IT has traditionally been outsourced by the public sector, but the results of this have been mixed to say the least. The ‘your mess for less’ model can work poorly; and while a static, routine service can benefit from providers’ economies of scale, these always come at the cost of innovation, improvement and ability to adapt.
But it is understandable when an organisation feels that IT is not at its core (which is harder and harder to believe these days), and that it can trust another commercial organisation to be its delivery partner.
Transform first, outsourcing second
Perhaps once the initial steps in digital transformation are taken, there may be an opportunity for organisations to engage a trusted delivery partner for the ‘transformed’ environment. Doing this once the heavy lifting is over allows the buyer to understand the ‘true new cost’ of running things, and to capture the benefit of the reduction before an outsourcing supplier takes credit for it – thus making them able to measure the real improvement they have delivered.
We have been working closely with public sector bodies to understand their pain points and help them overcome their challenges to achieve significant efficiencies but above all improve the quality of services they deliver to the public.
Flexibility, scale, and knowledge
Outsourcing doesn’t have to mean handing over full control. Especially for public authorities that are working with more traditional on-premise IT systems, transitioning to the cloud and deploying Software-as-a-Service (SaaS) solutions, where the OEM tech vendor is responsible for the deployment; upgrading and maintenance of the systems, might come as a ‘cultural shock’. This can cause lack of internal support and even push back for the project. But the right partner would allow authorities to maintain a level of autonomy, control and input throughout the process.
For this, flexibility needs to be built into the contract, and the customer needs to retain architecture and commercial capability.
Think smart, and choose a provider that can offer a comprehensive front-to-back end solution. Public sector organisations operate a complex IT estate with a myriad of legacy front and back-end applications that are often disparate. Outsourcing or transforming either the front or the back-office alone can add a further layer to this complexity.
It is important to ensure that systems are integrated and information and data feed into one another. This will save authorities money down the line. Sooner or later integration will be inevitable, so best address this early with a partner and ensure they have integration capability.
Don’t be afraid to be different
This is the time to break any remaining silos and it is likely that a technology solution that delivers results and brings value in one area can, in fact, be as efficient in other areas of the organisation.
In an overcrowded marketplace, embarking on an outsourcing project and choosing the IT partner to implement it can be daunting. Work on aligning the incentives to your desired business outcomes with your partner. If you cannot have three clear, measurable goals that you can contractually describe as testable KPIs for an outsourcing partner, and structure their incentives along those lines, then don’t do it.
Written by Denis Kaminskiy, Co-Founder at Arcus Global