Editorial: Not an outsourcing blow-out

The current Clayton's enquiry into federal government IToutsourcing on the back of an unfavourable report from the auditor general, which revealed a 300 per cent cost blow-out instead of expected costs savings, has limited relevance for the private sector.

It's true that the federal government has pursued outsourcing with a sometimes ideological zeal and spent too much along the way, providing much fuel for the federal opposition's ongoing anti-outsourcing campaign, as reported in Computerworld (September 18, p1 and November 13, p1). Federal government accountability is one thing, practicality for enterprise IT departments is another.

The fact remains that IT outsourcing makes undeniable sense for many Australian oganisations. For many IT projects, outsourcing significant chunks of the work is the only way to get the job done. The alternatives include building, skilling up and retaining significant in-house IT capacity which may only be used during a project's implementation phase. Achieving this level of self-reliance within a tight skills market and commercially pressured time frame would be impossible for all but the largest Australian enterprises. And even they opt to partner.

The trick, according to pundits like Gartner's Rolf Jester, is to be strategic about the capabilities kept in-house and rigorous in your enterprise service provider selection and management. Not simply an outsource-almost-everything approach. The benefits of properly managed partnerships will probably not be found in cost savings, but should be expected in project deliverables (quality and timeliness), end-user and customer satisfaction, staff morale and liberation from back-office processes allowing time for you to work with line-of-business peers on core initiatives. It goes without saying that poorly managed partnerships will bring one stuff-up after another.

What's your view on private sector outsourcing ? Comments to david_beynon@idg.com.au

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