I recently helped the British Computer Society (BCS) put together an event that will take place at the BCS offices in Covent Garden, London, on 11 February. It’s focused on the globalisation of software testing and should be an interesting exploration of whether you really can outsource testing to an offshore location.

This is an area that the offshore players are all now exploring and so I brought together the BCS to provide their expertise of the industry, with the Indian technology firm Tata Consultancy Services, to provide some case studies of what is possible through offshoring. The head of testing from Carphone Warehouse will be there to talk about his own experience of offshoring and whether it can really work for testing.

It should be an interesting debate, with all sides of the debate represented and plenty of time for audience participation. It is free so please do come along and take part.

Indian IT services supplier Satyam has purchased Bridge Strategy Group, a Chicago-based management consulting firm. It’s a $35m all-cash deal that adds 36 management consultants to the ranks of Satyam, boosting its ability to deliver high-end management consultancy in the US.

Satyam has announced this purchase with the usual platitudes: enhancing leadership capabilities, strengthening the brand, adding higher value service offerings, but perhaps I’m missing something?

This is an all-cash deal. So that means the company just paid about a million dollars for each new employee. I appreciate that given the nature of management consulting most of the value lies in the head of each one of those consultants, but that is also the danger in purchasing this type of company. What happens if those guys and girls don’t like working for Satyam and they walk?

Satyam plans to continue using the Bridge brand in the US, but anyone who is an existing or potential customer will know that the company is really just a subsidiary of Satyam now. That can be seen as a positive - access to a large resource pool, proven expertise etc - or a negative - they can no longer give an impartial recommendation about the best place to get some IT work done.

It seems like the team at Bridge has negotiated a great deal, but I’m not sure how this helps Satyam to start competing with the likes of Infosys and TCS – who are both well down the road of developing their consulting offering, but in a more organic fashion. If they can afford to throw a few million around here and there then why not go for some big name hires and develop the consulting service more organically? It takes guts to do it because there will be a long lead before the business rolls in, but in the long term surely that is where the real value lies, building your own brand to be a trusted source of advice.

I’m staying at Disney World in Florida right now and looking out of my hotel window at some gorgeous January sunshine. Now this really is a good place to be in the middle of winter. The reason for being here is that the annual Lotusphere conference is taking place here in Orlando – a gathering of over 5,000 industry experts and techies, all with an interest in what Lotus is up to for the coming year.

My own experience with tools such as Notes has left me with mixed views on Lotus. It’s always felt a bit clunky to me, a bit too much of the “fat client” that we should have left behind ages ago, but though I am still only in the first day of the conference I can see that the company is changing fast.

I’ll write some more on this in detail over the next few days where it’s relevant to this blog, but the key message I’m seeing is that Lotus is trying to stake out a place for itself as the corporate partner of choice for anyone interested in collaborative and global work environments – clearly that’s an important message for anyone involved in global IT services

I know that this used to be the case ages ago with tools such as Notes and Sametime, but new tools are being constructed and released at a pretty fast pace now, with Notes as the framework that holds everything together. My view is that Lotus sees a new generation of users that are going to build their own solutions anyway using publicly available tools on the internet – like using Facebook when at work for social networking. Having thousands of employees all building their own solutions doesn’t help anyone, even if their intentions are good, so it seems like the Lotus mantra is to take the open tools of the teenager and to get them inside the corporate environment.

It’s an important place to aim for and could certainly give the company an entirely new relevance in a Web 2.0-enabled global services environment. As companies outsource more and therefore collaborate on projects across company borders and national borders, we all need better tools – this stuff can’t be managed by email alone for much longer. It’s not possible to get anything done when managers are fighting off hundreds of irrelevant emails per day.

Interesting to observe that as all the Indian IT companies set their sights on the big boys in the technology service sector, CSC is looking the other way. Last year, CSC launched a new programme called Project Accelerate aimed at competing head on with the Indian firms on smaller deals, focused on the $50m to $350m range. They see this mid-market focus as now being of increasing importance as the days of the mega-deal wither away.

As we know, the big players who might consider themselves ready for the huge multibillion-dollar deal have probably already explored that option - try finding a Fortune 100 company that is not already outsourcing now - so it’s true that the mid-market is ready for growth. CSC might be onto something.

Shock news from the US for journalists the world over. Shocking enough perhaps to make the hacks in the Computing office choke over a pint in their local Soho pub. The Miami Herald, a newspaper with no less than 19 Pulitzer prizes to its name, has considered offshoring journalist jobs to India.

It’s true that India has a lot of skilled journalists that use English in their professional life and I’m sure they are generally cheaper than those employed in Miami, but what’s the deal? The Herald felt that offshore journalists could edit some of the more formulaic pages in the newspaper, such as the classified ads and community news. This would then leave the local stringers to focus on local stories.

In theory it sounds like a good idea. After all, Reuters already use this model for some of their own journalism. Many – admittedly quite formulaic – news stories about corporate results are churned out by their news team in India for consumption the world over. However, could it work for a community newspaper?

After consideration the Herald decided it wouldn’t work, even on a limited basis. It’s obvious why. The more local and community focused those pages are, the more essential it becomes to be closer to the community – otherwise how on earth can the editor understand if information is right or wrong? Offshoring just can’t work in this type of scenario – though there may be some scope for certain types of editing or typesetting within the industry.

Additionally, style is a funny thing and does not travel well. Anyone who has read a business newspaper in India will know this. Contrast the use of English in the Economic Times in India with the Financial Times in the UK. Perhaps it is just my own personal preference (because I am English), but I hate reading news stories that are punctuated with constant acronyms and unexplained jargon. Give me the self-deprecation of Jonathan Guthrie any day please.

