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Innovation Plan Protects Local Jobs
Released 30 January 2001

An Australian software company that spends nearly one quarter of its revenues on R&D reports that the Federal Government's $3 billion innovation statement has increased the chance of it boosting software development in this country.

Prophecy International, an ASX-listed multinational software company, was considering sending certain software development activities offshore, to places such as India where high quality developers are available at relatively low cost.

Adelaide-based Prophecy, which spends 23 per cent of its revenues on R&D, praised the Innovation Action Plan released yesterday for its 175 per cent tax rebate on labour-related R&D expenses. "That has certainly tilted the scales back in favour of Australia," said Prophecy CEO Ed Reynolds.
Prophecy International develops the world-leading e-Foundation software that is used to design and deploy robust, web-enabled applications for both public and private sector enterprises in a very short timeframe.

The multi-million-dollar company is currently undertaking a redevelopment of its e-Foundation software using the Java programming language, which will give it complete transportability across any computing platform, including the Internet.

Mr. Reynolds said Prophecy's global operations meant it was obliged to select the most cost-effective environment for high quality software development.

"Indian software developers are a lot less expensive than in Australia," he said.

"There's a whole industry set up in South India, around Bagalore, to provide the western world with software development. The quality is apparently very good if you get the specifications right.

"The vast majority of our R&D expenses are labour-related costs, so the 175 per cent tax rebate is definitely a factor when we're deciding whether to do development in Australia or overseas. This incentive will definitely help Australia."
Prophecy International's board, which is due to meet this week, will discuss the affect of the various incentives in the Federal Innovation Statement.

Prophecy has its software installed at more than 850 sites worldwide. The software is used by client organisations ranging from the South Australian Govenrment and ANZ Bank in Australia to US online travel group, the State of Colorado and National Express, the biggest intercity coachlines group in the United Kingdom.


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