Outsourcing will improve delivery of ICT services in public sector

Many countries, including Rwanda’s would like to lower costs drastically in the public sector.  This priority, together with the perception that private sector companies tend to be more efficient and that a similar culture of competition in the public sector will increase the efficiency and effectiveness of management and operations, has led to a rethink in the delivery of CT services in the public domain.
ICT & INNOVATION:  Saddiq Mwai
ICT & INNOVATION: Saddiq Mwai

Many countries, including Rwanda’s would like to lower costs drastically in the public sector.  This priority, together with the perception that private sector companies tend to be more efficient and that a similar culture of competition in the public sector will increase the efficiency and effectiveness of management and operations, has led to a rethink in the delivery of CT services in the public domain.

Increasingly, governments are looking at selective outsourcing of ICT services which would ensure the control of fundamental public service delivery to citizens.

Using objective criteria based on cost savings, delivery against objectives and stakeholder satisfaction levels, one private sector research study found that long-term, large-scale selective IT outsourcing deals are successful.

Against this backdrop, ICT executives tasked with providing public services like e-government initiatives should consider adopting lean management techniques and practices to gain sustainable improvements in operating performance.

The adoption of lean management improves both efficiency and effectiveness in areas ranging from infrastructure management to software development. It is important to identify those activities and/or services that represent a leading competence advantage and distinguish them from those that have to be done competently, but no more.

The primary reason to outsource is to enable an organisation—whether public or private—to focus its limited in-house resources on the areas in which they are most effective. Subsequently, an external organisation can deliver services and support the public sector organisation in areas in which the organisation is not able to internally invest to become particularly proficient, for one reason or another.

The benefit of outsourcing in such areas is that an organisation can leverage its partner’s (usually) more effective and better-developed systems and processes to undertake “mass transactional” based services. In theory, this should lead to an increase in service levels at a reduced cost.

There are risks associated with outsourcing including a lack of competition which can hinder productivity and, in turn, economic growth. Public sector users also face high barriers to switching suppliers, such as costs of transferring and restrictive license agreements, while some suppliers seek to limit the interoperability and use of competitor systems with their own. Outsourcing of ICT service provision can result in a high level of dependence on suppliers’ expertise, undermining the ability of public bodies to drive value for money over time.

The overriding goal of creating public value is related to the achievements of objectives set by government programs and the delivery of public service to the citizenry. Public value is thus not related to efficiency of the action of the public administration, but rather to the effectiveness in the achievements of government programs. Given the on-going demand for more efficient e-government services carefully thought through selective sourcing could be a lower risk approach.

Issues like the maintenance of interagency data and its compatibility, the availability of data in the light of potential IT supplier competition and commercial confidentiality, as well as data security issues affecting citizens and the possibility of developing interagency IT usage in collaborative ways, are all concerns that need to be carefully managed and controlled.

Technology touches nearly every process, so improving IT performance can produce a ripple effect across wider public service delivery. Creating greater visibility and trust can help trim waste, raise productivity, and better serve citizens.

Information and communication technology is a crucial part of any modern economy and is essential to improving productivity in public services as well as businesses. Given the vital role that this technology plays in the delivery of public services as well as its cost to the taxpayer, any measures that can significantly improve the delivery of public services should be explored and pursued vigorously.

The writer is the PricewaterhouseCoopers Rwanda advisory technology director

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