Wednesday, October 3, 2007

Trip Report: DownUnder

(Copyrighted 2007. Photo by R Wang. All rights reserved)

Well, it's hard to beat the weather, scenery, and market in Australia and especially here in Sydney! Amidst this wonderful backdrop is an economic boom based on Financial Services, Public Sector, and Natural Resources, especially mining. In other economic news, real state pricing has hit a drop but not b/c of the US sub-prime scandal, but more along the retirement savings laws passed by the federal government which has moved a lot of money out of the real estate market. However, rents continue to rise while construction has halted.

(Copyrighted 2007. Photo by R Wang. All rights reserved)

On the technology front, there is a lot of activity supporting the 3 key industries. Enterprise apps remain hot as the country moves into the post-Y2K replacement cycle. In the context of globalization, as expected, China and India remain the talk of the country while the Aussie public sector heats up:
  • China's economic influence runs deep for natural resources. China continues to be Australia's largest importer of natural resources such as copper, coal, bauxite, iron ore, and nickel to name a few. The market is such a buzz that there aren't enough truck drivers to haul loads to ports, even with salaries hitting A$ 80,000 a year and miners are clearing A$150,000 or more with bonus. (Side note: The guy that drives the train from Rio Tinto's mine to the port in West Australia makes A$150,000 per year!). From a tech perspective, apps spending is up in the mining and exploration sector to support China's large appetite for natural resources. This means heightened interest in software replacements, upgrades, and new purchases. ERP, supply chain and TMS support, and other mining specific applications are garnering significant interest.
  • India's role continues in global delivery models for financial services. The continual labor arbitrage for services and back office functions drives the buzz with India. With most the Financial Services firms looking at these opportunities, the system integrators are playing out the global delivery models and many of the large multi-nationals are focused on business process outsourcing opportunities (BPO). From many conversations its clear that large scale ERP replacements are also on the way for Australian based financial service companies.
  • Consortia and shared services provide opportunities for the public sector. On the public sector side, IT spending for new projects continue with shared services organizations continuing to lead the way. These public service consortia have been among the early adopters of BPO. Agencies such as water, building departments, land administration among others have done a great job, especially in the rural states like Western Australia.
End users should begin the process of mapping business initiatives to software spending requirements. Business and IT projects should focus on 4 key drivers: growth, efficiency, regulatory compliance and strategy. One suggestion is to conduct a self-assessment of long term apps strategy readiness and to be focused on building a 5 -year apps strategy that includes organizational change, process optimization, technology readiness, and solutions centric ecosystem maturity.

For system integrators this means a ripe market where implementation services, apps replacement and upgrades, and outsourcing provide significant opportunities as customers look at their technology requirements in the context of business initiatives

(The personal contents in this blog do not reflect the opinions, ideas, thoughts, points of view, and any other potential attribution of my current, past, or future employers.)
Copyrighted 2007 by R Wang. All rights reserved

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