DuluxGroup steps back from single-source IT offshoring

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DuluxGroup steps back from single-source IT offshoring

Will partially insource and use 'smaller niche providers'.

Iconic Australian paint maker DuluxGroup is set to “move away” from a heavy single-sourced offshoring model for most IT services, and will instead insource some of the work.

The company, which is now owned by Japan’s Nippon Paints, said an operational review had led to the strategic shift in how it runs IT.

“In 2020, after an iteration of single-sourced offshoring for most IT services, a review of our operations led us to decide to move away from this model, replaced by a more dynamic blend of internal teams and smaller niche providers,” the company said.

“This decision will see the creation of up to 40 new jobs within the DGTech team across a broad range of capabilities.”

DuluxGroup’s IT function was born after the company demerged from ASX-listed Orica in 2010.

At that point, IT brought together a mix of “new employees, transferred employees from the parent company as well as some outsourcing”, the company said, the latter being a reference to the deal it held with UXC at one time.

“Our data centres, infrastructure and service desk were all outsourced while our core application support was kept in-house, with some boutique companies providing contingent and project labour as required,” the company said.

“Fast forward to 2019, we were acquired by Nippon Paints which has given us a great opportunity to explore new markets, share knowledge and start to think about how we contribute to the larger group.”

The company did not identify which offshore provider it has been outsourcing most of its IT services to in recent times.

However, a DuluxGroup spokesperson told iTnews the shift was unrelated to COVID-19.

"The change in our sourcing strategy is mostly led by our accelerating digital ambition and the need to have an highly agile and business integrated capability," the spokesperson said.

"We had been assessing options since September last year."

While COVID-19 led to offshore capacity problems for some major Australian companies like telcos, retailers and finance firms, the spokesperson said DuluxGroup had seen only a "minimal drop in the service level" from its own outsourcing partner.

"Our current system and processes have supported us seamlessly through the challenges caused by COVID-19 and our current outsourced partner responded strongly to the challenges."

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