Researchers have identified key practices that can help to make technology outsourcing more ethical and sustainable in the financial and manufacturing sectors.
Many companies outsource information technology operations and systems, and data processing and analytics, to India.
Outsourcing has many benefits, but it brings with it a range of challenges, including an increased vulnerability to data compromise, system interruptions and ethical considerations in relation to human rights.
“Our project investigated how Australian financial and manufacturing organisations that outsource their technology to India, translate ethical frameworks into practice,” says Chief Investigator, Professor Suzanne Young.
Ethical frameworks play an important role in governance that enables and promotes environmental, social and economic development across the world.
“Our findings showed that, in relation to compliance, the financial sector seems to have established stringent regulations and controls with Indian operations, whereas the manufacturing sector seem to be less advanced,” says Professor Young.
Modern slavery currently appears to be a key focus in the financial sector noting improvements that could bring about more sustainable supply chain practices.
The research team found there was a lack of relationship-building and collaboration in working with suppliers in multi-tier supply chains. They recommend Australian companies offer training and conduct visits to supply chain partners rather than rely on surveys and checklists in order to make improvements to overall working conditions, human rights and health and safety considerations throughout the whole supply chain.
“The international environment is complex, with differences in national systems and culture. A combination of long-term relationship building, offering training and professional development, the use of contracts with due diligence procedures and penalties for non-compliance, sharing of information and ways of operating, and proper governance and compliance procedures all contribute to a more ethical and sustainable outsourcing partnership,” says Professor Young.
The research project, funded by the Department of Foreign Affairs and Trade, was undertaken at the La Trobe Business School by a multi-disciplinary team of researchers from La Trobe University, Indian Institute of Technology, Kanpur and the Indian Institute of Technology, Gandhinagar. The La Trobe Business School's research team consisted of Professor Suzanne Young, Professor Damminda Alhakoon, Dr Nicole El Haber and Dr Michael Gatumu.