Write 100 lines: "I must not outsource my homework to India"

When I was a kid, I once did my school homework on my Commodore 64. I typed it all up using a simple word processing system (that I had coded myself) and then printed to a dot matrix printer.

I handed in my work thinking I was leap years ahead of my class in using the best technology I could lay my hands on. My teacher failed the project and asked me to re-write everything by hand.

I remembered this episode when I read recent news about Australian kids getting into trouble for outsourcing their homework to India. For a while now, most universities have had systems in place to prevent plagiarism in essays. So, if I was writing an essay on the history of Australia and I just lifted most of the text straight from Wikipedia, the automated systems would detect a pattern match and flag up my essay to the markers.

However, with software development it’s much harder to detect plagiarism. If you are a first-year computer science student and asked to write a basic alpha-numeric sort algorithm, you can sweat all night over the keyboard or just post the job on a site such as Rent-A-Coder. A software developer somewhere out there will be willing to write the code and email it to you almost instantly.

Clearly there is almost nothing that can be done to detect this type of cheating. The only option for the university is to include some practical supervised tests in the course, to ensure the students really can perform on their own.

But this brought me to think of another personal example. When a friend of mine was working on his MBA a few years back, he outsourced some of his accounting module to his own accountant (my friend was managing director of a software firm). He was open with his professor about what he had done personally and what he had delegated to his accountant. The professor insisted that he complete the outsourced parts of the module himself, or he would have to fail the project.

My friend protested. Pointing out that in the real world he would never do any complex accountancy, which is why he employs an accountant. It would seem that his MBA was not preparing him for the real world in any way – which given his own business success was not really a problem, more of an observation.

I don’t think we can prevent kids hiring others to do their homework. It’s happened since the first homework project was assigned. We just need to be aware that with project-based sites springing up all over the internet, it’s getting easier to get small tasks done. Courses need to be rethought so the right skills are taught and the testing methods are valid.

Is India slowing down?

S. Ramadorai, the chief executive of Tata Consultancy Services (TCS), the biggest offshore outsourcing company in India, has told reporters at an OECD conference that the offshore outsourcing market is slowing down.

Ramadorai was talking to journalists at the OECD ministerial meeting on the future of the internet economy. He predicted that the industry in India would grow by 20-22 per cent this coming year – compared to about 25 per cent last year.

That’s still not bad, but what I find interesting is that everyone in the industry seems to be talking up the opportunities for offshoring in a recession. Most of the Indian offshoring companies are talking about the opportunities presented by a more cost-conscious business environment. So how come TCS is taking the opposite view?

Outsourcing: It's just another day

A survey by the Management Consultancies Association of members of the British Bankers Association has found that 41 per cent plan to outsource more of their business.

Ninety per cent of respondents have already engaged in some outsourcing – quite impressive and demonstrative of how far entrenched the use of outsourcing is within financial services. More importantly, 89 per cent of respondents believe they have used outsourcing as a business tool without leading to a loss of jobs.

It’s hardly likely that in this kind of survey the respondents would say something negative, but nine out of 10 bankers saying that they are using outsourcing - and it does not affect local jobs - is quite a statement of how companies are doing business today. Outsourcing has become just a regular day at work.

It's not only about India

I was sitting watching the Austria v Poland football match last night trying to remember how on earth England failed to get into the Euro 2008 competition. Still, when I glanced at Fortune magazine today I saw some information that made me feel a certain pride in being English.

Good old British Telecom – now more correctly known at BT Group and driven globally by its BT Global Services division – is going great guns. In the last three months, BT signed more than $1bn of multi-year service management contracts with clients such as AT&T and Verizon. Just this week BT signed a $650m contract with Procter & Gamble to handle data, voice, and networks.

When we look at the use of outsourcing and offshoring by major companies, the detractors often assume it means nothing more than jobs are migrating to lower cost locations. The success of BT in transforming itself into one of the largest global operators in networks and IT services shows that the best technology suppliers are not necessarily in India.

We want your views on outsourcing

My friend Dr Richard Sykes chairs the outsourcing and offshore group at UK hi-tech trade association Intellect. Last year, Richard and I wrote a book about Global Services and outsourcing for the BCS.

Richard’s group is running a major survey of industry to try predicting some future trends in outsourcing and offshoring and so if you are checking out this blog then it might be useful for you to go and try filling in the survey.

If you participate then there are some benefits and prizes as well as the warm feeling that your views will help shape some research into where the industry is headed. You can take part in the Intellect survey by clicking here.

Obama bows to reality of globalisation

After all the excitement in the US regarding who is going to stand in the Presidential election this year as the Democratic nominee, it’s only fair to wonder what the candidates might think about offshore outsourcing. After all, Hillary Clinton has long been on record as a strong supporter of investment in the US by Asian companies, but now she is out of the race.

The presumptive candidate for the Democrats, Barack Obama, talked on Monday to an audience in Raleigh, North Carolina, about the subject – so we have an idea what his side of the house feels about the subject.

The basic message from Obama is that you can’t fight globalisation. You can’t stop US companies working with people overseas.

“Revolutions in communication and technology have sent jobs wherever there's an internet connection; that have forced children in Raleigh and Boston to compete for those jobs with children in Bangalore and Beijing,” he said.

So the internet takes most of the blame, but he has acknowledged that this access to global resource does increase competition – more than ever before, US workers need to compete with others.

Obama has a suggested short and long-term policy plan that involves training, education and equipping workers for the more competitive and innovative workplace of the future. He also savagely attacked the Republican candidate John McCain, suggesting that he had nothing to offer voters beyond an endorsement of the policies of the present Bush administration.

