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2005

Outsourcing must be managed well

By Jonathan Cooper-Bagnall

Financial Times31 January 2005

Sir - I would disagree with Michael Skapinker that “the outsourcing fashion has gone too far” (“Outsourcing the essentials is bad for your health”, January 25) but some organisations, including the Department of Health, are learning that it's not sufficient to write a contract and throw the delivery of services over the wall to someone else.

Outsourcing is not about abdicating responsibility. Its focus should be on getting a service delivered in a more efficacious manner. In fact, National Health Service research has found equivalent levels of cleanliness whether contracts are in-house or outsourced. Looking more closely at the hospital cleaning example, yesterday’s hospitals had to worry about a host of tasks related to cleaning, such as recruitment, training, day-to-day management, as well as purchase and maintenance of equipment and stock, not to mention the additional headcount and administration involved.

The MRSA superbug is organic and hugely complex, requiring a number of co-ordinated strategies to prevent its spread. Cleanliness is of the utmost importance and is one of these strategies to combat MRSA, but a robust outsourced cleaning contract, properly managed, lets the management team focus on the central task of curing patients and devote time to the broader challenges of MRSA.

The main issue that seems to have been missed is that it is not outsourcing the cleaning (or any other function for that matter) that is wrong; it is how the organisation goes about managing the arrangement with the outsourcer that is important. The organisation, the hospital trust in this case, is still responsible – it has to work with the contractor to get it right, including budgeting for and creating a retained organisation within the hospital to ensure the cleaning contractor’s performance is constantly up to scratch. It’s worth noting that the NHS recognises this and is now guiding hospital trusts on this issue.

There are words of wisdom in Mr Skapinker’s article about the need for rigour and to understand the effects of outsourcing on an organisation’s future but let's not throw the baby out with the bath water. Outsourcing done the right way can provide significant benefit, financial and otherwise, but like everything else there is a commercial reality - get it wrong, underestimate what is takes to get it right and it will come back to bite you.

Jonathan Cooper-Bagnall,
PA Consulting Group,
London SW1W 9SR

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