A global information technology company which specialises in offshoring, or transferring jobs to other countries to cut costs, is on the short leet for a 40m plus IT contract in the Highlands. Wipro, whose headquarters is in Bangalore in India, is seeking to take over providing IT services to the Highland Council from Fujitsu UK. The Herald has learnt it is now between these two. In 2012 Wipro won the Offshoring Project of the Year award at the 2012 National Outsourcing Association Awards in the UK. This was for work done for BT. In 2011 it published a report on the competitive benefits Latin American countries can provide European organisations looking at offshoring locations. It said Latin America was developing into an attractive offshoring alternative to Asia for Europe-based businesses as it offered tremendous cost savings in wages, real estate, infrastructure, travel and tax incentives.
It is not clear what Wipro plans for the Highland Council, if it successful in winning the ICT Core Services contract due to begin in September, or the associated jobs. Fujitsu currently employs 130 people in the Highlands on the council contract and other services, 750 across Scotland. The Herald contacted Wipro’s office in Aberdeen, its UK HQ in Reading and submitted questions to its press office in Bangalore, in an attempt to find out whether it would maintain jobs in the Highlands or send them offshore. We also asked how many people the company currently employed in the UK and Scotland, but it did not receive any response. One industry source said yesterday Wipro is a very big company, with offices in Aberdeen and East Kilbride, England and in many other countries. Outsourcing some work to the likes of India clearly makes economic sense given the much lower labour costs there, but whether it makes political sense may be another matter.
Last summer the Leader of The Highland Council Margaret Davidson made her views clear on offshoring. She wrote to Scottish Provincial Press publishers of the Inverness Courier, Ross-shire Journal, Highland News and other titles to express concerns at the announcement of their intention to outsource work to India with the loss of 11 jobs to the Highland area. But said she would not comment on whether Wipro was on the ICT contract short leet there are various firms in for it. That’s not impossible, but sorry I couldn’t say what the short list is. Frankly I would have to go and have a look myself. But on keeping jobs in the area she said certainly that is something we would always look for. That is a big deal for whatever contract we are looking at. That is something we would look to ensure. It would weigh heavily in our approach.
According to the Highland Council the scope of the ICT Core Services contract may be broadly defined as providing managed technology infrastructure, application systems and desktop services required for the delivery of the authority’s business including educational ICT and online Public Access Services. Offshoring is a company’s relocation of a business process from one country to another. This typically involves an operational process, such as manufacturing, or a supporting process, such as accounting. Even state governments employ offshoring. More recently, offshoring has been associated primarily with the sourcing of technical and administrative services that support both domestic and global operations conducted outside a given home country by means of internal or external delivery models. The subject of offshoring, also known as outsourcing, has produced considerable controversy in the United States. Offshoring for U.S. companies can result in large tax breaks and low-cost labor.