Global information technology company IBM is bucking the trend of companies cutting back in Western Australia and instead investing heavily in its local operations.
The slowdown in the resources industry has led to reduced spending across many business sectors, but IBM is running counter to the trend by predicting a continuation of its growth in the state for the next 18 months at least, as clients employ technology to cut operating costs and improve productivity.
The company has doubled its presence in WA since 2010 and is now the state’s third largest IT company with 500 technical and professional employees.
The catalyst for that growth was the investment in a specific natural resources ‘solution centre’ in Perth in 2010, followed by the decision last year to specialise in the oil and gas sector, and making WA its LNG ‘centre of excellence’.
It has since won three major contracts with LNG operators, including the carrying out of end-to-end IT servicing and business consulting for Inpex on its $35 billion Ichthys project.
IBM’s decision to establish WA as its LNG hub has meant relocating staff to Perth through its GoWest campaign, as well as bringing in expertise from global locations as far away as Norway.
Vice-president of global services Ian Abraham is one of those to have relocated to Perth, arriving from the UK with his family a year ago to also take on the Australia and New Zealand-wide director of applications services role.
“Being based here is a reflection of the growth and the importance we see in WA,” Mr Abraham told Business News.
In the 12 months since relocating, Mr Abraham said it had become apparent just how loyal Western Australians were, which made local investment vital to IBM’s success.
“Many of our clients expect us to be based here, expect us to have the capability here, and want to work with organisations that have significant investment and presence in WA,” he said.
“While you might utilise resources from elsewhere, ultimately they want to work with organisations that are here.”
IBM’s growth and recent contract wins have resulted in the company outgrowing its Hay Street office and subsequently leasing offices in the old Bankwest Tower to cater to the overflow of additional staff recently employed.
WA state manager and national natural resource manager Murray Bruce also returned to Perth to lead the company’s resources-focused growth strategy.
He said IBM had grown its resources sector presence during the past three years despite the fact that the mining boom was already well under way.
“What you see is the digital boom around natural resources lags the construction boom,” Mr Bruce said.
“We’re seeing the start of the digital boom in natural resources because there’s a lot of ground that’s untapped in terms of digital initiatives to improve efficiency.”
He said the focus on driving efficiency through digital technology had emanated from miners’ difficulty in obtaining capital and new considerations of how they could use existing technology more effectively.
“Instead of saying ‘we’ve got trouble with rail productivity, let’s buy another train’, there's now a look at the potential for digital initiatives and the use of smarter technology,” Mr Bruce said.
While mining contracts had sparked IBM’s growth in WA, followed by work in the oil and gas sector, the company was also taking advantage of energy and utilities contracts.
Last year it won a contract with Water Corporation and has also carried out work with the Pilbara Development Commission to consult on how Geraldton can better integrate technology to become more efficient, including access to the National Broadband Network.
“We see [the NBN] as an enabler, it’s an enabler of technology, of productivity and efficiency. It gives businesses choice in terms of the way that they work,” Mr Bruce said.
