Outsourcing: Public and Private Sectors Still Have Much to Learn

Outsourcing: Public and Private Sectors Still Have Much to Learn

All too often, success or failure of government outsourcing or shared services contracts is down to perception.

To see the true value of outsourcing, the government must ensure that improvements are measured. Of the five major shared services arrangements studied recently by the National Audit Office, only two are making any attempt to track their cumulative benefits. Not monitoring results at all could be considered negligent. There is an argument for mandation to make such practices illegal.

That could be a long way off. In the meantime, this spring, the All Party Parliamentary Group on Outsourcing and Shared Services will produce a report to the Cabinet Office. From collated evidence, it will showcase a range of pragmatic suggestions on how the government can skill up, to produce a culture of truly intelligent procurement, accessible to SMEs and corporations alike.

Mike Booker, director of public sector at totaljobs.com, wrote recently that one third of government decision makers think that “a lack of skills was the key reason for the cancellation of outsourcing contracts in 2011.”

Despite the oft-debated skills crisis, there are certainly pockets of excellence throughout government. But to create and manage flexible, future-proof deals, with results tracked properly, there is a definite need for better skills across the whole public sector. There is a wealth of private sector experience available in the public sector and these staff can help challenge a widely-held belief that the public sector trails the private by 15 years in terms of procurement capability.

But just as much as any perceived skills gap, ineffectual management of outsourcing could also be due to over-prescriptive contracts that are no longer fit for purpose. The focus should be on the end goal: improved, cost-effective services for the public. Insisting on conditions and caveats as to how goals are reached can unnecessarily hamstring success. Many government contracts lack the flexibility to move with the times.

Only a flexible contract and a true partnership approach can make an outsourcing deal work long term. Fortunately, these skills are something that can be taught: so long as the private and public sectors put their heads together to learn from each other.

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