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The Bush
Administration’s bet on outsourcing to help save money
and improve efficiency is in sync with overall global trends.
Nearly
90 percent of 150 government executives in 23 governments
in Asia, Europe, North America and South America polled by
Accenture said they outsource activities that are “important
or absolutely critical” to their mission of citizen
service delivery. Only 2 percent of the execs said that outsourcing
is “relatively unimportant to their mission” of
delivering services to citizens.
The main reason governments
outsource: Drum roll, folks. To improve the speed or quality
of the service they provide
to citizens and other constituents.
According to a recent
survey, most government executives think outsiders can
deliver services better than people already
on their payroll.
What are the most common tasks that governments
outsource? Staff training and education programs; finance
and accounting,
human resources and supply chain operations; and information
technology applications and infrastructure.
“As governments become more experienced
with outsourcing, they seek new ways to derive greater value
from these arrangements
and are therefore more inclined to outsource processes such
as procurement, finance and accounting, and human resources,
which were previously considered too critical to outsource,” says
Steve Rohleder, group chief executive of Accenture’s
global Government practice. “By outsourcing certain
critical services and functions, governments can improve
the quality of service they provide to citizens and other
constituents while also increasing operational efficiency
and lowering costs.”
Interestingly, government executives
who said they outsourced to gain access to technology, change
operations or gain access
to workers with specific skills were more satisfied with
the results than were executives who said they outsourced
primarily to reduce costs.
For example, 71 percent of executives who said they outsourced
to access new technology, 71 percent who said they outsourced
to centralize or standardize operations, and 70 percent of
executives who said they outsourced to gain access to expertise
indicated that these objectives were “mostly or fully
met.” On the other hand, just 50 percent of executives
who said they outsourced primarily to reduce costs and only
24 percent
of executives who said they outsourced to increase revenues
said their objectives were “mostly or fully met.”
The
Accenture study also found that governments, which used
outsourcing to change the way they operate, were more inclined
to engage in business process outsourcing (BPO) than were
governments that primarily used outsourcing to reduce costs.
More than two-thirds of the executives who said they used
outsourcing to transform their agencies indicated that
they
achieved change by outsourcing business processes.
Based
on the data as well as in-depth interviews with government
executives, Accenture also found that governments usually
outsource to achieve one of two objectives: Make changes
in government operations to improve citizen satisfaction
and address severe budget deficits, or create efficiencies
through cost reductions and greater productivity.
Which
governments seem to be the most experienced when it comes
to outsourcing? Clearly the United Kingdom,
according to Accenture, which found the UK the most
mature of the
governments
studied in its use of outsourcing to drive change.
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