At a time when some of Great Britain's former colonies have prospered attracting offshore investment, British Telecom (BT) is making a pitch for offshore operations with a difference. Aiming to attract financial services firms, the London-based company has invested about British Sterling 50 million and partnered with government and private sector entities to launch the International Financial Service District (IFSD) in Glasgow, Scotland, a zone pre-equipped to support the technology needs of financial institutions' remote operations.
The IFSD is what BT calls a key strategic addition to its BTeLocations program, which has created about 50 technology park sites around Britain with optical fiber network access and technology services suitable for contact centers and other off-site operations.
BT chose to invest in Glasgow because the "financial service industry tends to cluster itself around people, from a networking, recruitment and resourcing point of view," and Scotland's largest city affords important advantages, according to Ian Baines, MBE, who is vice consul of Invest UK, at the British Consulate in New York. International financial services firms will want to keep many of their principal front-office operations in London, "but can take some of their back-office systems and operations out of the high-cost real estate location to somewhere where you have a rich, high-quality labor pool and a unique telecom infrastructure," Baines argues.
Workforce stability would be an important factor in choosing Glasgow over other offshore locations, according to John McCarthy, an analyst at Forrester Research (Cambridge, MA). "Glasgow has a good reputation as technical town and has massive academic infrastructure," he says. But as a lower-risk "near-shore" option for the outsourcing of many business processes "the cost structure would still have to be low enough to narrow the gap to persuade companies not to choose, say, India or Eastern Europe."
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio