Governments interested in outsourcing: report

A recent report published by management consulting firm Accenture found the public sector is considering outsourcing some of its IT functions in an attempt to change its internal culture and improve workplace efficiencies.

The study, entitled Global Study on Outsourcing in Government Services, is based on interviews with 50 senior-level government executives and 11 policy advisors from eight countries including Canada, Australia, New Zealand, Singapore, South Africa, Spain, the United Kingdom and the United States. They represent industries such as tax and finance, defence and health and agriculture.

The study looked at how governments could improve their processes by outsourcing, but revealed they are also moving cautiously as, internally, there is a resistance to change coupled with management’s fear of losing control of contracts they would normally oversee.

However, Accenture estimated that governments could save between 20 and 40 per cent of their operating costs by outsourcing over a three to ten year contract duration. And despite the challenges, the public sector is intrigued by the possibilities that outsourcing offers.

“Today government outsourcing is beginning to be recognized for its potential to deliver public services more efficiently and with equal if not better results,” said Mark Boudreau, a partner with Accenture’s government practice in Toronto.

He added that aside from cost savings, the impetus behind moving toward outsourcing should be about transforming business processes. Of the eight countries profiled, Australia, New Zealand and the United Kingdom are all considered ahead of Canada in how they view outsourcing policies.

Several outsourcing companies say public sector interest in this area is nothing new, as they have already been providing outsourced IT services to government for decades.

“Our history with governments is there are certain services in IT that they will outsource. They look to us in forms design and conversion,” said Sydney Sloan, the director for product marketing for Ottawa-based Accelio.

As a provider of Web solutions such as e-forms with hundreds of government contracts around the globe, Sloan said the public sector has and continues to look to Web-based services to deliver e-government services online.

And while the Canadian government continues to move the bulk of its services online, it is also examining other portions of its business to outsource.

“They’re outsourcing everything from help desk support all the way up to major upgrades of their facilities, basically their complete IT environment which would include all their computers and all the communications in connecting those computers together,” said Ed Mifflin, director of defence and aerospace business development for systems integrator xwave in Ottawa.

Mifflin said that it is a combination of cost savings and recognizing that IT is not where government’s traditional strength lies that explains the acceleration to outsource. He added that xwave, too, has long-standing IT outsourcing contracts with the governments in Newfoundland and Labrador.

xwave in Ottawa can be reached at

Accelio in Ottawa can be reached at

Accenture in Toronto can be reached at