Spotlight on public sector outsourcing

Funding, skills and a favourable political climate are all key to providing excellent online service levels to constituents.

Written by Andrea DiMaio

For e-government to deliver on its promise, the emphasis must shift from the electronic front office to the back office, and from websites to better integration of data and applications across agencies and tiers of government.

This is a much more complex endeavour than simply opening virtual service access points on the internet. It poses fundamental questions about the core mission and processes of governments, as opposed to the frills and thrills of websites and portals.

How can governments provide excellent online service levels to constituents in a climate where attention to cost justification and value for money is top priority?

Funding, skills and a favourable political climate are all key. However, the single most important factor is the way that the roles and responsibilities of the public and private sectors are blended to deliver and manage electronic services.

The pace of technology change, combined with increasing expectations from constituents and ambitious plans to become citizen-centric and more transparent, all call for more intense and effective collaboration between public sector organisations and a variety of private sector suppliers (including, but not limited to, IT service providers) and intermediaries.

Collaboration between the public and private sectors can take different forms, ranging from providing skills or deliverables as part of a change project or business initiative, to managing services or solutions, typically as part of service delivery.

An additional role for private sector parties is to intermediate, aggregate or add value to e-government services.

As well as the licensed intermediaries of government services, such as car dealers registering vehicles or accountants filing tax claims, other intermediaries can act as integration agents.

They can link services on their customers' behalf, such as a utility company providing a change of address service, or they may bundle proprietary and public services to add value to each other, such as travel agents or banks.

Any sourcing strategy must start with a gap analysis between strategic goals and current internal capability: competencies, processes and services. This will reveal which are unsuitable or do not have sufficient resources to be run internally.

Government organisations must also understand what the local services market can provide in the expected timeframe. The evaluation should consider the simple availability of a service, as well as its service maturity, quality and stability.

Relationships need to be managed over time, which relies on a solid governance framework addressing culture, organisation, management, skills and process issues. It is essential that the contractual relationship benefits both parties.

Whereas this means increased profit and revenues for the external service provider, government organisations will have to look carefully at how that relationship benefits three different areas: service levels to constituents; operational efficiency; and fulfilment of political objectives.

Government organisations must also understand the different nature of deals. If it aims at cost containment, service level and price will be the dominant factors.

If it aims at productivity gains, its value will depend more on good relationship and flexibility. And if it aims at innovation and new business models, alignment and vision will be vital to success.

A sourcing strategy must be an integral part of e-government strategy and must be a concern for all top level executives in government, not just the chief information officer.

Andrea DiMaio is vice president of research at analyst Gartner.

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