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"Crimsonwing provides IT solutions
to clients in the UK, Holland and Malta.
Whether it involves training or consultancy, design or development, implementation or hosting (SaaS/ASP):
Crimsonwing provides flexible services and support across the entire range of activity."
Source : Crimsonwing
Malta not a world away for Safeway's IT needs
Information technology (IT) is also known as :
Information and communication technologies,
Information Processing System,
IT Application Management,
IT System Management,
Information Technology Management,
Management Information Systems,
Information Technology Resources,
Information Technology Systems,
UK companies are rushing to Indian IT providers to cut their costs
and improve service levels. But Safeway found what it needed
closer to home - Malta.
India's position as the outsourcing destination, with over 90 per cent
of the market according to estimates from research group Gartner,
will remain unchallenged for some time.
But many companies are finding the skills they need at competitive
prices in other countries. China, South-East Asia, South Africa and
Eastern Europe are all emerging as contenders.
But for Safeway, the Mediterranean island of Malta, better known as
a holiday destination than a hub of IT expertise proved a better
As UK's fourth-largest supermarket, Safeway's IT operations are
enormous. The company spends over '£100m a year on technology,
to manage everything from payroll to deliveries for its 500 stores,
97,000 staff and over 35,000 product lines.
Safeway first looked at outsourcing seven years ago. They used an
Indian company to provide flexible extra manpower to help protect
its systems from the Year 2000 bug.
But five years ago, Safeway transferred its offshoring operations to
newly formed company, Crimsonwing, based in Malta.
The first projects Safeway sent involved mainframe coding. But
since then Crimsonwing has undertaken some 220 projects for
Safeway, adding up to some 40 and 70 man-years of work annually.
Projects have ranged from a sales data warehouse to complete
design and build of an intranet portal, and the design of an integrated
transport solution in conjunction with IBM.
Working offshore isnt just a way to save money, says Safeway's
CIO Ric Francis. "I don't look upon it as a cost saving exercise.
Salaries are obviously lower in Malta, but if you take everything
into account, there's not much of a saving over employing people
in-house in the UK."
However, Crimsonwing provides Safeway with IT services as
required for each project, without the need to hire and lay off
permanent staff as the volume of work changed.
"If I was to hire the same kind of flexible resources from a UKbased
consultancy, it would cost three times as much," says Francis.
These are all arguments a company might equally use for working in
India, and the two countries have many things in common.
Malta has many of the benefits of India, in terms of computer skills,
language skills, and cultural affinity with the UK.
As a part of the British empire from 1814 to 1964, English is so well
and widely spoken on Malta that large numbers of foreigners come
to the island to learn English in one of the many language schools.
The Maltese Government has invested heavily in IT and
communications infrastructure in the past ten years, leaving the
island with a modern IT infrastructure, and is now trying to position
the island as a player in the market for offshore IT services.
Malta has one key advantage over India. It's just one timezone away
and three hours from Heathrow by plane, whereas India is five and
half hours behind and at least nine hours flying time away.
Working in India has to be undertaken at arm's length. There is a
limit to the amount of interaction buyers can have with the people
working on their projects.
"If you're working at that distance you have to package up what
you're doing in a very particular way," says Safeway's Francis.
"Working in Malta, if you want to get face-to-face with somebody
about a particular problem, you can do so the same day. That's not
really possible if you're working in India."
The low rate of staff turnover on the island is another important
factor for Francis. "We tend to work with the same people at
Crimsonwing, so they build up knowledge about Safeway as a
business," he says. "Contractors in India or the UK tend to have
much higher attrition, so the knowledge they build up is lost."
Crimsonwing's other customers include Securicor, Toyota, Barclays
Bank, and online computer retailer Ideal Hardware. Other
companies, including Microsoft and specialty printer De La Rue,
also have operations on the island.
With just 400,000 people, Malta is not likely to make much of a dent
in India's market share. But customers like Safeway, for whom
India is too distant and the UK is too expensive, Malta might just
prove the perfect solution.