Local authorities have got a bad deal from kitchen sink
outsourcing deals with private industry and should take their most
important IT functions back under the wing of the public sector,
says consultancy Deloitte.
Contrary to the belief in recent years that local authorities
could save money by handing their entire IT departments over to
private contractors, Deloitte said outsourcing suppliers are better
suited to providing "highly commoditised IT functions, such as
desktop, networks and datacentres".
Councils could make "significant savings", make better use of
their IT and do a better job for their constituents if they kept IT
strategy and supplier management functions in-house, the firm said
in a report,
Taking control of IT.
"The days of the monolithic IT outsourcing deal are numbered,"
said Costi Perricos, Deloitte technology partner and report author.
"Successful outsourcing stories remain rare in local
government."
Bill Hall, director of local government IT at Deloitte, said
large outsourcing deals were an inheritance of a time when central
e-government investment drove a transformation in IT services.
Legal restrictions prevented councils from raising the capital to
manage the changes, so they outsourced to private firms who could
get the loans. Now belts were tightening and restrictions on LA
borrowing had been removed, councils were finding the big
outsourcing deals were no longer attractive.
Perricos said councils had treated IT as though it were a "black
box". The result was "failed outsourcing contracts", and a lack of
"centralised control" and "adequate governance".