Commonly used as a blunt tool to wring costs out of "non-core" government functions, outsourcing is finally beginning to be explored as a way to transform the culture and effectiveness of government workplaces - and not necessarily with a transfer of jobs to the private sector, according to a new international study released today by Accenture.
Yet inherent obstacles in government outsourcing – and often mixed results – indicate there are valuable lessons to be gleaned from a few pioneering agencies that have achieved break-through success.
The report includes specific recommendations from experts and government executives worldwide who have successfully used outsourcing to boost both performance and efficiency in their own workplaces. Few executives ranked cost savings as the primary objective in outsourcing – preferring instead to focus on increasing the overall value of services. However, the study cited research showing that governments generally can reap average cost savings of 20%-40% over the life of an outsourcing contract, which typically runs anywhere from three to 10 years.
“Until very recently, outsourcing was nearly an unspoken word in public-sector circles,” remarked Tom Healy, a partner in Accenture’s government practice. “Now government outsourcing is finally beginning to show its vast potential to help deliver public services faster and more efficiently.”
The study offers advice for public sector executives: stay actively involved, leading strategy and operations; manage expectations; involve employees and unions early; look beyond savings to value; and use innovative business models, such as joint ventures and private finance initiatives.