Will the next government embrace offshoring?
In my last blog I mentioned the 2010 British general election, and this morning I was chatting on the phone to Dr Roger Newman, head of UK Manufacturing and Digital Convergence Relationship Management at Mahindra Satyam. I took the opportunity to ask him for some of his views on the 2010 election and how it might affect the climate for sourcing.
Roger believes that the public sector, in general, has a lot to learn from the private sector IT and IT-enabled services business. He said: “It would make good sense for the public sector to learn some of the lessons of the private sector. The private sector has learned that you can make significant savings and improve efficiency – and improve quality - with a global sourcing model.”
It’s true. A lot of lessons have been learned about how to make these services work across borders. Roger went on to explain: “I think perhaps a change of government might make the environment right for doing more. At present I think people [in government] are still worried about the loss of jobs and upsetting the public, but I think with a new government, and if the economy picks up, then you will see a new approach to the public sector. Let’s face it, if you take a step back, they haven’t been doing a great job with their IT spend.”
That’s quite an aggressive vote of support for more offshoring, and an expectation that a Conservative government will behave in a markedly different way to the present Labour administration. I asked Roger specifically about offshoring and whether he really feels the public sector will do more of it: “I think there will be more of an exploration of that. There is a global sourcing industry out there. The government realises that the economy is global. Money comes back into the UK from places like India. It’s not like you are just throwing money abroad. It does come back again.”
It’s understandable that a firm headquartered in India would support additional offshoring, but I’m not convinced that a Conservative government would instigate a new wave of offshoring in the public sector, even if they end up securing a landslide election victory next year.
It could just be that Mahindra Satyam, along with every other firm that may potentially benefit from future government contracts, are now currying favour with the Conservatives and rejecting any relationships with Labour – expecting those present ministers to all to be cast adrift to the Job Centre soon.
But lobbying aside, it still seems far-fetched to expect the British public sector to embrace large-scale offshoring in 2010. More shared services perhaps, but I still can’t imagine a new Prime Minister wanting to take on the wrath of The Sun and the public sector unions over offshoring.
Roger believes that the public sector, in general, has a lot to learn from the private sector IT and IT-enabled services business. He said: “It would make good sense for the public sector to learn some of the lessons of the private sector. The private sector has learned that you can make significant savings and improve efficiency – and improve quality - with a global sourcing model.”
It’s true. A lot of lessons have been learned about how to make these services work across borders. Roger went on to explain: “I think perhaps a change of government might make the environment right for doing more. At present I think people [in government] are still worried about the loss of jobs and upsetting the public, but I think with a new government, and if the economy picks up, then you will see a new approach to the public sector. Let’s face it, if you take a step back, they haven’t been doing a great job with their IT spend.”
That’s quite an aggressive vote of support for more offshoring, and an expectation that a Conservative government will behave in a markedly different way to the present Labour administration. I asked Roger specifically about offshoring and whether he really feels the public sector will do more of it: “I think there will be more of an exploration of that. There is a global sourcing industry out there. The government realises that the economy is global. Money comes back into the UK from places like India. It’s not like you are just throwing money abroad. It does come back again.”
It’s understandable that a firm headquartered in India would support additional offshoring, but I’m not convinced that a Conservative government would instigate a new wave of offshoring in the public sector, even if they end up securing a landslide election victory next year.
It could just be that Mahindra Satyam, along with every other firm that may potentially benefit from future government contracts, are now currying favour with the Conservatives and rejecting any relationships with Labour – expecting those present ministers to all to be cast adrift to the Job Centre soon.
But lobbying aside, it still seems far-fetched to expect the British public sector to embrace large-scale offshoring in 2010. More shared services perhaps, but I still can’t imagine a new Prime Minister wanting to take on the wrath of The Sun and the public sector unions over offshoring.



By now I think it is an accepted fact that we all operte in a global environment and gone are the days of protectionism. Every sector is looking to reduce the operating costs and since technology is the enabling factor here for offshoring, yes, they will embrace such technologies and for that matter any other means that can reduce the costs.
Having said that, politicians are very good at presenting old wine in new bottle and so if the Tories come to power, the rhetoric may be there " no more offshoring", but they would do so in some other fashion.
Posted by: Murali | Wednesday, 02 December 2009 at 10:39 AM
I think they should, in this time of recession the only hope for small and startup business is by outsourcing.
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