Saving money

The current UK government expenditure now stands at around £680 billion a year, of which only around £80 billion worth of activity is outsourced. Currently, much of that spending is at a local level, but it is my view that this should eventually be spread across national government sectors. With every sector currently looking to reduce their operating costs, it is apparent that IT outsourcing has crucial part to play.

This is because currently, organisations in the public sector are looking to maintain services as best they can while recognising that there will be less money. Therefore, outsourcing is an ideal fit. Personally speaking, whoever takes over the key to number 10 this year should be more concerned with commissioning the right outsourcing services rather than taking tasks on themselves. Therefore, managers in the public sector should turn to IT outsourcing at a time when improving efficiency and cutting costs is imperative. A successful outsourcing strategy provides a medium to long-term solution, which can not only deliver the necessary cost savings to ease the burden of the current deficit, but also provide improved operational efficiency and access to specialist skills and technology. This allows any new or existing government to focus on core (in-house) activities. But just what are these services and how can government sectors best take advantage of them?

Releasing the pressure

If you take IT services as a prime example, an outsourcing service provider is better placed than a government body to transfer paper to electronic records, having already made the investment in the required technical equipment, training and skills. These are assets that government departments simply do not posses in house. Therefore, outsourcing these services enables them to transfer the processes to a supplier who has a stronger ability in handling them, while allowing the public sector to concentrate on its core responsibilities.

Health care is a prime example of a sector that is always being asked to fulfill the escalating needs of the patient, not to mention having to comply with the ever-changing government rules and regulations. A change in power could potentially increase these headaches, as any new party is likely to make changes to stamp their authority early on. Therefore, every health care service should look to grow with the ever-changing technology in order to provide high quality health care services and therefore survive in the exceedingly competitive market. One possible way is if the industry adopts health care IT outsourcing. As the health care industry has to continually deal with the mission critical information, highly important data and high network connectivity, the challenges could be outsourced to a specialist services provider.

Meeting new goals

Furthermore, service providers from across the globe with expertise in this critical sector have been engaged in electronic billing records, medical billing, transaction processing systems, document management, integration of existing back end systems with highly new and advanced tools.

However, in order for the healthcare sector to fully benefit from the services provided by their chosen outsourcer, continued innovation form the service provider and trust in the form of a public/private partnership needs to be established.

Innovation and trust

Government must work with their selected service providers to increase trust and develop new innovative processes. Previously, a lack of trust has been the major barrier preventing successful public/private partnerships. The public sector must learn to trust the contractor‘s ability to do things better. For this to happen, contractors need to prove that they can deliver projects more efficiently. Suppliers must also work to ensure they operate in a transparent way. They must be forthcoming with new ideas and innovative suggestions to improve traditional delivery methods.

Firstly, barriers to innovation must be reduced. There is willingness in the outsourcing service industry to match fees to outcomes, for example to match the management fee to educational outcomes in schools. However, this rarely happens because the people who own the contract don’t have the ability or intention to challenge the process. Another problem is that often the public sector wants something easy to measure, and that is usually cost. Achieving high-level outcomes in a changing environment requires institutionalising innovation as part of the outsourcing process. This could include innovation such as utility computing, the packaging of computing resources, such as computation and storage, as a metered service similar to a traditional public utility.

Secondly, trust between the two parties must be developed. This comes from the outsourcer providing regular communication with their specialist sector. I believe this can be assisted greatly by having a CIO in place to handle technology strategy on the government side. This would make life easier when co-coordinating with the chosen service provider, as they will be able to communicate on the same technical level.

The future

In summary, no matter which party is in power after this year’s general election, government will need to cut the costs of delivering public services without compromising quality. It is clear that service providers can assist and add value to this process.

However, the re-commissioning of ineffective services must stop and the elected government must look to service providers to do things differently. This may mean radical changes in the way services are delivered. One thing’s for certain, outsourcing complex IT processes has to allow expert providers to work on behalf of or in partnership with the government. Only then will the government in power be free to do what it should be doing– making policy and acting as custodian of standards.