Do Indian IT suppliers stand a chance in large government deals?

A colleague of mine was talking to a senior IT executive in a government department and he said Indian suppliers don’t stand a chance of winning big government deals because they lack skills associated with taking over a contract.

According to the source the biggest concern around working with Indian companies is the skills transfer between the incumbent supplier and the new partner. “A lot of the work we do requires suppliers to work very closely with the customer and the problem is, [Indian suppliers] do not have the capability onshore to meet these demands,” the source said.

Here is the full story.

But didn’t George Osborne open the door for Indian suppliers? He said it was “an opportunity for Indian IT contractors to get involved” an offer their services to the UK government.  

Osborne, along with senior UK government and business figures including the PM, was in India trying to promote Britain to the expanding middle class in India.

Lee Ayling, managing director at sourcing consultant Equaterra, said the opinion that Indian suppliers have no chance of winning large government deals “is a typical example of an uninformed government buyer who are a dying breed.”

He said the Indian players do have capability and are already involved in deals where they have to transfer capability and knowledge.

He said some of the Indian palyer will be more and more willing to take UK staff on as part of the deal. “The government needs to make use of some global delivery.”

Analysts including Ovum have suggest that now that the government has the drive to cut costs jobs will most probably be offshored to lower cost regions.

I wrote an article back in June 2009 about the All Party Parliamentary Group focussed on improving trade between the UK and India. The feeling was then that the UK public sector could do a lot worse than outsource more to Indian IT firms.

No Indian supplier is in the list of top 19 suppliers to government. In an earlier blog post I asked the question: how long will no Indian suppliers be in top government suppliers list? 

Robert Morgan, director at sourcing consultancy Burnt-Oak Partners, says the Indian suppliers do have capability but it depends on whether the government is willing to use a mixture of delivery from onshore and offshore.

“If the government wants the service to be delivered fully onshore the Indian firms cannot compete because their engines [that make them competitive] are offshore.”