February 20, 2002—According to a new study by management consulting firm, Accenture, growing evidence shows that public sector organizations can use outsourcing to save money, extend their capabilities and improve the services they provide to citizens and businesses. However because some outsourcing initiatives fail to produce the expected results, says the report, many executives see it as a means of government downsizing, an abdication of accountability or simply a risky financial maneuver.
The study entitled, “Outsourcing in Government: The Path to Transformation,” is based on interviews with senior government executives and outsourcing experts across eight countries. The study identifies five key themes emerging in governments’ perceptions and practices with respect to outsourcing:
- Results from government outsourcing are mixed. As executives set their sights on outsourcing to deliver value, not just reduce cost, orchestrating effective relationships becomes more challenging. Measurement difficulties complicate the process of assessing and ensuring progress.
- Outsourcing in the public sector is particularly complicated. Executives struggle to keep initiatives on course through well intentioned, but time-consuming procurement processes and strong pressure from shifting political agendas, union pressure, changing leadership and uncertain budgetary support.
- The conventional wisdom about outsourcing further restricts executives views of whats possible. Government executives lean on static concepts like “non-core” and “inherently governmental” to frame their outsourcing initiatives.
- Performance-oriented governments have learned to make outsourcing part of everyday good management. Outwardly focused, progressive governments institutionalize good outsourcing management through activity-based budgeting, clear goals and objectives, and visible progress reporting.
- A small number of leaders around the world achieve breakthrough benefits when they leverage outsourcing to transform the way their organizations work.
For more information, contact Accenture.
