The private sector can learn lessons from the public sector about outsourcing, despite some high-profile government IT disasters, according to law firm Shaw Pitman.
Alistair Maughan, a partner at the firm, told vnunet.com that the perception of public sector bodies lurching from one outsourcing disaster to the next is the result of a greater scrutiny of public projects.
But he maintained that the public sector is better than the private sector in its use of a structured tendering process, and in the dedication of resources for outsourcing projects and overall commitment to the end result.
"The public sector gets all the flack. The private sector is much better at not washing its dirty linen in public, but the list of problems is just a long," said Maughan.
"The public sector is not necessarily better or worse but there are some lessons you can definitely learn. The private sector is much more likely to go to a favourite supplier and a single tender solution.
"Some vendors, such as IBM and Accenture, are very good at keeping a foot in the door. But the danger with this is that you end up buying what they want to sell you."
Better and clearer selection processes lead to better scoped projects, according to Maughan.
Public sector projects are more likely to use dedicated project resources, whereas private companies will pull people from other projects and get them to work part time on the outsourcing deal.
"The public sector also tends to do a better job of setting correct expectations at the outset and managing to those expectations. There are benefits in not being totally bottom-line driven," he said.
A study by PA Consulting published in March found that only 41 per cent of public sector outsourcing projects, compared to 70 per cent of private sector projects, had failed to achieve the hoped-for cost savings.
The same study revealed that supplier relationships had been managed effectively in 95 per cent of public sector projects, compared to just 58 per cent of private sector equivalents.
Poor supplier relationships cost companies across Europe about €6bn every year, according to estimates from analyst Gartner.
"There are some bad bits from the public sector, particularly the political dimension, but in the private sector there's more of a tendency to knee-jerk reactions and moving the goal posts," concluded Maughan.
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