A third of Swedish Government Agencies lack a sourcing strategy. This was one of the conclusions from a recent PA survey published in the magazine CIO Sweden. A fact which could prove costly to Swedish Taxpayers.
“CIOs and IT Managers are under intense pressure to transform operations and deliver cost reductions”. This is according to Mattias Lundmark, Sourcing Expert in PA Consulting Group who recently carried out a survey of sourcing in the Public Sector across the Finance, IT and HR support functions.
What could be the impact of a third of Government Agencies not having a sourcing strategy?
”It may be that they are satisfied with their delivery model and do not need to make any changes”: But there is a risk that they are transforming the organisation without having considered the whole picture. This could have serious consequences”.
Could you give an example?
"One example could be where a function is outsourced without considering the impact on the overall operations. There is a risk that you pay over the odds as costs increase and quality is reduced”, says Mattias Lundmark.
Government Agencies say they find the biggest challenges of the sourcing cycle relate to defining the sourcing strategy (30%), developing the solution (35%) and implementing the solution (35%).
Why is that?
“Outsourcing initiatives are sometimes quite challenging to implement. They require organisational transformation and changes to roles and responsibilities. These are sometimes hard to manage. Considering this, a success rate of two thirds is quite good, although you may wish it was closer to 100%”.
The survey also shows that outsourcing has other positive effects – some which are unexpected. “They are usually related to standardisation, risk reduction and flexibility- advantages of a large scale delivery capability”.
What is your advice to Government Agencies to succeed with sourcing?
“Without management support to drive strategy, implementation and participation there is a limited chance of success. The management team needs to proactively participate in the implementation. They need to allocate sufficient resources, competencies and prioritise quality and attention to detail throughout the process”, says Mattias Lundmark.
Mattias Lundmark is sourcing expert at PA Consulting Group
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