Asda will reveal how it saved 50% on the cost of a Y2K project by using an Indian offshore outsourcer, at the UKCMG users conference in York next month.
A number of UK firms have achieved savings by outsourcing with Indian companies. Following successful outsourcing of its Y2K work, rival supermarket Sainsbury's is expanding its relationship with Indian company Infosys.
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The session at the UKCMG will discuss the reasoning behind Asda's decision to go off shore and how it managed the project.
Douglas Cliffe, the IT manager at Asda who was responsible for the supermarket's Y2K programme last year, said, "We had a particular IT system where we were not making any progress on Y2K compliance."
Having put the work out to tender, Cliffe said the bids from UK firms were too costly.
Cliffe then approached GSoft, a UK firm which specialises in outsourced projects using Indian software firms.
Even though Indian firm RS Soft's bid for the work was 50% cheaper than bids by UK software companies, Cliffe said he was pretty nervous about the idea of using offshore outsourcing.
Moreover, IBM Global Services, which was Asda's main IT outsourcing contractor, did not win the bid for this project, yet it would need to be involved in managing the deliverables.
What convinced Cliffe that RS Soft would be able to deliver the work was a visit to India to meet the company.
Asda was provided with a project manager from RS Soft and the two firms established an escalation process to resolve any problems.
Cliffe advises companies planning offshore development to use a third-party expert based in the UK if they are not experienced in the procedures. GSoft, which acted as a third party in the Asda deal, took part in regular project reviews and was in regular contact with RS Soft in India.
Cliffe said he is convinced that if managed correctly the offshore approach works. "If I needed to outsource a software project again I would go to India."