Government outsourcing: get with the program! - News - Business

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This story was printed from ZDNet Australia.
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Government outsourcing: get with the program!

By Megan McAuliffe, ZDNet Australia
June 08, 2001
URL: http://www.zdnet.com.au/news/business/soa/Government-outsourcing-get-with-the-program-/0,139023166,120228483,00.htm

Current government outsourcing methods are behind the times according to Unisys Australia, which believes a re-focus on business desires rather than cost savings need to be deployed if the public sector wants to operate in the e-government world.

-Government IT contracting is still the same as it was 40 years ago," Unisys general manager public sector South Pacific Group Alan Koehn said.

Koehn believes current outsourcing agreements between government and industry are no longer relevant.

-A cost savings approach to outsourcing restricts the government's ability to improve its business", he said, limiting the service it provides to citizens, business and government employees.

-If you are going into [outsourcing] just for the cost savings, then you will get exactly what you pay for," Koehn said.

According to Unisys, government's specifications-based approach is no longer applicable when it comes to IT outsourcing, as it is not flexible enough to move ahead with the times.

From conception to the point a contract is implemented can take up to two years, by which time the business needs of the government agency has changed, as well as the technology itself, Keohn said.

The answer is simple according to Unisys; instead of contracts being built around IT systems, such as implementing a particular technology, partnerships need to be based on a 'risk and reward' structure.

Keohn says that under such a structure, the vendor and government share in the savings or profits, only if the implementation is successful.

The government can be confident the vendor will meet expected outcomes as they have a vested interest in the end result, and the vendor has a more flexible arrangement to meet the changing needs of the government's business requirements.

-Contractors shy away from arrangements they don't understand and struggle to implement, and government is cautious about adopting new methods that rely on increased trust," Koehn said.

The partnership relies on the government agency trusting that the contractor knows what it is doing and the contractor trusting that the government will live up to its end of the bargain, -otherwise they do not get paid."