Outsource Magazine

Gone are the days when there was a natural consensus, never mind zeal, in support of this reform. Now there are more likely to be public doubts – about whether outsourcing can really deliver savings and, perhaps even more importantly, whether there is a quality dividend as well.

A recent survey by jobs website Totaljobs.com made the point well for the public sector. True, a majority of HR Directors in government, local authorities , the NHS and police agree that greater outsourcing would cuts costs. But only around a quarter believe that it would lead to better quality services.

Their real concern? That increased outsourcing would rob the public sector of the skills and experienced people it needs to do a good job.

Now, there is a strong sense in which these results don’t matter.  HR departments are not the final decision-makers and their perspective is often necessarily partial. They have their particular priorities and prejudices that don’t necessarily match those of their organisation or, significantly, those of consumers and users of public services.

But the worry must be that this is part of a wider picture. There is scepticism around about outsourcing that could easily turn into opposition, particularly as austerity bites and the public mood becomes more protectionist. We can see it every day in the reluctance of politicians – and business leaders – to speak up for the contracting-out of services, even at a time when the arguments for doing so are particularly powerful.

So the case for outsourcing needs constantly to be re-stated and re-won. And the argument must be as much around quality of service as the drive for greater efficiency and value for money.

One factor in this will be the long-term health of the organisation which commissions the outsourced service.  Does outsourcing strengthen organisations, give them focus, and help them to drive their plans forward?

And this, again, is not just about providing a better service. Outsourcing needs to do more. Can outsourcers also demonstrate that they provide the necessary support and infrastructure to leave their clients stronger than they found them?

Much of this depends on the effectiveness of the commercial and contractual relationships. Both parties can benefit from high quality advice and consultancy support.

But it also requires a thorough risk assessment and risk management programme.

For instance, what is the projected impact on the company if many of its activities are outsourced? How will skilled and ambitious staff respond to this new world? Is innovation more likely or inhibited by the outsourcing? How are the relationships to be managed and quality employees retained?

New business models will emerge from this recession, and many will feature a hub organisation with many outsourced facilities. But the business imperatives of quality and sustainability remain. The public must see that outsourcing can rise to the challenge.