For how long will there be no Indian firms among top government IT suppliers?

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It is worth mentioning that the main suppliers that met government Minister Francis Maude yesterday to discuss reducing costs did not include any Indian IT companies.

How long will this last I wonder? If they want to cut costs, up to 20% according to some, they will probably need access to lower cost labour.

That screams India, China etc to me.

This is the full list of suppliers that met Maude yesterday:

1. Hewlett Packard
2. British Telecom
3. Capgemini
4. Fujitsu
5. Capita
6. IBM
7. Telereal Trillium
8. Atos Origin
9. CSC
10. Logica
11. Steria
12. Oracle
13. Siemens IS
14. C&W
15. Microsoft
16. Accenture
17. Serco
18. G4S
19. Vodafone

 

5 Comments

I agree. Although most of these suppliers do have significant operations in lower-cost countries such as India, the reality is that the larger Indian-based suppliers such as Wipro, TCS, Genpact and WNS for example are all generally more capable of offering a lower-cost solution for both ITO and BPO contracts, and with equivalent standards of quality. TCS has already had some success in the UK public sector so I have no idea why they, for one, were not included in this list.

"If they want to cut costs, up to 20% according to some, they will probably need access to lower cost labour."

Most of the companies listed already charge margins of 35% or more over the going rate for UK contract staff, 50% or more for UK-based employees, and an even more obscene margin for onshored/offshore staff (who also pay no tax in the UK). In most cases, they offer their government clients the services of a small number of in-house "experts", plus a larger temporary workforce of contractors/onshore/ICT/offshore staff. In other words, they act mainly as a bodyshop to recruit people who could be hired much more cheaply by the end client directly.

So if these companies want to cut the costs of labour to their clients, they already have ample scope to do so by reducing their inflated margins to levels typically enjoyed by other recruitment agencies.

And if their government clients are serious about cutting costs, they should insist on open publication of daily rates actually paid to all staff, which would reveal to the taxpayer just how much of their money is being skimmed off by these bloated parasites, and how little of it reaches the people who actually do the work.

The government could then insist that these crooks charge no more than e.g. a 10% or 15% margin over the published daily cost of any temporary staff taken on for the project.

If they can offer better quality for the same (or less) cash, good luck to them, but in many cases these organisations make much of their profit by driving down their own labour costs, regardless of quality, while still charging their idiot government clients a hugely inflated margin for their "services". The end result as we have all seen in recent years is the loss of UK-based jobs, experience and skills, growing strategic dependence on offshore IT sweatshops, and generally poor value for money for the taxpayer.

UK government projects have already been outsourced and at least partly offshored for years, and it hasn't exactly lead to a drastic reduction in costs or sudden improvement in quality, has it?

As for the UK taxpayer paying Indian suppliers for UK government projects, why on earth should we be subsidising a foreign IT industry instead of our own?

Matt is right.
These suppliers often provide UK contractors or ICTs from Indian suppliers to government projects at double or triple the rate they are paying.

The lack of Indian service providers is more likely to be a political fudge. Publicizing the names is a form of denying that offshore is in the governments agenda.
There are a number of departmental deals with Indian offshore providers but only where the work is "non staff impacting" ie the work is new and thus nobody is displaced
You want 20% plus savings then you have to accept that roughly 35% of most IT expenditure is labour orientated. Halving the staff cost is easily possible.
Side effects are unemployment and increased benefits spending. But yes it is there to be had.

Yea, well, not all the unemployed collect benefits first & then half of the employed get very few hours.

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