Abstracts: January 10th, 2013

Strategic sourcing, a more sophisticated approach to obtaining the ICT services used by local public service organisations, is likely to offer less risk and greater benefits to communities than simple outsourcing contracts.

This call for councils to take a more strategic approach to outsourcing comes from the Society for IT Management in a new guide Planting the Flag.

The guide is published at a time when a catalogue of failed outsourcing deals, and instances of major services being brought back in-house, show how much the public sector still has to learn about procuring and managing wholesale outsourcing.

Strategic sourcing aims to find the best mix of local public, voluntary and private sector organisations to deliver the services required through a range of devices, from informal service level agreements to formal contracts. Services rarely come in discrete packages that can be allocated wholly to one particular supplier.

Potential suppliers may include collaborative partnerships; single public sector organisations providing services to other parts of the sector on a commercial basis; voluntary or third sector organisations; the community itself and commercial suppliers, including small and medium-sized enterprises.

Strategic sourcing acknowledges that organisations delivering the services have a range of legitimate interests, and also that requirements change over time – so flexibility is at the heart of a strategic sourcing strategy in contrast to expensively procured, fixed ten-year ‘strategic partnerships’.

Strategic sourcing recognises also that private sector organisations providing services do require reasonable profit opportunities but that less tangible benefits, such as improved access to a market, also contain value for them.

Arrangements may encompass a range of types or styles of service delivery, with benefits being achieved being achieved through different service approaches including bespoke, shared, or ‘off the shelf’.

Sourcing services in this way dispenses with multi-volume requirement specifications and contractual conditions that fuel dispute rather than harmonious service delivery, and typically become barriers to change later. The fact that traditional outsourcing contracts tend to freeze the current model of service delivery is a further disadvantage given the turbulent service environment, and the ever-changing nature and styles of technology.

The guide is published by SOCITM and can be downloaded here.