CloudWize’s CEO Edward Humphrey was recently interviewed on the complex topic of offshoring – did it deliver the promises it set out to, what does the future hold for this lower cost outsourced resource, and what are the implications for British talent? Drawing on decades of enterprise cloud experience, he delves into these questions, and more, before considering the opportunity that AI now presents...
You could call the ‘movement’ of the last 20 years, ‘the great offshoring’ - when thousands of businesses invested in lower cost overseas resource, in the pursuit of affordable scalability.
But over time, we’ve seen the challenges that this model has posed – not just for UK organisations, but the global market.
The build up of legacy debt
This reliance on lower cost – and in many cases lower quality – engineering, has resulted in platform instabilities, security vulnerabilities, misconfigurations, a lack of standardisation, disregard for Microsoft and other industry best practices, and a heap of legacy debt.
It’s common for this legacy debt to go unnoticed for months, if not years, until organisations want to modernise their estate. Whether refactoring applications, migrating to the cloud, or leveraging AI, it’s usually during these critical transformational stages, when the consequences of continued negligence start to emerge.
Delivery models that don’t...deliver
The velocity of delivery has sadly often not lived up to expectations either. Typically, statements of work for offshore delivery teams see perhaps 15 different people deployed on a project, each providing small subsets of skills. The number of handoffs is huge – and resource utilisation is rarely maximised – which slows the possible pace with which a project is able to unfold.
So, did offshoring deliver what clients actually wanted? Faster, more affordable change? I’d say the reality is that the initial investment might have felt ‘cheaper’, but the net cost of this approach is often ten-fold what it should have been.
Compare the above scenario to two or three deeply experienced subject-matter experts, each capable of doing more, using fine-tuned processes, and working in unity, at speed. The results are poles apart. Power such specialists with AI, and the velocity accelerates further still.
And here lies the crux of the matter. With the revolution of AI, we don’t need to rely on low-cost offshore engineering to modernise our estates. AI is an enabler for incredible code. It allows us to build far smarter apps. It can deliver end to end automated processes. It can calculate the unseen.
That’s why I’d go so far as to say that I truly believe AI will finally achieve the value that offshoring promised but never delivered.
But what does AI mean for UK talent?
The reports of ‘AI stealing jobs’ cannot be ignored, with multiple studies predicting the impact that organisations’ continued investment in AI is likely to have on the labour market. A recent McKinsey report, for example, highlighted the roles set to feel the effects, which will make for bleak reading for many people.
It would be naive to pretend change isn’t afoot, although I do genuinely believe that with L&D commitment from employers, many colleagues’ time could be redeployed. Encouragingly, the McKinsey report also talks of the reskilling efforts that are already being seen in UK businesses, with data suggesting this trend is on an upward trajectory – something I applaud.
We’re seeing many CloudWize clients designing and deploying AI to accelerate the speed of employee onboarding, promote greater interdepartmental knowledge sharing, augment learning, and free staff from time-intensive admin that shackles their productivity. With the business – and colleagues – benefitting phenomenally as a result, these projects certainly do not scream AI replacing people. In fact, it’s transforming their productivity and fulfilment. It’s giving them agency.
To make knee-jerk or blanket decisions to reduce headcount in favour of AI investments will therefore catch many organisations out over the coming months, if they’re not careful.
An opportunity for the next generation of employees
There’s another labour market trend I also expect us to read more about in the coming months, if only we capitalise on the opportunity.
The UK has the chance to be an AI powerhouse – a hub of incredible talent that changes the playing field for businesses large and small. And the next generation of employment-ready young people is full of AI natives. They won’t see things like Copilots, chatbots and agentic AI as threats. They’ll seek every possible opportunity to utilise AI to supercharge their working day. And if we get it right – in the worlds of academia, research, and industry – we could be home to some of the best talent in the world.
So, let’s train today’s juniors to become tomorrow’s leaders. Because offshoring might have been a blocker for talent development, but AI certainly needn’t be.
At CloudWize, we don’t deliver bums on seats. We believe in bringing elite subject-matter experts to every client project, from the outset and for the entire duration of the delivery. We purposefully keep things lean, and prefer to augment your teams, partnering with you, to support you to achieve the outcomes you strategised in the first instance. Why not learn more about us, explore our AI readiness assessment to see where you truly stand, or contact us to discover how our squads can help.
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