I have recently written about IT and back office automation and its impact on outsourcing and more particularly offshoring. Here is a guest blog post on the subject from Paymon Khamooshi, director at UK-based developer Geeks Ltd?
Should UK firms ditch offshore outsourcing and embrace automation for the sake of security?
By Paymon Khamooshi
“Offshore outsourcing was once heralded as the saviour of IT departments as it freed-up budget by pushing lower cost programming and IT support onto a different balance sheet. The idea was that it would save on expensive UK-based outsourced projects but also enable departments to cope with IT skills shortages. For many years it has worked well and India in particular has benefitted but surely we have reached a point at which technology is now enabling companies to meet programming and support targets that negate the need for offshoring?
When ‘Bob’ the programmer decided to outsource his job to a Chinese programming firm last month, it raised all sorts of questions about the validity of offshore outsourcing, not least as a secure channel for quality not just cost-effective applications. While for Bob, the Chinese deal meant that he could spend more time on eBay and at lunch, for Verizon, the client, it meant massively increased risk. Verizon has reported that two-factor authentication tokens and passwords were sent to offshore coders to enable them to access corporate systems. While Bob’s case is unusual, for offshore outsourcing, the process is not.
The story has raised the question of whether or not offshore outsourcing is actually of long term benefit when quality control and potential security risks are thrown into the mix? The Nat West IT meltdown last summer and Standard Charter’s data loss had demonstrated clear reputational risk from using offshore IT outsourcing.
So are businesses wise to employ offshore programming and IT support?
The economy unfortunately dictates the decision making, as many companies will continue to put cost-benefit over risk, crossing fingers and trying to shore-up any potential holes that could be exploited through passwords and code falling into disreputable hands. I would argue that it is never wise decision but I understand that sometimes it has been necessary.
The challenge now of course is how to use rapidly developing technology and programming skills to help these businesses meet cost challenges but also, and more importantly I think, reduce risk. In the light of the Capita strike last October, there is also the issue of keeping local workers happy. No one wants to pursue policies that create turmoil within a business but as Capita realised last Autumn, offshoring can have ramifications throughout an organisation. The cost of this is Immeasurable as it hits morale and productivity.
So how far can technology and automating processes actually go in giving UK businesses a viable alternative to offshore outsourcing?
A number of businesses including UK-based technology companies such as Geeks Ltd, are developing tech-based solutions to speed-up programming time and therefore reduce project costs. For example, Geeks has its own IT automation software product called M#, that cuts .NET development time by up to 75%. We know there are other solutions for other programming languages. Reducing dev time is important especially in a market where skills are in short supply and good programmers cost a premium as it means that the UK can compete with offshoring on cost alone.
What does this mean to UK businesses? Ultimately it should mean a return to in-house projects or joint projects with UK-based development companies. Programming automation in particular would enable IT project managers to exercise greater control over a project, minimising risk and allocating less time and therefore cost to a specific job. We know this because we have already seen it with our customers and it is still early days. There is willingness in business to keep projects in the UK, especially given the high profile problems at NatWest and Standard Charter. We just have to use the technology and automation that is available to give them the ammunition to meet their budgets and targets while minimising risk.
Interestingly, Verizon found that a remote worker’s link was the initial access point for 74% of network intrusions. It’s surely enough to make any business nervous about employing outsource developers, especially if they are employing freelance programmers by the name of Bob.”