We focus a lot of time on justifying the various reasons for outsourcing in a defensive way, as if it is a strategy that needs to be defended from critics, yet there are many examples of outsourcing that have improved the business model for an organisation completely. These examples show that by working in partnership with an expert, you can improve your business – not just cut costs.

Take that bastion of the English arts, the Royal Shakespeare Company (RSC); the world-famous theatre company focused on plays produced by the bard of Stratford. The outward-facing image of an organisation with its focus on literature that is 400 years old hardly seems like a good place to find best practice in outsourcing, but think again.

Accenture has been using specialist data-mining software from KXEN to help boost audience numbers for the RSC at its base in Stratford-upon-Avon and for its London shows. Accenture has been able to create a system that segments the potential audience for different shows, allowing the RSC to target the audience better when tickets go on sale. The improved booking patterns are impressive with a 50 per cent rise in ticket buyers at the Stratford-upon-Avon theatre, a more than 70 per cent increase in regular attendees and significantly earlier sell-outs for London bookings.

Since asking Accenture to help, the RSC has even found it easier to plan future performances – as it understands the potential audience better than before. The audiences the RSC can target are now more clear-cut, and it has become possible to tell exactly when to communicate with different groups to maximise the response.

The RSC employs more than 700 people and sells more than a million tickets a year for shows produced by the company, so it is an arts juggernaut that depends on big sales for investment in future productions. Thanks to interesting and innovative projects like this, the company can hopefully keep any tragedy on the stage.

A new survey from the business process outsourcing (BPO) company Syntel reveals that more than half (53 per cent to be precise) of companies plan to increase outsourcing spending in 2008, up from 38 per cent in 2006 and 48 per cent in 2007. This was a survey of 250 IT professionals, presumably in the US as that’s where Syntel is based.

Commenting on the new survey, Bharat Desai, chief executive of Syntel, said: “In a weak or uncertain economy, companies look for technology solutions that will increase productivity, efficiency and savings.”

We all know what he is getting at. You can’t pick up a newspaper or listen to the business news on the radio these days without finding some concern that we are about to enter a global economic slowdown. The credit crunch in the US that leaped the Atlantic and subsequently caused a run on our very own Northern Rock bank is contributing to fears that a global recession is on the way.

Yet, the outsourcing suppliers seem to be rubbing their hands together. When times are good, big companies engage in strategic outsourcing largesse to improve their service offering and when times are hard they use outsourcing to cut costs to the bone, so the suppliers might argue that it’s a case of “heads I win, tails you lose” as far as they are concerned.

This feels like is has to be a step backwards for the industry in general. How many times have we all listened to the supplier community tell us vehemently that outsourcing is not about cost control, it’s about flexibility, access to improved services etc, etc… If a recession really is on the way then it would seem that there should be a new boom in offshoring, as companies that are still shy about the process decide to explore it just to save money. Which torpedoes the notion that offshoring can really be about anything more than just labour cost arbitrage.

So does that mean that the marketing efforts, advertising, and attempts to build credibility by the offshore suppliers are all wasted? Only time will tell, but it remains a fact that the original strategy of Tesco supermarkets, as defined by its founder Sir Jack Cohen, was “pile 'em high and sell 'em cheap”. It worked for Tesco, but are we really heading into a world of nothing more than “value” outsourcing?

First, I’d like to wish all my blog readers a happy new year. I’ve been away over the Christmas period and I’m now back in action so the blog will spring to life once more for 2008. What better way to start the year than to take a look at some of the outsourcing trends that might be making the news in 2008?

Some commentators have noted that the biggest trend in outsourcing this year is that there is no change, a steady-as-she-goes approach. In some ways that is true because the market is maturing, with both buyers and suppliers getting better at what they do and creating fewer surprises, but there are a few changes I predict this year.

First, let’s look at some of those ‘no changes’ to kick off the predictions. The US dollar exchange rate will continue to be an issue for many service companies billing in dollars and with costs in another currency. More mergers or acquisition activity can be expected – maybe this is the year one of the Indian majors will buy into the big league as rumours continue to suggest? The Indian technology firms will certainly continue their exploration of the consulting territory and buyers will insist on more flexible contracts.

So far, so similar to 2007. There are some new developments such as remote infrastructure management starting to grow and develop in importance now many of the offshore players are developing in stature, but I think the real story in outsourcing for this year will be the impact of the green agenda.

In most cases, companies that are overtly going green and examining the impact of their organisation on the environment are dealing directly with consumers. Consumers are becoming more concerned about the environment and those companies are responding to this consumer demand. The retailer Marks & Spencer has pledged to be carbon neutral by 2012. The supermarket Tesco plans to include carbon footprint labelling on all its products soon. Online bank First Direct installed new technology to reduce its use of electricity.

And looking beyond retailers and banks, the travel sector has the most to lose by not being seen as green by consumers. Airlines such as EasyJet are working hard to convince passengers that they can still fly and have a clear conscience.

The consumer is demanding these measures and pledges by socially aware companies. So how does that affect the outsourcing market? It’s very simple, because Marks & Spencer buys services from other companies, as Tesco does, as First Direct does. Every company sits in a supply chain, but where outsourcing contracts are involved it is becoming more common now for these socially responsible companies to insist on the same behaviour from their suppliers. If suppliers have not seen a request for proposal yet insisting on a statement of their green credential yet then they certainly will in 2008.

One trend that I foresee stalling in 2008 is the fledging African outsourcing story. I have talked about the opportunities in Africa before and though nothing has fundamentally changed, when stories such as the crisis of democracy in Kenya sit at the top of the news agenda it does not give foreign investors confidence to try out a new market for services. I was talking to The Times last month about opportunities for Kenya and frankly it looks a bit optimistic now. I mean, if you were exploring regions to work with right now and your job depended on getting it right then would Kenya still be on your list of places to visit?