New Opportunities Open for Outsourcing in the Government Sector

IBA Group
Mark Kobayashi-Hillary

I found myself featured recently in the pages of the Financial Times talking about offshoring to various locations, particularly when the British government is the client.

Naturally enough, as the government is undergoing a large-scale austerity programme and working hard on cost reduction across all services, the offshore outsourcing of services such as IT is being discussed far more than it was a year ago.

There are several dynamics at play in the British example. The emphasis on cost reduction rather than service innovation, a need to focus on security and risk of delivery failure, and a potential emphasis on the EU being the location of choice for many services.

The government CIO, John Suffolk, recently tendered his resignation and a replacement has yet to be announced. Suffolk was focused on changing government IT services to be more like the Apple App store, more like a cloud of public sector services. Many in government felt that these conceptual ideas for IT services would never work on such a grand scale in the public sector, and his resignation is a surprise to those who thought he was now in a strong position to change IT across the entire government.

It’s clear that the emphasis of the politicians is certainly on cost reduction for the foreseeable future and many analysts have commented that there is distaste for many of the usual suppliers, seen as bloated and too expensive. With a new vista of opportunity and a readiness to explore new partners, but a requirement to almost certainly only engage with services delivered from within the EU, this surely opens a new range of possibilities for the technology firms from Eastern Europe. If they can build the right relationships in the UK then they will find a rich seam of opportunity awaits them.