"Some of the bigger players will not tender for work without pushing offshoring possibilities to keep costs down," he said.

Key findings from the IDC research include:

* Although Australia is the most mature geography in Asia/Pacific in terms of procuring outsourcing services, there is still a huge untapped potential in the country, especially in the SME (small and medium-sized enterprise) segment, which constitute 98.8 percent of the total market;

* The average contract size of most of the outsourcing contracts continues to range from three to five years with companies looking at a contract renegotiation after the tenure.

* Network management has significant penetration rates but remains a priority for many organizations across all segments in 2007.