Outsourcing soars in 2000: survey

Rapid growth in outsourcing was a marked feature of the IT industry in 2000, according to Statistics New Zealand.

Rapid growth in outsourcing was a marked feature of the IT industry in 2000, according to Statistics New Zealand.

Its annual survey for 2000, sponsored by ITANZ and the Ministry of Economic Development, also reveals:

  • The IT industry is worth $11,133 million - up 6.9% on 1999.
  • New Zealand IT export sales increased 10.7% to $923 million. Growing software exports exceed $100 million.
  • End user sales (excluding on-selling activities) increased 5.3% to $7756 million.
  • Sales of education and training to end users increased 46.8% to $94.7 million.
  • Sales of communication services increased 5% to $4582 million.

ITANZ executive director Jim O’Neill says outsourcing is a major factor in industry growth which was reflected the sales of communications services.

Outsourcing deals affecting on the figures included Telecom farming out its IT operations to EDS, and gen-i, Unisys and Westpac.

Strong growth in education and training was credited to growing numbers of people coming to New Zealand because our weak dollar makes IT training cheap. Increasingly firms are luring Americans and Europeans for IT courses, and such further growth is expected in 2001, says O’Neill.

“It also reflects a shift in education around the knowledge society,” he says.

A collapse in economic confidence last year damaged the industry in early-mid 2000 but confidence and the industry recovered, boosted by the e-commerce summit, which highlighted the importance of IT to businesses.

However, unhappiness with the government meant there were no major projects last year, bar Social Welfare acquiring mainframe systems from Unisys and EDS.

For 2001, O’Neill says people are optimistic despite “troubling” signs overseas. Growth rates should hold this year as our economy is somewhat isolated from the speculative hype of the US.

However, continued growth will lead to skills shortages, particularly in e-commerce, and this could dampen projects and the progress of the industry, O’Neill says.

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