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Category Archives: outsourcing

While the last post addressed transparency among MPs this one addresses transparency among processes in the public sector.

The Directive on Services in the Internal Market requires EU members to provide the option to handle some bureaucratic processes online by 01/01/2010.

With just a few days to go Dataport (the joint IT devision of the two German states Schleswig-Holstein and Hamburg) announced it won’t be able to offer all services as planned. According to (in German) the software vendor SAP was unable to deliver new infrastructure modules in time. However, Dataport said all required services will go online in time, despite the missing modules, using a limited infrastructure. It is reasoned that the project was outsourced to India and this might have caused the failure. As a consequence Dataport terminated the contract with SAP for this project.

Outsourcing offers a lot of gains for each party involved. However, the main rule I experienced during the course of my studies is: processes need to be well defined when handing them over. Whereas the private sector strives to maximize profits, public sector implements policies. These policies are usually qualitative in their goals. Public servants have a margin how to interpret and hence how to implement the policies and might have an own (hidden) agenda they pursue. Thus it defining process properly becomes more challenging.

You might argue that IT infrastructure is something that is not political. It shouldn’t be, I agree. But: public sector differs not just w.r.t. goal definition but also how prestige is defined. In private business the main indicator to measure prestige is income whereas in the public sector it is power. Power is a mix of budget, people to manage, contact to high ranking politicians and other aspects. Hence infrastructure and its setup is political by nature as it determines who will control it and by this will gain power. This aspect increases the challenge to define clear processes and goals for this particular case and for many others.

To sum it up, the challenges in outsourcing public sector processes is in defining clear processes. To overcome the current shortcomings politicians should define KPIs already when enacting a new law. To make outsourcing a lasting success story for the pubic sector private parties involved have to be aware of this and ensure clear communication. Doing so can be beneficial for citizens as outsourcing can save millions of taxpayers money. Also another goal can be reached by defining processes clearer: Increasing transparency!