When will UK Govt offshore their IT?

Today I attended a conference at Intellect- (Nasscomm/CII equivalent trade association of high tech industry in UK).

Almost every speaker (Business School prof, industry analyst, Government stats officer) talked about India and China. they all agreed that India is the top most destination of choice for offshoring and will remain so for foreseeable future. did you say, ‘Big Deal?’.

Here is what i heard for first time from UK stats officer, Biz school prof and analyst-

• Between 02/03 about 10% firms offshored services. The no is more than 20% now is what i then heard from the industry analyst. That makes it obvious that ‘offshoring’ is no more a new thing.

• Offshorers are also more likely (51%) to exporters of services. That keeps the trade balance positive.

• Offshored services show higher marginal productivity than domestically (UK) outsourced services. Its not about just labour cost.
• Both UK&US run trade surplus when it comes to services (IT+Business). Globalisation helps UK&US as much as it does India.

Coffee time talk is my favourite when you go to conferences. You exchange lot more customised content. I know and hear from the industry analyst that UK govt spends 30% of UK’s IT budget but offshores almost none of that. While rest of the UK (Pvt sector) offshores atleast 20 % (by volume) for now and could go up to 50% soon.

The word ‘almost’ is interesting beacuse one can find very weak signals on UK Public Sector considering and ‘doing’ rightshoring/offshoring. One of the UK companies with their office in India is talked about to have offshored part of work on NHS. There are also examples of some work from central govt and NDPBs (Non Departmental Public Bodies) being offshores. Though this is very very insgnificant part of 16 bn budget. With the abovementioned bullets in the backdrop, I wonder, what would be the shape of the pie, come 2010.

Any thoughts?

Negroponte and Pitroda…

http://timesofindia.indiatimes.com/articleshow/1698603.cms

I Read this news today. I am happy to hear the HRD decided not to go for this $100 mn experiment.

To put things in perspective, if one wanted to see these machines in each of 638K villages in India, not more than two students per village will get the computer. And if it is not every village, whats the rationing system of the Govt?
If you compare the cost of this initiative with the National eGovernanace Programme of $500 mn over next 4 years, one is talking about spending the equivalent of 20% of the much discussed, long pending initiatives on an ‘experiement’ that no has tried and tested yet.

And then, who wants to discuss the following in detail-

• $100 mn is only cost of the machines, how about the overall, procurement, distribution and administration?
• Who is going to train the trainers (teachers in villages) to teach them to students? whats the associated cost?
• Are the teachers motivated and qualified enough to ‘learn and teach’ operations of the new machine?
• Is there no variable cost involved? who will bear that? Who takes care of the upgrades and at what cost?

Would it not be better if you leave it to market forces and spend more of your energy as a Govt on ensuring that the e-infrastructure is in place. The best approach will be to first go for one laptop per panchayat and one laptop per school so that the ‘take-up’ is ensured. This itself could be done on the national scale so as to achieve the critical mass and hence the paradigm shift.

If one needs to argue the case further, i would belive more on the pitroda model of ‘intermediaries’/'pay as you go’ (like the std booths and now cybercafes) than the negroponte model of ‘onwership’.
I will for sure want to wait and watch this space.