Hyped up deals and problems with helpdesks blamed for
negative view
In local government, IT outsourcing has an image problem. A
detailed survey of staff in 94 local authorities found that user
satisfaction was 13% lower in councils with outsourced IT compared
with those that ran IT in-house.
The highest scoring council with outsourced IT failed to make the
top 50 in user satisfaction.
The research was carried out by Insight, the consultancy arm of
local authority IT managers association Socitm. It comes at an
important time for local government outsourcing.
Cumbria County Council has signed a £50m partnership deal based on
performance outcome negotiated on an ongoing basis. Swansea Council
is still negotiating terms and conditions in a £150m outsourcing
process that sparked industrial action last year. Bradford Council
could be facing a strike over outsourcing. And Birmingham City
Council continues its lengthy negotiations over a massive IT
partnering contract.
Those entering outsourcing arrangements say they can offer greater
efficiency and bring an influx of investment and IT skills to the
local authority, but the Socitm survey found that council staff who
rely on outsourced IT support do not believe they benefit from the
deal.
Martin Greenwood, programme manager at Socitm Insight, said, "There
is a perception that there is less value for money in outsourcing.
The ability to solve a problem quickly and accurately is worse. It
can be harder to contact an outsourced organisation - you are
adding to the support chain. The person solving the problem is one
step removed from the people who need help."
These factors were revealed in the research, but Greenwood believes
there are other reasons behind the negative views of outsourcing.
"There is the perception that the supplier's staff are part of
another organisation, so it is easier to blame them."
Expectations can be unrealistically raised ahead of the deal by
both the IT services company and the council, Greenwood said. "A
lot of deals are hyped up before they are signed. This creates the
impression the service will be much better. In reality it may be
worse or not have changed, but expectations rise."
Even when metrics show that performance has improved under
outsourcing, the reputation of the deal could still be negative.
"There is some evidence that the performance on the helpdesk can be
at least as good on objective measures [under outsourcing], but
that is not the perception. Information is not communicated to the
users so they can see it."
Where Socitm was able to survey staff before and after IT
outsourcing, the results were disappointing. In English unitary
authorities the number of council staff who said they believed IT
spending was value for money fell by 33% after outsourcing.
Many local authority staff regarded themselves as intensive users
of IT, the survey found. "We argue, however, that the process of
embedding ICT into local government is not well understood and that
ICT might not be seen as being integral to the delivery of services
and the council's strategy, as it is in some other sectors of
business," the report said.
Socitm found that user satisfaction was lower when IT was not
embedded in council processes. "Problems embedding IT into the
organisation are not unique to local government, and it has been
very receptive to feedback. But it is a cultural problem, with a
history of IT not being critical to improving service performance,"
Greenwood said.
There were other alarming findings for IT managers. More than 38%
of users considered themselves to be inadequately trained to some
degree in IT. In this, outsourced IT scored better than
in-house.
Other areas where outsourced IT was rated as better than in-house
included having up-to-date hardware and software, user
participation in planning new systems, and a clear resource plan
for new systems.
Phil Morris, director at outsourcing advisory firm Morgan Chambers,
said the problem of users having a poor perception of outsourcing
was not unique to the public sector or to IT outsourcing.
"It is extremely common. It happens in the private sector and with
business process outsourcing. To solve it, you have to sell [IT
outsourcing] at every level within the organisation, highlighting
the advantages that you are creating," he said.
Morris said IT departments should publicise improved performance
metrics and case studies of business problems the outsourcing
partner has helped to solve.
"You need to continually sell what has happened. Classically, IT
managers are poor at saying what they have done well and the value
that they have created for the organisation. They think they are a
cost overhead because that is how they have been made to feel over
the years."
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