At the Malaysian government's 8th annual Multimedia Super Corridor International Advisory Panel summit last week attention was focused on the region's current boom in outsourcing. But as the audience sat through an endless series of powerpoint slides, it became clear that one vertical was being uncharacteristically slow to reexamine its approach to sourcing - government. According to Ong Joon Leong, Country Partner at AT Kearney Malaysia, the region's public sector has been slow to evaluate outsourcing because of a "basic human tendency to fear change".
Ong argues that governments which outsource processes will be more competitive than those that keep everything inhouse, but that this competitiveness requires a loosening of the old 'command and control' mindset: "This will change, but for now the tendency of not wanting to let go has been the dominant response of administrations in the region."
"Government outsourcing is all about comfort level," says Bob Lees, Executive Advisor for Bearing Point in Asia Pacific. "Certainly public sector outsourcing breeds innovation and efficiency, as you've seen in Australia and New Zealand. But the rest of the region has been slow to follow in their footsteps."
Why outsource?
The outsourcing proposition is all about leverage. By bringing in specialist expertise from a third party, a public agency has the opportunity to augment its own HR talent and skillsets. By incentivising partners to meet service goals, and penalising them for missing them, public agencies share risk. By turning to a Business Process Outsourcing (BPO) vendor, administrations have the opportunity to adopt international best practice - without having to travel through the learning curve themselves. By seeking organisational transformation through outsourcing, a government department externalises change and avoids the uncertainty of internal culture clashes.
And then, of course, there is cost. Whilst outsourcing is no longer obsessed with pricing, there remains an opportunity to fix costs over the course of a contract - ensuring budgetary predictability, and perhaps squeezing out cost-savings over a number of years.
The Australian experience
The Australian federal government embraced outsourcing early. In the 1990s the Finance Ministry took a position that actively encouraged government departments to use the outsourcing option as a means of reducing costs. By taking such a strong lead, and defining the benefits of outsourcing rather narrowly, the early outsourcing projects achieved mixed results.
By focusing on cost, most of the initial outsourcing contracts failed to pin down qualitative expectations. In some cases this resulted in noticeable falls in service levels, and a public backlash against the outsourcing of government activities. In addition federal government agencies generally failed to audit the real cost of providing services and managing processes inhouse. This made it impossible to reliably benchmark the performance of the outsourcer.
Nonetheless as Australia's public sector established greater institutional experience of managing the outsourcing process it began to embrace a broader selection of sourcing options. Big government departments would still turn to large turnkey outsourcing providers, but alternative models began to establish themselves.
Groups of agencies with similar processes, and cultural compatability, started to aggregate services and outsource the aggregated whole to enjoy more favourable outsourcing terms. Western Australia has enjoyed particular success with its water authority, buiding department, land administration – all engineering-led organisations – coming together in a shared services model.
Drawing on the experience of Australia, Asian administrations now have the opportunity to accelerate their outsourcing learning curve. The region's governments have tremendous experience of managing the operational side of things - and they now need to transition to managing according to service outcomes, if they are to realise benefits from outsourcing.
Where government leads, the private sector will follow
And so, returning to the recent Malaysian government summit, there is an irony to listening to government-led calls for MNCs to consider the Asian outsourcing option.
If outsourcing to Asia is good enough for BP, HSBC, BMW, AOL and the rest of the Fortune 500 - shouldn't it also be good enough for public agencies in Malaysia, Singapore and the rest of Asia?
As Asian governments jockey for position in the increasingly crowded BPO market, there is an opportunity to establish a compelling business proposition for a country's BPO sector.
"Government outsourcing in Australia was one of the factors to encourage the development of the BPO industry there," says Lees. "Governments definitely have a role to play to act as catalysts in this industry."
Successful, selective outsourcing on a large scale by an Asian government to local third party outsourcers would transform the credibility of that country's BPO proposition in a single stroke. Just as importantly, it would also transform the business of government for the better.
Autor: James Smith
Quelle: Public Sector Technology & Management, 06.09.2004
