Outsource IT or fall behind, Australian telco says

Telstra chief technology officer, Hugh Bradlow, has called on businesses to outsource their core ICT functions to specialized companies, including Cloud operators, in order to get with the 21st century.”The way that we have done ICT in the 20th century is not the way we need to do it for the 21st century,” Bradlow told attendees at a lunch for the American Chamber of Commerce in Australia.

Businesses risked falling prey to forthcoming “disruptive” technologies without doing so, such as increases in telecommuting, changes in videoconferencing technology and context-sensitive computing.

Instead, he urged businesses to outsource those ICT functions considered core, either specialist organisations or Cloud operators where possible.

“We have to run security for organisations,” Bradlow said. “We have an operational security group who specialise in this type of thing of 300 to 400 people and it’s very hard for organisations to replicate that.

“But we can serve people that out of our Clouds with the same capability at a margin, which makes it much more cost-effective for the organisation you’re securing.”

Bradlow’s push comes as Telstra itself looks to outsource back-office and support staff through ‘Project New’, a $290 million business revitalization project announced by chief executive, David Thodey, at the telco’s yearly financial results briefing last year.

The company’s continued efforts to cut fat and remove superfluous internal division has reduced a staff count once more than 50,000 internal employees to around 34,000.

Though outsourcing and Cloud migration strategies have resulted in companies like Jetstar whittling their resources to as little as five in-house staff, others – like maintenance services company the Programmed Group – maintain in-sourcing is required to lower costs and retain intellectual property.

Jetstar CIO, Stephen Tames, told Computerworld Australia that the budget airline’s IT outsourcing strategy, which has been in place since the company was first erected as a Qantas subsidiary, had on-flow effects to the wider group’s investigation of business service outsourcing.

Tames was also focused on developing the strategy as an “IT-as-a-service” approach, delivering the same capabilities to franchisees of the airline’s brand across Asia Pacific for a fee.

Telstra’s view on outsourcing also appears to have influenced its application platform strategies, with Bradlow likening the telco to shopping centre conglomerate Westfield.

“Westfield makes it money out of the enabling environment: The buildings, the airconditioning, the parking, the road; I’m able to draw some analogies between what we do with network capability, quality of service and those types of things and that enabling environment,” he said.
The mentality differed to that of European carriers, which had attempted to control the application store environment established by mobile phone manufacturers by establishing its own wholesale application catalogue, one which is yet to be considered successful against the likes of Apple or Google.

Follow James Hutchinson on Twitter: @j_hutch

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