Outsourcing Service

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Outsourcing is not an end in itself. Its successful adoption involves departments in making important decisions about the business they are in and the best mechanism for delivering their services to the community. Outsourcing is a management tool and should be approached in that manner.

Departments may also benefit from having their staff work with the service provider's specialists. To ensure a department's interests are well served, contract managers will need to keep their own knowledge up-to-date.

Benefits

• Reduction in costs. Budget realities have an impact on deciding which functions are to be performed in-house and which to be outsourced. In many cases outsourcing can reduce both capital and recurrent costs. 

• Flexibility in service delivery. Maintaining the level of equipment and staff necessary to cover peak loads can leave a department with under-utilised resources during off-peak periods. Outsourcing of functions that are subject to peaks and troughs in usage can provide a department with the flexibility to respond rapidly to changing demands.

• Improving service quality. In an era of increasing specialisation and rapid advances in technology, many departments find it necessary to keep pace with the best practice in the private sector. In the public sector, outsourcing can be an effective tool to improve the quality of services. Private sector service providers are not bound by government procedures and practices. They may have more flexible, innovative and effective ways of delivering services and ensuring the services reach the people they are meant for. 

• Access to technology. Departments also look to outsourcing to keep up with the accelerating changes in technology. Service providers often have more funds or expertise to acquire and maintain new computing/telecommunications resources than Government departments. 

• Focusing on core services. Successful outsourcing allows the civil service to focus in-house resources on tackling priorities. When a department concentrates on carrying out its priorities, it can use its financial, human and management resources more effectively and efficiently. Outsourcing of some non-core functions provides departments with the flexibility to redirect and focus their resources on activities critical to their mission.

• Access to skills. Departments may experience a shortage of skilled and experienced staff brought about by the change in the business operation landscape, retirements, resignations, caps on recruitment or an inability to recruit into the civil service. Existing staff may not always have the necessary skills to keep pace with rapidly evolving technology. In general, departments will source core function skills through recruitment and use outsourcing to access skills that they find difficult to recruit and retain.