Government organizations can see the attractions of global IT service delivery; but have yet to embrace such services at all levels. Governments’ attitudes to offshore IT services have fascinated me for some time. In many conversations with government executives, the importance of delivering value for taxpayer dollars ranks high.
Based on the premise that suppliers have created service delivery centers in low-cost locations create value for their clients, public sector organizations should evaluate the benefits. Those who make the decisions on a contract-by-contract basis remain nervous. The key concern is security and confidentiality of data.
There are those departments that have made it clear they have no plans to migrate any services or jobs offshore. However, there are departments and agencies that have chosen to let suppliers decide on the best approach.
In leaving any mention of offshore service delivery out of a request for proposal and providing little or no guidance, departments and agencies push the decision firmly into the hands of the supplier, which must tender the solution it believes offers the best value for money, using offshore if appropriate.
There is no denying there are political sensitivities around the offshore issue. There can be concern about the impact on the US economy and a lack of confidence in the quality of service delivered from low-cost locations.
These barriers remain – but I am seeing signs that sensitivities about these issues are diminishing. On the supply side, it is becoming harder to distinguish between onshore and offshore providers as both sets of players look to operate a global delivery model.
More importantly, on the demand side, departments and agencies will be left with little choice but to consider offshore in order to deliver more for less due to limited budgets.
Increasing budgetary pressures over the next few years will only lead to more departments and agencies working with suppliers to find offshore options that bypass political, cultural and economic obstacles.