Following the news that Birmingham City Council is offshoring some IT jobs to India there has been a lot of reaction. The majority of people I have spoken to believe there will be a lot more offshoring after the Birmingham strategy goes through.
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But a colleague of mine asked Geoff Connell, chair of Socitm London, about this today. He does not think the local government offshoring floodgates will open, but rather the use of shared services will increase (see below for more from Connell on shared services).
“I don’t think we will see much more, I’m not hearing other people talk about it at the moment. I think Birmingham is being brave to be frank. But pioneering that approach and taking a risk is great for the community because we can all watch and see what happens, and if it is successful others will follow. At the moment a move to shared services to reduce spend is the way councils are going, with multiple authority working together on procurement.”
Connell says he has direct experience of small scale offshoring in local government. “We have done some offshoring [in the London Borough of Newham] having moved to an Oracle ERP suite which is hosted in Houston Texas and some migration and development work from India. That had mixed results and some things didn’t work so well. [In India] there’s a tendency to say yes to everything sometimes they need to be able to say no. We’ve learnt from the experience and will use [offshoring] again but where appropriate.”
Connell also said this about offshoring in local government:
“Offshoring is a tool that is appropriate to use in some circumstances but comes with a health warning as to where it is and isn’t appropriate.
There are challenges such as data protection when shipping certain data offshore and problems with cultural and language differences.
You have to specify something very clearly for it to work and may need to employ a specialist [to oversee the project].
As a local authority you also have a role to employ local people and develop new talent. So it’s not a panacea. But having said that price point can be very low and there are times when does make sense.”
See Connell talking about shared services in local government here.
Also tell me what you think of Birmingham’s decision to offshore IT jobs to India.