BT Exact: going further offshore
Next phase of outsourcing strategy
BT Exact, the technical services division of the UK's incumbent telco, has outsourced more than 200 applications to India during the last ten years. The company is now taking its offshore strategy to the next phase, collaborating more closely with its Indian suppliers and setting up policies to force its managers to shift more processes offshore.
Last week, Alex Taylor, head of resource management for BT Exact, shared his vision for the next steps in offshore outsourcing at a conference in London.
He claims that the company still faces significant challenges in the adoption of offshore services. Management resistance has led to the company not achieving the full cost benefits of sending projects to India. In response, BT Exact is setting objectives for internal managers that encourage them to increase their usage of offshore providers.
But it is not only internal managers that are failing to achieve the full cost savings of an offshore model. For instance, of the processes that have been outsourced to offshore partners, 60% of the work is still carried out onshore, a balance that Mr Taylor says does not go far enough.
Of course, fear of being usurped by offshore suppliers is one of the reasons that internal BT managers have been reluctant to adopt offshore strategies, said Mr Taylor. But lack of education about offshore partners' capabilities, and a certain amount of cultural incompatibility has also hampered progress. These issues are tied in with the wider political issues surrounding the growth of outsourcing offshore at the claimed expense of UK jobs.
Mr Taylor said that India does lack a critical mass of project management skills to enable complete lifecycle services to be provided offshore. However, this is not a problem particular to India: he also admits that BT has a similar shortage internally. Interestingly, this could lead to an increased number of UK executives being sent to India to initiate projects, and improve communication between onshore and offshore teams.
Given that most offshore industry observers are calling for Indian firms to set up near-shore and onshore operations to be closer to their clients, this is an interesting development from one of Europe's most experienced offshore users.