UK firms still outsourcing to India

The war in Afghanistan has not dampened UK companies' enthusiasm for having systems developed in India, according to the head of the Computer Software and Services Association's (CSSA) offshore group.

Simon Denison-Smith, chairman of the CSSA offshore group and managing director of offshore development company Rave Technologies, said that since the US terrorist attacks half a dozen European clients had visited Rave's operations in India.

"I've seen no reluctance from any of our clients to use India following the events of 11 September," said Denison-Smith. "India is a long way from the fighting and it seems that most people are aware of that."

"The only thing I've seen is that the economic downturn has put pressure on companies to cut costs and that means they are looking at offshore because of the cost savings," he added.

"Companies in the UK don't seem to be reacting in the same way as ones in the US."

Analyst Giga Information Group has warned that risk-averse companies might pull out of offshore outsourcing. It had predicted that some offshore developments could suffer because staff will be reluctant to fly, or because their company has implemented 'no-fly' policies.

But the analyst said: "To date, Giga's clients' desire to save money has superseded their concerns about increased risk."

British Airways, a major user of Indian outsourcing, said it has no plans to change. "We are quite happy with the service being outsourced to India," a spokeswoman said.