Combining innovation with values

Often accused of only wanting to skim the cream, outsourcers are falling out of favor and “insourcing” – the decision to bring projects back in-house – is increasingly being required to pick up the slack when outsourced IT projects are not completed on time or on budget, and are canceled before being finished … As they get started in e-business, and as they look to build and manage portals and develop online services, government organizations will want to weigh their options in order to maintain the flexibility of in-house projects while achieve the efficiencies that the private sector can deliver. Many governments are looking at ways to rise above the political dogma of the past when the right insisted the private sector should provide services while the left insisted it was the responsibility of the state.

The governments of New Zealand, Singapore and Denmark have each established something called a “domain partnership” with IBM that seeks to establish areas of common knowledge or interest spanning different projects that require the involvement of industry. Integrated public-private project teams deliver the project while central government staff monitor and determine priorities.

The British government is also looking to foster new types of relationships with the private sector by folding its private finance initiative into a wider public private partnership (PPP) program, which includes joint ventures where the costs of a project are not met entirely through charges to the end user but are subsidized from public funds. In many cases the government subsidy is to secure wider social benefits, such as economic regeneration, not reflected in project cash flows. The subsidy can take a number of forms, but the government is limited to a contribution towards asset development while operational control rests with the private sector.

As new procurement models continue to emerge, it’s clear that the greatest innovations in the e-government era will come through new kinds of partnerships that remove the dividing line between the public and private sectors in a way that outsourcing in the 1980s and 1990s did not. The links between government and business aren’t just about the administration buying pencils form business; they are about both parties finding new ways to work together to deliver the e-government vision. While “partnership” is a vague term used to cover all sorts of business relationships, the primary idea is a contractual arrangement where each brings something to the table, where private sector enterprise and innovation is combined with public sector experience and values, and where there is a shared approach to the provision of services and to the risks and rewards involved.

The experiences of many who have so far embarked on the e-government journey show that a private sector partner can help their organization be more flexible and innovative, areas where the public sector is traditionally weak. If a private company working under contract to another private company found a better way to carry out the work, the two firms would simply agree to modify their contract and get on with the job. But in the public sector, companies are traditionally tied to the word and nature of the contract. Partnering can get around this problem.

*Article extracted from ‘eGov: e-Business Strategies for Government’ by Douglas Holmes, published by Nicholas Brealey Publishing, ISBN: 1-85788-278-4. US $29.95. To order,