An IT meltdown due to software issues managed remotely in India has done little to please even hardened supporters of offshoring. The reputation of offshoring has been tarnished but will it be enough to outweigh the perceived cost benefits?
Perhaps the question should be, 'can we still trust India?' The Indian IT sector is heavily reliant on offshore deals, primarily from the US and Europe, but it is built on a reputation of high quality at low cost. For the most part this has been fair but there have already been moves in the US to keep IT projects within its borders and reduce reliance on overseas skills. As the economy bites, this makes some sense but only if you can actually do the jobs for less and at the same or higher level of quality.
There is no doubting that India has a high quality workforce that can build and manage software projects at a fraction of the cost of western businesses. That’s the reality but it is not a comfortable one, especially given the current economic conditions and the government’s open desire to drive more business opportunities within these shores.
But outsourcing, as we have seen has its risks. As well as culture, data security, process discipline and a risk of failure have to be upper most in the minds of any business using offshore development and management. Does offshoring compromise company practices? Does it reduce control? Does it increase security risks and lead to a loss of business knowledge making it more difficult to reverse the move in future?
The question is whether UK software developers and services firms can offer the level of expertise that India can offer and at what price?
The reality of course is that the UK has plenty of expertise and skill but we find it difficult to compete on cost. But what if programming time for example, could be reduced by four times? And what if this would lead to reduced development time and therefore massively reduced costs on IT projects?
Not possible? It is possible. Such is the advancement of technology, particularly in terms of programming, that UK developers can now deliver equivalent IT projects at more than half the cost. The perception is different of course but perhaps that is driven by old images of India and is not entirely camped in the reality of what UK developers are achieving on our own doorstep.
UK developers and IT technicians are being given a raw deal by an image that is now outdated but maybe NatWest’s problems will have opened the door for home grown talent, something that would not only help NatWest in the long run but our struggling economy too.