How many IT projects do you hear about that are really life-changing? How many IT projects have the potential to really improve the life of more than a billion people? And, how many projects like this were started by one individual putting his hand in his pocket to inject some personal cash into an idea he had while walking down Piccadilly and observing British ambulances tearing up the road to the next RTC (road traffic collision – I knew all those episodes of Casualty on the BBC iPlayer would come in useful eventually)?

Ramalinga Raju, the founder and chairman of Satyam, was the man walking along the street near to the Ritz hotel in London a couple of years ago when those ambulances went by. He wondered out loud to some of his colleagues why there was no centrally coordinated emergency service in India that could get an ambulance to a person in need within minutes.

Instead of just wondering, he put £1.5m of his own cash into a personal side project, creating a call response unit and equipping ambulances with the kit they might need for 50 or so common emergencies, including pregnancy and snake bites. From this initial programme came what is now the EMRI - Emergency Management and Research Institute.

Today, this is a free service delivered through hi-tech emergency call response centres with over 785 ambulances across the Andhra Pradesh, Gujarat and Uttarakhand states in India. With the projected expansion of fleet and services set to spread across more states, EMRI will have more than 10,000 ambulances by 2010. That’s a national ambulance service covering a population of more than a billion and all created within just a few years. Satyam proved what can be done with technology and now the government is coming on board to fund the expansion.

I just had a conversation this morning with Som Sarma, the European vice president of Satyam about how this project started, why it is important for Satyam and India, and how they might use this expertise in future. You can hear an audio podcast of that conversation by going to the iTunes podcast directory and searching for ‘Talking Outsourcing’ or by clicking here to play it back from the web.

A new review commissioned by the government and written by business economist DeAnne Julius positions the UK as a world leader in the outsourcing of public services. The new report, published today, goes on to suggest that the UK public sector should go even further down the outsourcing road, with many more services ripe for “significant expansion”.

Listening to the news on the radio this morning, they seemed unsure about whether Britain should crow about being an international leader in the outsourcing of public services, but it can’t be denied that governments across the world are beating a path to the UK to examine best practice in various areas.

Julius, a former member of the monetary policy committee of the Bank of England and chair of think tank Chatham House, writes in the report that the UK outsourcing industry has grown by 130 per cent since 1997 (notably since the Labour party came to power), and now employs around 1.2 million people. That’s huge. Let’s not underestimate the size of this part of the industry. It’s something like £80bn a year we are talking about here.

The Julius report calls for more openness and transparency in government departments, which would promote the use of outsourcing, as it generally demands open measures. The historic use of outsourcing by government has been to reduce costs – much like the private sector – but Julius indicates that outsourcing can now be a key driver for achieving social and environmental targets that would be difficult or impossible to achieve in-house.

It’s interesting to hear that this is an area in which the UK is a world leader. What do you think of your local bin collection, parking wardens, and prison logistics then?

I had an interesting visit to the Czech Republic last week. I was speaking at a conference focused on the business of information technology in the country and it covered a multitude of areas, focusing a lot on legislative changes for most of the morning session.

What struck me, when the deputy prime minister (DPM) was speaking in the afternoon, was the directness of someone so senior in the political machine. He confessed that the IT industry should not expect too much from the forthcoming Czech presidency of the European Union. In fact he even confessed that he was not sure what anyone could expect from the presidency, but he did vouch to be working hard on ensuring the country would get as much as possible from the EU presidency.

The Lisbon Strategy is due to be reviewed soon and from what the DPM was saying, it looks like the UK and Czech Republic are the most progressive nations in the union, pushing for real measures to drag Europe into the information age – particularly in the area of IT-enabled services. Given the nature of the EU and the requirement for 27 nations to debate these matters it might be some time before we see much action.

The last couple of US presidential elections have included anti-outsourcing and anti-globalisation rhetoric as part of the agreed mix of issues commonly debated. This time the main issues seem to be the war in Iraq and the slowing economy, but Senators Barack Obama and Hillary Clinton are both vying to represent the Democrats – and who hates outsourcing most is clearly seen as one way for them to drum up support from the party faithful.

