Can the UK preclude China for offshore IT services?

The government needs to cut its costs and IT is one area where it can do this without compromising services. In theory that is.

The government has made it clear that it wants offshore companies to bid for government work. The coalition government has already been cosying up with India. And lets not forget it left Intra Company Transfers out of the immigration cap, which was seen by many as a compromise to keep India on side.

But the government has also been out to visit China.

It makes sense. India and China are the two fastest growing economies and they have massive populations who might want to buy British made goods and services. But the catch is that these superpowers in the making will want something back.

Big IT contracts with the UK government could get the ball rolling.

I met a senior executive at a Chinese software house recently and he told me he asked a government official if Chinese IT companies have a chance winning UK government contracts. The government official told him: “We do not preclude China.”

In the past the government has not really offshored that much to India in comparison to the private sector. So if it to make the leap now and offshore loads of work. why not China as well?

A UK consultant told me recently that if the government is to cut its IT costs it must adopt private sector mentality, which includes offshoring work.

And China is already being used by lots of Western companies even though you do not hear as much about it as the work being done in India.

I asked Thomson Reuters global head of Enterprise Information Mike Powell about his experience with Chinese software development. Thomson Reuters has development centres in Hong Kong and Beijing.

He said it gives the company access to a large number of highly skilled developers and allows it to scale up quickly.

China has 350,000 computer science graduates every year and they cost less than their equivalents in India. Chinese service providers such as Bleum and VanceInfo are currently targeting the UK market for growth.

| am attending a media briefing with the China-Britain Business Council (CBBC) next week so look out for more on China IT. If you have any thoughts please comment.