Public sector faces outsourcing capacity problems

The Office of Government Commerce has warned that the public sector faces problems with outsourcers as a result of capacity problems in the market.

The Office of Government Commerce has warned that the public sector faces problems with outsourcers as a result of capacity problems in the market.


In a report for the public sector’s Chief Information Officers’ Council (CIOC), the OGC outlines the findings of its Information, Communications and Technology (ICT) Capacity Pilot Project.


This project was commissioned to identify potential capacity issues within the ICT market. The findings were based on commercially available market research, and information obtained from 20 public sector organisations and 13 key ICT suppliers.


In addition, details of more than 170 ICT public sector projects with an annual value of about £3bn were obtained to help put together the report.


The OGC identified “a number of specific capacity issues and constraints that could have an adverse effect on the delivery of ICT public sector projects”.


These included: suppliers’ ability to field senior experienced bid teams; a shortage of programme managers, technical architects, and change managers on both the supplier and public sector side; and increased risk being placed on suppliers, with them reporting “increasingly onerous terms and conditions”, causing them to be more selective on the contracts they bid for.


The OGC also said there were problems over the time it took for outsourcing staff to get security clearance and for software to be accredited for use in the public sector.


The OGC said offshoring was an unlikely solution to overcome capacity problems in the short-term.


It said, “While these specific capacity issues and constraints could adversely affect individual projects, it seems unlikely that there will be a widespread shortfall in ICT delivery capacity over the next three years.”


It went on, “This is primarily due to the UK ICT private sector growth forecast being relatively subdued, public sector project services spend being forecast to peak in 2008, and most suppliers advising of the need to maintain a balanced public and private sector portfolio, despite the level of growth in any one sector.”


Recommendations made by the OGC included public sector CIOs needing to ensure there was adequate visibility of their projects so that major approaches to the market could be better co-ordinated, and departments ensuring they were not competing with one another for the same resource.


Consideration should also be given to establishing a skills working group, involving the Cabinet Office’s Professional Skills for Government (PSG) and e-Government Unit, programme and project management (PPM) teams, and organisations such as Intellect and e-skills UK.


Given the bid capacity issue, coupled with the need for requirements to be attractive, departments need to ensure that the level of risk being placed on suppliers and the terms and conditions are consistent and appropriate, said the OGC.

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