Outsourcing is so well accepted by businesses and government today that the risk associated with handing an important task to a third party is one that organisations are willing to take in their quest to do more with less.
The problems with the NHS’s non-emergency telephone line NHS 111 is a good example of the risks organisations take when outsourcing. NHS Direct, which runs nine of 46 regional services, has said it is no longer financially sustainable for it to continue and that it is going to pull out of the service. Quite worrying when a supplier that agreed a contract decides it doesn’t want to do it anymore.
And earlier this month the Serious Fraud Office was called in by the government to investigate accusations that the security service provider had been overcharging the government by tens of millions in relation to its tagging service for offenders. Trust should be at the heart of any outsourcing contract. Also remember G4S failing to do what it was supposed to at the Olympic Games in London last summer, which meant the armed forces had to step in.
And what if your supplier is not willing to change to meet your changing needs. This month has also seen Sandwell Council give its managed services provider BT an ultimatum. The council recruited the services of BT in 2007 as part of a £300m 15 year contract to run services including finance, human resources, payroll and customer services functions. The council now believes the contracts should reflect the fact that the council has made hundreds of staff cuts. It believes the £15m a year is too much now because there is a reduced volume of work and it has given BT a deadline of 30 days to address this or it is going to pull the plug on the deal and take it all back in-house.