The European Outsourcing Association annual summit all went well. In the end people were being turned away so in terms of getting delegates out for the event, it was a great success. In fact it has taken me nearly a week to blog the research results, partly because the after conference party was so good…

I ran an interactive session at the event, where I used some electronic kit to get immediate feedback from the audience. I’ll try summarising some of the feedback from the conference delegates.

To start with, delegates feel the globalisation of the outsourcing industry will soon see one of the major Indian players acquiring a large European or US provider. It’s a rumour that keeps returning to the fore, but with everyone believing it, will it really happen?

Some 75 per cent of respondents believe that such an acquisition is imminent. Consolidation was earmarked as a rapidly increasing industry trend by 68 per cent of delegates, in light of the recent acquisition of EDS by HP. Some other key findings that came up during the session include:

•    Continental Europe is no longer as protectionist about outsourcing and offshoring as it once was – it is now an accepted business practice across the continent. Only eight per cent of respondents believe that European countries such as France and Germany are far behind in accepting outsourcing as a useful business strategy.

•    New nearshore locations, particularly Romania and Bulgaria thanks to their recent entrance into the European Union, have brought a new attractiveness to the European offshoring market. Some 59 per cent of respondents believed Romania and Bulgaria are now more attractive to work with, while only nine per cent believed the attraction had been reduced.

•    The delegates realised that Eastern European nations do not have the scale of staff to resource huge outsourcing deals, with the majority (58 per cent) believing that different geographies are suited to different types of outsourcing projects. Only 17 per cent believed that Indian providers are leaps and bounds ahead of all other geographies.

I also asked some questions on the global credit crunch and the potential for recession. It’s not specifically related to outsourcing, but it does affect outsourcing decisions so I wanted to gauge the mood of those present. The first surprise (considering the doom and gloom presented each day in the media) was that 64 per cent of delegates had not seen any impact on their business, so far.

I tried to check on perceptions, rather than actuals, by asking if delegates were worried. Even then, 43 per cent were not worried and 17 per cent were not sure – a lot more than the worried 40 per cent. Then I asked if a recession might even be a good thing for the global outsourcing market, encouraging people to explore outsourcing where they might not have before. Some 64 per cent agreed that it would be a good development with 19 per cent not sure – a huge majority that would actively like to see a recession!

So it’s an interesting mix of results. Certainly the European market is maturing quickly, both as consumers of services and as providers, but the really interesting result for me was that no one in this industry appears to be worried about the credit crunch. Pass the Bollinger…

Today is the annual conference of the European Outsourcing Association (EOA). It’s been held in a number of European cities before including Frankfurt and Amsterdam in recent years, but this time it has come home to London.

I say come home, but there is not really a geographic home for the EOA. The organisation is modelled on the UK National Outsourcing Association, celebrating its 21st birthday next month. The NOA structures have been applied to other countries allowing a federal body to be created across Europe.

I’m presenting a completely interactive research session during the conference, where every delegate will have an electronic keypad allowing them to respond en masse to my questions. It should be fun, and as soon as I have some of that live feedback from every delegate in the room I will make sure I blog the results – watch this space.

Congratulations to the Indian IT services and training company NIIT for winning the coveted Digital Opportunity Award for its path-breaking work in spreading computer literacy and improving the quality of education at grass root levels, by the World Information Technology and Services Alliance (WITSA).

WITSA is a consortium of over 60 IT industry associations from economies around the world. Phil Bond,president and chief executive, Information Technology Association of America (ITAA) gave the award to NIIT chief executive Vijay K Thadani at the 16th World Congress on IT (WCIT) 2008 Awards’ Ceremony, the annual congregation of the world’s leading technology companies and associations held at Kuala Lumpur, last evening.

I was talking to the UK head of NIIT technologies, Ravi Pandey, on Monday, so he will be the next guest on my Talking Outsourcing podcast – which is very timely.

NIIT won the award for its ‘Hole in the wall’ scheme. This is an experiment devised for putting computers in very poor villages, where kids would never normally have access to IT systems. There is no training provided. Part of the experiment was designed to see how children could interact with user interfaces and learn about IT without being guided. It has been an amazing success and NIIT has contributed not only to the knowledge of how children learn, but also to the wealth of these villages – it gives the next generation a chance of education and hope.

I was just browsing some of the business news from India on the Sify web site when I ran into this story about municipal outsourcing. The author of the story writes about how it’s a terrible idea for local authorities to be outsourcing jobs such as street sweeping or fixing electricity pylons to private sector suppliers. In fact, he even calls this trend “a disease”.

When most workers across the world are considering how they can compete with workers from India and China, it’s nice to see how people in India can champion outsourcing at one moment and then fear it the next. Perhaps it’s an example of not-in-my-backyard syndrome.

In the UK it is now almost unimaginable for power supply to be handled by the government. I have distant memories of government-controlled power in my childhood: basically the memories consist of having to remember where the candles are located as another power cut loomed. Who can remember the last power cut they ever suffered in London? And not only service levels have improved. The retail energy sector in the UK allows consumers to change energy supplier at the click of a button. I showed the Uswitch web site once to a French friend of mine and his jaw hit the floor when he tried understanding the concept that there could be different companies competing for your electricity or gas bill.

Last summer, a guy who works for Veolia – a supplier subcontracted by Westminster Council to empty the bins and sweep the streets in central London – started swearing abuse at me. I took his photo with my camera phone and sent it to his company. The next day he was fired. Can you imagine that kind of reaction to a misbehaving municipal street sweeper?

