IT initiative 'on hold'

Outsource2NewZealand, a Government-funded joint initiative to attract IT contracts from overseas, is dead in the water.

"We're in a hold pattern," said Garth Hamilton, head of O2NZ.

The group was intended to pitch collectively for work around its five main members and investors - Black Coffee Software, Catalyst IT, CGNZ, Optimation and Synergy International. But instead, O2NZ is inactive, its membership fractured.

Hamilton is disappointed, but believes it can be resurrected.

"Synergy has had some big wins in the United Kingdom and has chosen to go it alone," said Hamilton of the software developer which, up until late last year, was O2NZ's largest member.

IT consulting firm CGNZ, was bought by Hewlett Packard last October, throwing its long-term membership into doubt.

The $1.26 million funding from the Government will be left untouched until the initiative's future is decided.

"The concept would have worked," Hamilton said. "We're fielding inquiries also from the West Coast of the United States. Outsourcing in the United Kingdom is very fast growing at the moment as India reaches saturation to a certain point."

One option was to continue with a smaller membership base. But Jim O'Neill, the executive director of the Information Technology Association of New Zealand (Itanz), said the new pan-industry body ICT New Zealand, which formed last year, would best handle future outsourcing initiatives.

The group includes Itanz, the Health IT cluster, Internet NZ and several smaller bodies.

Itanz was an enthusiastic supporter of O2NZ from day one, but the initiative's membership issues had prevented much progress, despite inquiries from companies scoping New Zealand as an outsourcing destination.

"We weren't able at the time to deliver anything because we weren't set up to. We had to put people off," O'Neill said.

"It's not too late, but we've got to do it in a co-ordinated way," he added.