Clearly a political strategy that attaches McCain to the washed-up legacy of George Bush is something we are going to hear more of from Obama over the coming months, but to be fair to McCain I have yet to hear him talking on this subject. Perhaps he might make some statements this week now that Obama has chosen to fight him on the outsourcing and globalisation agenda.

I hope so, because this was a major campaign issue back in 2004. To hear Obama talking about changes to education, training plans, and support programmes demonstrates a greater maturity than the debate four years ago – where offshoring was something that the legislators believed could just be banned.

Obama is right to take a more pragmatic view. We aren’t talking about offshoring anymore. The way companies do business has entirely changed because of global networks, and US companies are leading that change. Let’s hope the Republican candidate takes a similar view so whoever becomes the next President of the USA will start focusing on the long-term issue of equipping US workers for the future.

The recession is a good business opportunity

Here is the news that everyone has been waiting for; economic slowdown is officially a good thing. Well, I’d better qualify that by saying that it’s good if you are involved in offering global services to clients – particularly through offshore outsourcing.

A new study out today has highlighted this as a key finding. The study is titled ‘Global BPO Market Forecast 2008-2012’ and was undertaken by NelsonHall. Other observations from the research include a prediction that the global market for business process outsourcing (BPO) will be worth $450bn by 2012. That’s a serious amount of cash.

In theory our economy is still growing, yet with studies like this predicting continued strong growth in the outsourcing market it looks like a good place to be if things do start getting rough in the year ahead. Recession, what recession?

Don't write off the outsourcer

Interesting to note that although outsourcing is becoming more popular, the day of the megadeal with a single outsourcing partner appears to be over. Analyst firm Gartner defines a megadeal as a contract with a total value of more than $1bn – last year only 10 deals of this magnitude took place, down on 12 the year before.

Partly this is because more and more companies are using outsourcing as a business practice, so at all levels of the company it’s more usual to work in this way. So it’s more likely for smaller deals to be struck that don’t end up reported as megadeals.

Also, there is an increasing trend to multisource and break up requirements across a basket of suppliers – offering access to best-in-breed services, rather than just going to a monolithic one-stop-shop.

The combination of multisourcing and increased automation of services is highly likely to result in reduced contract sizes – but it is likely there will be more contracts as these solutions become more and more popular. Don’t write off the outsourcer just yet because megadeals are on the decline…

What the experts said about outsourcing

The European Outsourcing Association annual summit all went well. In the end people were being turned away so in terms of getting delegates out for the event, it was a great success. In fact it has taken me nearly a week to blog the research results, partly because the after conference party was so good…

I ran an interactive session at the event, where I used some electronic kit to get immediate feedback from the audience. I’ll try summarising some of the feedback from the conference delegates.

To start with, delegates feel the globalisation of the outsourcing industry will soon see one of the major Indian players acquiring a large European or US provider. It’s a rumour that keeps returning to the fore, but with everyone believing it, will it really happen?

Some 75 per cent of respondents believe that such an acquisition is imminent. Consolidation was earmarked as a rapidly increasing industry trend by 68 per cent of delegates, in light of the recent acquisition of EDS by HP. Some other key findings that came up during the session include:

•    Continental Europe is no longer as protectionist about outsourcing and offshoring as it once was – it is now an accepted business practice across the continent. Only eight per cent of respondents believe that European countries such as France and Germany are far behind in accepting outsourcing as a useful business strategy.

•    New nearshore locations, particularly Romania and Bulgaria thanks to their recent entrance into the European Union, have brought a new attractiveness to the European offshoring market. Some 59 per cent of respondents believed Romania and Bulgaria are now more attractive to work with, while only nine per cent believed the attraction had been reduced.

•    The delegates realised that Eastern European nations do not have the scale of staff to resource huge outsourcing deals, with the majority (58 per cent) believing that different geographies are suited to different types of outsourcing projects. Only 17 per cent believed that Indian providers are leaps and bounds ahead of all other geographies.

I also asked some questions on the global credit crunch and the potential for recession. It’s not specifically related to outsourcing, but it does affect outsourcing decisions so I wanted to gauge the mood of those present. The first surprise (considering the doom and gloom presented each day in the media) was that 64 per cent of delegates had not seen any impact on their business, so far.

I tried to check on perceptions, rather than actuals, by asking if delegates were worried. Even then, 43 per cent were not worried and 17 per cent were not sure – a lot more than the worried 40 per cent. Then I asked if a recession might even be a good thing for the global outsourcing market, encouraging people to explore outsourcing where they might not have before. Some 64 per cent agreed that it would be a good development with 19 per cent not sure – a huge majority that would actively like to see a recession!

So it’s an interesting mix of results. Certainly the European market is maturing quickly, both as consumers of services and as providers, but the really interesting result for me was that no one in this industry appears to be worried about the credit crunch. Pass the Bollinger…

Outsourcing's coming home

Today is the annual conference of the European Outsourcing Association (EOA). It’s been held in a number of European cities before including Frankfurt and Amsterdam in recent years, but this time it has come home to London.

I say come home, but there is not really a geographic home for the EOA. The organisation is modelled on the UK National Outsourcing Association, celebrating its 21st birthday next month. The NOA structures have been applied to other countries allowing a federal body to be created across Europe.

I’m presenting a completely interactive research session during the conference, where every delegate will have an electronic keypad allowing them to respond en masse to my questions. It should be fun, and as soon as I have some of that live feedback from every delegate in the room I will make sure I blog the results – watch this space.