melbourne and Sydney, we are exploring the option of opening an office in Canberra in the next six to twelve months,” he says.

Satyam is expecting revenue growth of 30 to 40 per cent this year. To date, the finance and telecommunications sectors have provided most of its Australian business, but Satyam intends to extend its focus to the government market.

“With the recent announcement of the government’s estimated $5.7 billion technology budget, we think that there is definitely growth potential in the Australian Government market,” Mr Nangia says.

Mr Nangia adds that Satyam has Endorsed Supplier Status as well as experience on the NSW-DPWS panel for Internet Services.

Intermedium’s latest data on outsourcing and managed service contracts reveals that outsourcing contracts are in place in 18 federal government agencies. One of these was due for renewal in 2005 (and has a contract extension in place); two are due for renewal in 2006; seven in 2007; two in 2008 and six in 2009.

Volante manages outsourcing in four agencies; EDS, IBM GSA, and KAZ each manage outsourcing in three agencies; CSC manages outsourcing in two agencies and Getronics, Unisys and ASG manage outsourcing in one agency.

While the Australian Government has accepted outsourcing as a means of streamlining services and reducing costs, Mr Nangia believes that the market will see some significant changes in 2006 and beyond.

“We foresee a trend towards selective outsourcing with key functions retained internally, rather than total outsourcing,” he says, adding that Satyam predicts contracts will be of shorter duration that in the past.

Some of the other trends Satyam hopes to capitalise on include selective sourcing using best of breed technologies, business outcome driven results and more fixed bids. “We’ll see operational systems outsourced and strategic applications insourced,” Nangia adds, “and the shared service model will be implemented by more agencies, as they shift to common processing environments and similar business applications.

“These strategies will be adopted by some agencies in the early stages, while others may choose to take a wait-and-see approach.”

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