Coalition expected to outsource and offshore to cut deficit

Dawinderpal Sahota, Computing, Friday 14 May 2010 at 16:41:00

Association predicts a surge in public sector outsourcing

The new coalition government will outsource an extensive amount of IT
functions to businesses in the UK and abroad, claims the National Outsourcing
Association (NOA).

The NOA carried out research by monitoring more than 1,600 ?unique
communications? ? views on outsourcing from UK blogs, social media, online and
print articles ? to compile its quarterly Outsourcing Reputation Index.

The research showed that a substantial 70 per cent of all commentary on
outsourcing abroad, or offshoring, was centred on the public sector and nearly
half (43 per cent) of all commentary on outsourcing domestically was focused on
the same area.

The NOA said that its research offers a clear indication that the UK is
expecting a significant uptake in public sector outsourcing and offshoring to
cut the public sector deficit.

The body claims that the clear reason that outsourcing and offshoring in the
public sector will increase is due to the perceived cost savings, with more than
half (55 per cent) of the unique communications citing cost savings as the key
driver. Improvement in customer service was the second most-cited benefit (17
per cent).

The major concerns relating to outsourcing were quality of service (39 per
cent) and job losses (29 per cent).

Kerry Hallard, communications director at the NOA, explained that concerns
about quality of service were undue, asserting that outsourcing is all about
having better processes in place and bringing experts into each area.

?Concerns over quality are just that: concerns, rather than findings,? she
said. ?Until people have done it, they don?t realise that outsourcing should
actually improve the quality of service.?

She added that outsourcing decisions need to be made on a case-by-case basis
and that an increase in domestic outsourcing will not mean fewer jobs for IT
staff in the UK.

?Cost savings may be a benefit, but a company shouldn?t be outsourcing if
it?s not doing it for the right reasons. Outsourcing is all about producing
improved deliverables from IT resources.?

She added: ?A rise in outsourcing won?t affect the overall job market in the
UK, it will just mean that a lot of the jobs will be moved from in-house to
suppliers.?

Outsourcing advice for the coalition government

The NOA has compiled a guide to successful outsourcing, with Martin Hart,
NOA?s chairman, explaining: ?Done correctly, outsourcing delivers great
efficiencies ? precisely what David Cameron has been advocating these past few
weeks in the run-up to the election. We urge them to follow outsourcing best
practice?.

The NOA?s steps to successful outsourcing include:

Change the approach. Thoroughly assess the situation and
end objectives. Outsourcing must be seen as central to success, not a barrier.

Safely manage out. Evaluate what to keep
in-house and what to outsource. This allows public departments to remain focused
on delivering core services.

Communicate. Convey outsourcing plans to
all stakeholders, internal and external, including unions, to overcome
opposition

Get into the community early. Talk to
outsourcing suppliers before you procure services and before a ?vision? is put
together.

Create shared incentives for partners. The
government needs to understand that profit is important for outsourcing
suppliers too. The NOA advocates the use of gain share models to ensure that
organisations and suppliers are working towards a common goal.

Full story at http://www.computing.co.uk/computing/news/2263061/coalition-government-expected