The problem facing them both is that the US is already open to the world, especially through free trade agreements such as NAFTA. It’s hard for these politicians to play-up to the blue-collar gallery, preaching Springsteen-esque platitudes on how hard they will work to keep jobs in America, when every major American corporation works across borders. We all know that most of Microsoft Office is developed in India, but would the next US President really square up to Bill Gates and tell him American products need to be developed entirely in America?

Obama is the front-runner in the Democrat race and it’s easy to see why – he seems able to please every possible audience at the same time. “We have to stop providing tax breaks for companies that are shipping jobs overseas and give those tax breaks to companies that are investing here in the United States of America”, Obama said the other day in a debate with Clinton in Ohio. During the same debate he also said that Americans cannot “shy away” from globalisation. “We can't draw a moat around us,” he emphasised.

The Democrats are already using globalisation as an issue to beat each other up, to show us who is more patriotic. Expect the heat to increase once they select their candidate and the real Republican v Democrat race begins on the long road to the election in November.

This blog is generally supportive of outsourcing as a strategy, but I like to be objective when organisations do outsource - because it is not always appropriate. Sometimes it’s just plain stupid.

Charnwood Borough Council in Loughborough has come under fire from unions such as Unison recently for its plans to outsource services such as HR and benefits to third-party companies. There have even been noisy protests outside the local town hall.

I have to confess some sympathy for the union this time. The council openly confesses that its objective is to cut costs without cutting services – the old chestnut trotted out by elected officials the world over. The target is just a 10 per cent reduction; not so much a great leap forward, more like a timid step.

First, handing all your services over to the third party just to slash costs is entirely the wrong approach to take anyway, not least because it sends a message to the supplier that cost of service – rather than service quality – is your primary driver. Second, how much time, effort, and risk is involved in the outsourcing process and is it worth taking that risk for a potential 10 per cent reduction, that is only a target anyway?

It seems a shame to listen to council leaders talking of outsourcing as a panacea for their service provision. We all know how bureaucratic and unfocused some local authorities can be, so it is true that outsourcing to specialist providers really can work well for councils, but if this council takes such a simplistic approach to planning the way it delivers services then it deserves to suffer at the ballot box come the next election.

Given that I live in London, and not New York, The Buffalo News is not often part of my daily reading matter, but I was drawn to a story about Senator Hillary Clinton today because of the links to Indian technology firm Tata Consultancy Services (TCS).

Clinton has been criticised by anti-globalisation and anti-offshoring supporters because four years ago she assisted TCS in coming to the town of Buffalo and opening a local office. The spin at the time was about economic regeneration and how Tata would be employing up to 100 local people from the Buffalo area within two years.

Unfortunately The Buffalo News has reported that TCS currently has only 10 people, with plans to hire around five more. Clearly that’s not exactly the economic regeneration promised by the marketing people, but there is another side to the story. When the newspaper asked TCS to explain why it had not created the promised local jobs the company confessed that the biggest problem has been luring people with the right level of skills to Buffalo.

For those without an intimate knowledge of US geography, Buffalo sits on the wind-swept coast of Lake Erie in northern New York State. It’s about 400 miles from the lights of New York City and in terms of population it’s about the same size as Belfast. So we are not talking about a one-horse town, but even Leeds is twice as large.

So I can understand what TCS is saying and a quick look at the web site does indicate that it has over 50 offices in the US, employing over 10,000 people in well-paid consulting jobs. So it would seem that a lot of the negative briefing is politically motivated, rather than just objective criticism of Clinton. In fact, it seems the TCS story has come to light because another hopeful for the Democrat’s presidential campaign nomination, Barack Obama, was briefed that Clinton’s ‘support for offshoring’ could be an issue worth focusing on in the forthcoming campaign.

It takes me back to the presidential campaign of 2004. Offshoring is bad. No, it’s good for the economy. No, it takes US jobs away to India and China… here we go again.

A new study just out from Kable, the public sector research and events company, shows that UK government spend on IT outsourcing is expected to increase from £74bn in 2007–08 to £100bn in 2012–13. Most of this (£56bn) will be spent on citizen services in 2012–13 as compared to £41bn in 2007–08, while £44bn will be spent on government services in 2012–13 as compared to £33bn in 2007–08.

