Use of offshore IT and business services by the UK public sector: Industry Report

Use of offshore IT and business services by the UK public sector

Product Type: Market Research Report
Published by: Ovum Plc
Published: November 2007
Product Code: R464-689

Description

The shift to global delivery models is a reality across the IT and services markets. However, the UK public sector is struggling to determine how it can best take advantage of offshore resources while addressing concerns about the economic, political and security impact.

The current situation reveals a moment of transition. The traditional services industry is increasingly comfortable with global delivery models but there is still considerable difference in approach between suppliers. Similarly for the offshore players, the future may well be a more balanced offering of onshore/offshore services, but for the moment they cannot offer the same options as their onshore competitors. For the customers, the attractions of offshore are clear but not yet the degree to which they can, or should, be used. And in the public sector, this is further confused by the need to consider broader political and economic issues.

Overall this means that the direction of travel is clear, but the route and time of arrival are still hazy. Market leaders are emerging but the battle is far from over; getting the timing right on the use of offshore in the public sector is likely to be a critical factor determining broader market success in the coming years.

Table of Contents

Executive summary: Offshore: not if, but when, how and with whom; The policy context: need for more clarity; The erosion of barriers; Impact on suppliers
Recommendations for suppliers: Traditional onshore suppliers; Offshore suppliers
The current situation: What’s treated as ‘offshore’ services?; No common policy or approach; Factors influencing the ‘offshore’ decision; Sector-specific influencers; Higher barriers for traditional offshore players; Still a real difference between onshore and offshore players
Types of offshore arrangements in use: Current contracts and work going offshore; Central government; Health; Local government
Offshore supplier strategies: Tata Consultancy Services (TCS); Infosys Technologies; Wipro Technologies; Mastek
Onshore supplier strategies: The evolution of offshore delivery in the public sector; Influencing the acceptance of offshore delivery; Negative influences will continue to diminish; Indirect offshoring will remain most popular option; Project-specific barriers will be hardest to overcome
Table of figures: Table 1 Factors affecting the acceptance of a non-UK headquartered company as an onshore player; Figure 1 Factors influencing UK Government decision to use offshore services; Figure 2 Top IT services providers to UK Government: employee location; Figure 3 IT services providers to UK Government: number of UK employees; Figure 4 Three types of offshore arrangement used by UK Government; Table 2 Known central government IT projects using offshore resources; Table 3 Known health sector contracts using indirect offshore resources; Table 4 Known local government S/ITS projects using offshore resources; Figure 5 Current position of offshore vendors: visibility and perceived commitment to the UK public sector; Figure 6 Current offshore positioning of traditional onshore IT services suppliers to UK Government; Table 5 Xansa and public sector delivery locations; Table 6 Top public sector IT services suppliers and ‘offshore approach’; Figure 7 ‘Influencers’ on progress of offshore service acceptance and use

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