French government awards French companies contracts. That would never happen here.

In a recent meeting with Computacenter, its managing director Simon Walsh was calling for the UK government to award more contracts to UK businesses.

Well at least give them a chance.


Computacenter is a decent sized IT supplier, but its share of the public sector is Wafer Thin.  


There are calls for more use of offshore suppliers by the government and this makes sense, but what about UK suppliers?


The reason I write this post today is because I have just seen a press release abut the French government renewing a big contract with a consortium of Steria and Capgemini.


I always think governments on the continent do a bit more to protect their own. This, for example, can be done through tough employment laws to protect individual IT professionals from their jobs being offshored, or giving French companies a good chance in winning contracts. It could be argued that there is too much protectionism.


We don’t want another Common Agriculture Policy, with the French IT industry blockading internet pipes (not quite as dramatic as French farmers on the rampage at ports). 


Capgemini and Steria win a lot of business in the UK government. But are they better than UK players like Computacenter?

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The UK government should pursue the best value for money, but consider the inherent discount of using UK based companies and/or UK based employees that pay taxes in the UK. Choosing to use UK employees and companies means 25-50% of the cost is returned in taxes, making the net cost to the givernment much lower than other options.

The French know this and most governments recognise that it is in the best interest if their countries to support local businesss.

Steria is a French company that grew partly by buying up other companies with large offshore bases, so it actually performs a lot of work offshore, both for its clients and its own back-office functions, as well as onshoring Indian staff to the UK.

For example, see this report from the Information Age website on 4 January 2011:

"Head of public / private partnership NHS Shared Business Services says health service could save millions by outsourcing more to India

The managing director of a joint venture between the NHS and IT outsourcing provider Steria has called for greater use of offshore resources by the UK’s health service."

Information Age, 4 January 2011

Many consultancies are like Mafia banks - officially based in one jurisdiction to give the appearance of acceptability, but actually laundering jobs offshore wholesale.

I hope UK government IT purchasers have read March's edition of PC Pro magazine, specifically the letter on page 167 from somebody who is:

"...part way through re-working a major project for a charity that offshored an application only to find that what was delivered wasn't fit for purpose and had taken significantly longer to implement, and cost significantly more to build than projected."

Another happy customer for the offshore juggernaut, eh?

Here's another triumph for the potent combination of public sector ineptitude and the offshore IT industry from the Select Committee on Business and Enterprise Thirteenth Report (2008).

Companies House outsourced its re-development of an existing system, to be implemented in India, but the results were so bad that £12.1 million in development costs spent from 2001 to 2005 had to be written off completely, before CH then took the work back in-house and spent a similar amount of money again on re-writing the system themselves.

The Select Committee on Business and Enterprise was told that:


although "that work was not wasted" as "it was preparatory work leading up to what was then the development of the system in-house", very little of it had added value to the system as it works now and so "should not be forming part of the carrying value of the new system" ...


The Select Committee also reported that the resulting system (known as CHIPS) still performed worse in some respects than the system it replaced.

It is worth noting that CH essentially does the same thing now that it has been doing for 150 years, that they had an existing system to use as a working model anyway, and they had *years* to figure out their own business users' requirements, yet they and their offshore "partners" still managed to screw up the complete system development life-cycle to no discernible benefit.

So do you really want the same approach attempted with your NHS records?

Meanwhile good old Vince is going to India to assure them we will keep using them:

Priceless, the Government only worry about the projected cost going in, "spoiling the ship for a hapath of tar" springs to mind.

In the rest of Europe they support their home based workers (even those from other EEC countries), something the British Government and companies need to learn.

Nice to have you back BobF