Getting IT Outsourcing Right In The Public Sector

By Chris Telfer|23 February 2017

Outsourcing in the public sector is nothing new. In 1996, long before the Internet evolved into an essential communication and service channel for the public sector, the government had outsourced IT activities worth £2 billion.

Unfortunately, in the early days of public sector outsourcing, Compulsory Competitive Tendering (CCT) caused a race to the bottom, with contracts awarded based on price, not value created. This policy was amended in 1998, with a shift in focus to value, rather than cost.

Despite several changes in government, the public sector is still going through a value-based transformation, albeit one with a different focus: the service user. In other words, how we, the general public, experience government digital services should have a direct impact on IT outsourcing and the delivery of public sector technology platforms. However, that is not the only challenge government departments, and local authorities are facing when it comes to managing IT services.

Demolishing the Tower Model

Since 2011, the Cabinet Office has taken responsibility for the government's ‘Digital by Default’ strategy, resulting in some profound changes to IT outsourcing. Government Digital Services (GDS) is one of the most innovative core departments within the UK government, pulling in IT talent from across the country and further afield.

GOV.UK - the government's web platform - is the public face of a major effort to transform how the public sector manages IT and interacts with the public and taxpayers. Behind the scenes, the most recent change GDS have announced is the Technology Code of Practice, published in August 2016.

Consequently, the needs of the user - those who will use the technology - are the priority in this and other guiding documents. Adoption of GDS rules has not always been smooth. Part of the confusion stems from new outsourcing rules, which force departments and local authorities to outsource to multiple providers. Although multi-sourcing is considered best practice, the result has been a hybrid of outsourcing and multi-sourcing (with some internal IT leaders afraid of change), known as the Tower Model.

In a blog, Alex Holmes, Deputy Director and Chief of Staff in the Office of the CTO explains that “the Tower Model is not condoned and not in line with Government policy. Government should use the best of what is already out there - not develop its own model.”

How to Get IT Outsourcing Right in Government

Getting this right means putting the user first, then picking the best range of providers to deliver the relevant services. Delivering this piecemeal won’t create the results the GDS is expecting, since experience already shows that “multi-sourcing can deliver over 40% savings, delivering services that transform how people work, quickly.”

GDS guidelines, which are filtering through the local level, encourage the ownership of IT strategy, even when delivery is in the hands of an outsourced provider. Points go to those that put the user at the centre, allocate resources in the cloud, and have the capability to implement agile concepts. As a general rule, getting IT outsourcing right involves “bring[ing] in the right capability and skills, analyse existing applications [and] . . . consider[ing] platform options before procuring and commissioning what’s needed.”

If you would like to discuss your IT strategy and how to get real value from IT outsourcing, please contact me. Call 0845 643 6060 or email

Further Information

5 IT Strategies for Business Success

Information Technology (IT) has revolutionised the lives of individuals and organisations. Innovation in this sphere has created business opportunities that did not exist five, ten or twenty years ago, both in the way companies operate as well as the services and products they sell.


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