The study outlines the need for reform and efficiency as the main driver of government outsourcing and a need to reduce ongoing cost. In addition, local government and NHS are expected to continue as the largest spenders on outsourced services, while the education sector is expected to provide the strongest growth to the IT outsourcing spending, primarily due to the Building Schools for the Future programme.

It would be interesting to understand what the figures are for the retained organisation across all government services. I understand that there are some highly sensitive or classified areas of the government IT network that would never be handed off to a supplier, but the growth highlighted by Kable does not seem astonishing to me when put in the context of growth over a five- or six-year period. Anyone would expect the government to be outsourcing more and this seems like a modest increase. What is still contained within the civil service and how the interaction with suppliers might be streamlined might be of more interest.

(Thanks to http://www.globalsourcingnow.com for the tip off).

Heather Hamilton is a human resource executive at Microsoft. In her blog recently she was talking about how Bill Gates was called to testify in front of Congress as a part of the US research into connections between the work visa system and education policy.

It’s striking that the US has made this connection and got so far as to calling in the big guns from industry, because the UK seems woefully far behind. Yes, we have started reorganising the work visa system, but where is the intelligent redesign of the education system that takes into account the network society - the movement of skilled people, and the movement of jobs through outsourcing? In fact, our own visa changes are starting to get bogged down by protesters complaining that “too many Indians” are coming to work in the UK IT industry. The changes may not even settle in before they are changed again.

This is a fairly large quote, but I think it is worth echoing some of what Bill Gates said to the US government:

“Our current expectations for what our students should learn in school were set 50 years ago to meet the needs of an economy based on manufacturing and agriculture. We now have an economy based on knowledge and technology. Despite the best efforts of many committed educators and administrators, our high schools have simply failed to adapt to this change. As any parent knows, however, our children have not - they are fully immersed in digital culture.

As a result, while most students enter high school wanting to succeed, too many end up bored, unchallenged and disengaged from the high school curriculum - "digital natives" caught up in an industrial-age learning model. Many high school students today either drop out or simply try to get by. For those who graduate, many lack the skills they need to attend college or to find a job that can support a family. Until we transform the American high school for the 21st century, we will continue limiting the lives of millions of Americans each year.”

Bill makes an important point, a really important point. Kids graduating from university today have not known a life without technology. If you are just about finishing university today then you probably don’t remember a time before mobile phones and the internet. So there is an entire generation coming through that is familiar with technology and its application in their everyday life, yet our technology training has not moved so fast.

If you enter university and start to study for a technology-themed course believing you have an interest in technology because of your experiences of personal computing use (blogging, social networking, using the web and so on) and then find yourself engaged in three years of analysing Boolean logic, Babbage and Smalltalk, then its no wonder kids become disengaged.

The National Outsourcing Association has been working with a number of universities in the UK to try introducing the concept of outsourcing and partnership into a number of courses. The idea being that this knowledge is going to be useful in the real world, so anyone who can combine a strong appreciation of how outsourcing works along with a willingness to learn about the practical aspects has to be a better potential employee than one who can demonstrate only theoretical knowledge.

The British Computer Society (BCS) has in effect gone even further and has almost reinvented itself over the past few years to become an organisation completely focused on maximising the career of its members. The BCS these days is entirely geared up around services such as CareerBuilder and networking events – they have caught on to the fact that technical jobs have social requirements, like any other job.

Where Bill Gates has really hit the nail on the head is in his views that we should be connecting the idea of the digital society – or network society as sociologist Manuel Castells calls it – to policy formation. If a technology company needs access to experts most easily located in India then does it make more sense to offshore the work itself to India or to bring the Indian experts into the UK, so long as they then pay local taxes? And over the long term how do we ensure that our education system can ensure that the young people we are educating are getting the right blend of skills needed to find employment in a future ‘networked’ environment? If the universities are teaching highly commoditised skills that can easily be sourced from overseas then companies will source from overseas.

The UK government needs to connect these issues together now. Work visas and migration of skilled labour into the UK cannot be separated from work being offshored and this cannot be separated from higher education. The network society demands that we formulate government policy with a global vision, not just with an eye on populist measures that win elections.