Could Government offshore work by stealth to avoid negative headlines?

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The jury is still out on whether the government will offshore lots of work to slash costs.

 

Countries like India cannot be discounted as destinations for public sector organisations to have their business processes completed at much lower cost.

 

The problem for the government and public sector organisations is this will involve redundancies. Lots of them potentially.

 

This would mean an unpopular government and would be an expensive strategy as workers, some of which will have decades of service under their belts, will have to be paid off.

 

But is there an alternative that people are happier with. I was at a presentation the other week about the next year in outsourcing. Someone mentioned the NHS Shared Business Service in reaction to a question about offshoring government work.

 

What he said is that through the joint venture between the NHS and Steria the NHS has offshored work gradually without the negative headlines that go with it.

 

NHS SBS is a shared business service that uses an Oracle platform and a single set of processes to run the back offices of NHS trusts. About 100 NHS trusts now use the service.

 

It has been a success. It promises trusts up to 30% cost savings and even paid the NHS back £1m this year.

 

When the service was first set up, half the workers, some 300, were immediately in Pune India when SBS was set up and this has grown to 1200 as new business has been added.

 

The NHS trusts that decide to use the service will obviously have to make redundancies. But over the years there has not been a huge backlash against trusts offshoring work through SBS. Not many people realise thousands of NHS jobs have even been offshored.

 

So could that be the way to offshore in the public sector?

 

1- Set up a joint venture between private business and government department.

2 - Look for work within that public sector family, such as police forces, NHS trusts or fire services.

3 - Gradually offshore work as new customers are added.

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Steria is a French-based IT services company with offices across Europe and in India, but it gained its big Indian base by buying up Xansa in 2007.

Xansa's history encapsulates the overall direction of the UK IT industry, from pioneering British startup, floating on the stock exchange, increasing offshore acquisitions, to glorified gangmaster importing offshore workers onto UK public sector projects, and charging the taxpayer up to £700 per day for inexperienced Indian staff on revolving-door work permits while paying these staff low offshore salaries and minimal tax-free allowances in the UK. Then, having played its part in wrecking the UK IT industry, it was sold off to the French.

Makes you proud to be British, doesn't it?

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About this Entry

This page contains a single entry by Karl Flinders published on November 12, 2010 1:35 PM.

Woman who ran successful NHS shared service talks about the cross government opportunity was the previous entry in this blog.

The highs and lows of a life turned upside down by IT offshoring is the next entry in this blog.

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