Thought for the day: Exporting the future

Brian Thomson wonders whether outsourcing IT will bolster our competitors abroad.

New Asset  
Brian Thomson wonders whether outsourcing our IT will bolster our competitors abroad.



Short-sighted "experts" are recommending that we export software development because labour costs in India, Russia and China are a fraction of those in the UK. This will reduce this year's budget while we concentrate on the high-end and supplier management.

Here we go again.

Twenty years ago there was a UK car industry. Then British Leyland decided it could not compete with the Japanese in the family car market. It would concentrate on the "quality" sector. Have you ever driven a Lexus?

Buying a new TV, I looked at Goodman, Ferguson, Bush - all made in China, because "the UK cannot not compete on manufacturing costs". But JVC, Hitachi and Sony all manufacture in the UK. Some argue that Japanese firms are selling these items below cost to get into fortress Europe yet they have been here 15 years or more. Making a loss all that time? I don't think so.

What defines a company as British? Is it because the majority shareholders are in the UK, the registered office is here or it has a high-street presence?

Prudential exported its call centre to India. The management hail this a great success, and anyone who disagrees is a Luddite, but hang on: Prudential laid off most of its direct sales force. No-one in its expensive Reading offices has any direct contact with the customer. Why not export everything? The cost of moving paper around in Sri Lanka is a fraction of doing so in the UK.

Why does Sainsbury's need expensive office space in Blackfriars? It buys products from all over the world. Why not export its logistics operation - it only needs people here to beep the cornflakes through the scanners until customers can be organised to do it for themselves.

BT uses Indian software houses for IT and helpdesk software. Only the guys who physically terminate wires need to be here - everything else can be exported: call centre, billing, network management, job allocation and workflow.

With the current fashion for exporting operations - I prefer this more descriptive word to outsourcing - we are moving down a dangerous path.

Jump ahead five years and our partners in India, China and Russia will have had our "low-grade" jobs for some time. They are performing: they are well-educated, hard-working and aggressive. They have sophisticated bids and props, workflow and HR systems.
Prudential has a single UK office for form scanning and physical contact, having moved Egg to China to save costs. All Sainsbury's daily operations are run from the new building just outside Delhi and the IT staff have installed T1 links so the systems run better than they did in the UK on BT's ageing network. The local management, tired of the UK board's directions, is planning a hostile takeover.

BT's field operatives receive their daily job sheets via the internet, their PDAs talk to Chinese servers, their monthly pay is transferred directly into their Egg accounts. They drive their Daewoo vans to the supermarket on the way home, where the shelves are stacked to plans e-mailed from Delhi; the checkouts send sales information back.

Back to reality. This is not racist paranoia. I have a lot of respect for our foreign competitors, but I regard them as just that: competitors. In the global market, the UK should be exporting products and services around the world, not jobs. We have well-educated, capable people sitting idle.

Managers considering exporting a function should remember one thing: if you are lucky, when your job is exported, you might be allowed to follow it.

What do you think?

Are we in danger of falling behind in the outsourcing stakes? Tell us in an e-mail >> reserves the right to edit and publish answers on the website. Please state if your answer is not for publication.

Brian Thomson is a SQL Server and .net developer

Read more on IT outsourcing