BT is outsourcing its IT development work to India because it has been unable to find the large numbers of highly-qualified IT staff it needs in the UK, according to a senior BT executive.
The company revealed that outsourcing to India had allowed it to cut its IT development costs by 40% to 60% but said its policy was driven not by cost cutting, but by the need to deliver better services.
BT, which began outsourcing offshore in 1995, has about 5,000 qualified IT professionals working on its behalf in India. They are responsible for 90% of its IT work - one of the highest ratios of IT outsourcing among UK firms.
"India gives us access to quality in terms of skills, experience and expertise. But it is all about the volume. All the skills we need over there we can get over here, but it is whether we can get them at the right scale," said Meryl Bushell, chief procurement officer at BT.
If BT had to rely on finding such high numbers of people with the same skills in the UK, projects would take much longer, she told a Chartered Institute of Purchasing & Supply conference.
"We are a global company, so why should we source everything from the UK. Our customers source globally, so why shouldn't we? There is a compelling case to look at the economics around the globe," she said.
Outsourcing has allowed BT to redeploy its UK IT staff to work on projects for its customers as the firm expands its services arm. Although BT has reduced its total headcount, no UK IT staff have been made redundant.