Offshoring not just about cost for Morrison Utility Services

I interviewed Graeme Cross yesterday at the Gartner Outsourcing and IT Services Summit. He is the head of business systems and development (CIO for short) at Morrison Utility Services.

He told me why the company offshored its software development to India and it was not just for cost savings.

Morrison Utility Services is the company that lays pipes and cables and other things on behalf of utility companies.

The company’s most important IT system is its Work Management System. This system will kick into action whenever a client, such as a water, gas and electricity companies, request a job. It sees the process from request through completion and right to payment.

Each customer has its own sub system.

Morrison moved from in-house development when it decided the technology it had was not delivering the functionality it needed. It wanted to harness mobile technology and web based services.

One of the main problems it was having is that its staff are mobile and had to be given access to their own desktops wherever they were. So it wanted to move IT systems to the cloud. It could not move legacy systems to the cloud because they were too old said Cross.

It moved to’s platform as a service. It was able to develop its own applications on this platform.

But the company did not have the skills set it needed in its 12 strong software development team. It decided it needed to outsource.

It looked at TCS, Wipro, Logica and Zensar Technologies.

It chose Zensar Technologies. This is about the 10th biggest Indian IT service provider.

So the benefits for Morrison according to Cross were:

Lower cost – because software developers cost less in India
Flexibility – because it can flex up and down the number of developers it uses at any one time
Access to skills – because its in-house team did not have the cloud and mobile development skills it needed

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What happened to the in-house team?

Could they have beem trained?

What happens when charges start rising?

I agree... seems like management did a poor job of managing their local, in-house team. Now, they are planning on managing developers across the globe? Let us know how that works out for you. Not to mention what will happen when the arbitrage benefit is diminished and you are paying through the nose for your 'service.' It has already happened... offshore resources are not exactly cheap anymore. Let's not even get into the hidden costs involved.

Also, none of the concepts mentioned here are new, just new marketing for existing technologies. 'Cloud computing?' You mean, like external service providers? They've been around forever. So, the contracts changed to pay as you go... big deal. That matters to whom? Accountants? The technology didn't change... you will still have the same issues... problems with software bugs, integration, security issues. We are splitting hairs when we talk about where the software is deployed. Oh, that's right... the people that attend these conferences are not technology-minded, so they gobble up marketing BS like this.