I don’t believe that municipal outsourcing is a panacea for all ills, but every time I have worked with public sector managers they have time and again argued that the greater transparency of service available with an outsourced contract helps them to deliver their public service, within an agreed time and budget. Perhaps India should try some of the medicine it dishes out to the rest of the world?

It looks like a large number of IT jobs in Manchester might be under threat at high street bank Lloyds TSB. The company has announced that 250 jobs are to be cut from an IT division employing around 470 people. Expectations are that a software testing unit in Wythenshawe employing 132 people might be cut altogether taking the brunt of the cuts, though a large number of contract staff would also be released.

The unions expect that the testing work is going to be transferred to the facilities the bank has in India. Typical union statements such as ‘kick in the teeth’ pepper some of their statements about the intended move.

Though there is an emotional reaction to this news, there has to be some pragmatism too. Software testing is becoming a largely automated process. Even where it requires human intervention, the largest pool of testing experts is now on the subcontinent. It makes good business sense to do the work there for the expertise, let alone any reduction in cost.

The high street financial service companies have shown that there does not need to be a flight of all services to some remote offshore destination. Most consumers hate having their customer services call answered in a remote country. Regardless of the quality of service, they just don’t like it. Most of the banks have taken this on board and so we have seen some of the more reckless offshoring of voice-based services coming back home. Companies have even used their local call centres as a form of competitive advantage.

But software testing? However much the union protests, it’s not something that the man on the street is really aware of. And this ignorance is something that the banks are very aware of. So long as the people answering the calls are local, almost any other service can be sourced from any location. Software testing in India is just one example of this. Take any of those companies that trumpets their local British call centre and I can guarantee that significant sections of their business are performed using offshoring or offshore outsourcing – just it’s not the bit the customer sees.

Two giants of the international sourcing industry have joined forces. HP has revealed that it is to acquire EDS for $13.9bn. As EDS is the second largest IT services player in the world and HP is the fifth, this creates a new $40bn a year leviathan – a real challenge to the beast that is IBM.

The business press is excited about the deal, and the way the story seemed to play out in the press makes it look as if the story leaked before either company wanted it to be public.

Although in revenue terms this will create a giant IT services firm, there is one area where it would not excel – management consulting. As everyone knows, EDS sold off its management consulting arm AT Kearney two years ago and HP has no real expertise in that area either.

In her blog for CIO magazine, Stephanie Overby hints that Accenture might be next. And why not? The combined might of HP and EDS could probably consume Accenture and if the merger works then the new entity would be a genuine rival to IBM, both in size and range of services.

It looks like the predicated wave of mergers and acquisitions in IT services is not only going to be at the second tier of smaller companies.

I facilitated a meeting the other day for the board of the UK India Business Council (UKIBC). This is the (fairly) new body created from the earlier Indo-British Partnership Network, the major difference being that the IBPN was essentially a networking group, yet the UKIBC is a well-funded body focused on the business relationship between India and the UK.

UK Trade and Investment, the government organisation that promotes British business overseas, has released £1m of funding into UKIBC. This is intended to create a raft of new research and services to British business, allowing an easier relationship with India.

Though the UKIBC covers all sectors, it has some areas of focus and the hi-tech and sourcing sectors are of great interest. Some of the services UKIBC can help with include helping British companies wanting to explore the offshore option in India. Although UKIBC has received funding from government, it operates as a private sector firm and the intention is to focus only on operating in the private sector – so it’s a good place to go for real business advice.

I had not interacted with the council before, but as I looked around the room I recognised a number of faces from my own work on linking business between India and the UK. It’s a great team they have assembled and I hope they do a good job.

Does anyone really read any of the white papers churned out by IT suppliers? I don’t want to sound flippant because I know that there are some great publications produced by some organisations, but generally the quality is dire.

Let’s face it, the role of most commercially-oriented (as opposed to academic) white papers is either to function as a marketing device – bits of paper to hand out at conferences – or as an ego boost to the consultants who write them.

I just received two white papers by email from one of the major international IT suppliers - take a look at a quote from one of them:

“Many IT organisations have a metrics handbook that suggests the set of metrics to be followed. If such a handbook prescribes a set of mandatory metrics, I would like such metrics to be rather small in number. A larger set of metrics can remain optional, leaving it to the discretion of the project. Now the question is - how can one decide what would be the right metric. It is the question of finding the right metric first before getting the metric right; the irony that comes out of Joseph Juran’s adage do right things before doing things right.”

Excuse me? Now, a paper on improving software quality is never going to be a gripping read, but it should be possible to read it without thinking you just wandered into one of the drug-taking sequences in a Hunter S. Thompson novel.

So what’s the answer? In my view it’s staring the IT companies in the face, the humble blog. If those consultants really are as smart as they claim then they should be able to produce short, regular comment that is far more interesting and useful than the dirge they presently produce. These are supposed to be IT companies, so how come they seem wedded to the idea of supporting the printing press forever more?

I was out last night in Soho at a bar next door to the Computing office for the launch party of a new outsourcing magazine – Sourcing Focus.

Chris Middleton, an ex-Computing staffer, is editing the new magazine and it will feature outsourcing content from the National Outsourcing Association – along with news and blogs.

In theory it’s competition I guess. People looking at the blogs on Sourcing Focus might not be here on Computing checking out our blogs, but I don’t feel worried. The very nature of online content means people subscribe to a large number of news feeds and use what is useful now and then, rather than exclusively using one source of information as the Gospel version of the outsourcing truth.

There is still a real shortage of good quality information and writing on outsourcing. It’s a huge topic affecting millions of people, yet much of the writing on the topic remains ill-informed or just plain dull. I’m involved in the industry and yet my eyes glaze over reading a lot of the information sent to me by marketing departments and eager PRs.