Government IT executive disingenuous about Indian IT, but offshoring should not be default choice

I blogged the other day about a senior IT executive within a government department claiming Indian IT firms don’t have a chance of winning large government projects.

The executive claimed that Indian companies lacked the skills required to take over projects. “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.

I mentioned this to Bryan Cruickshank who is the partner in charge of its IT advisory business, when I met him yesterday. He said the person that said this is being “disingenuous” because the government already uses Indian capability on big contracts.” He was referring to the fact that large incumbents in government contracts, such as IBM and Accenture, offshore a lot of the work.

He said that it is a “no brainer” today for large organisations to have some sort of capability in India. “I say India because there are volumes of excellence there,” he said.

But he warned that offshoring should not be the default choice for any organisation and in particular the government. He said organisations need to take a holistic view to ensure they have the right balance.

He said the government needs to take a holistic view when deciding where to have work done and think about “how it wants the UK labour market to look in ten years time years.” He says a lot does go offshore by default when organisations want to cut costs.

“The higher value-add jobs should stay onshore.”

Could the government use a mix of onshore and offshore that can cut costs without damaging long term job prospects for IT professionals?

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My experience of government IT and offshore outsourcing:

Project A was performed almost entirely offshore, with serious communication issues between government client and supplier. System was delivered, found to be unfit for purpose, and quietly binned.

Project B was implemented within the government department using many onshored developers on rolling 6 month work permits. Many of these staff did not have the skills/experience required for the job, performed poorly and in some cases could barely speak English. But they were still charged out to the government client at the same rate as skilled/experienced staff. Some of them were eventually replaced with UK-based contractors, although the onshored developers were kept on by the supplier, who continued to charge the client for their "services". This project was eventually cancelled for a variety of reasons, including predicted poor value for money.

Meanwhile, the UK government and its major suppliers have offshored a lot of work and/or onshored a lot of Indian computer trainees on many other projects, with no discernible improvement in quality or value for money.

This approach has not worked in the past, so why do we keep doing the same thing and expecting different results?