The Singapore government has always been a strong advocate of IT outsourcing. Most government agencies now outsource not only the development of IT applications, but also the operation and maintenance of such systems.
This is how outsourcing is done at present: The government agency specifies an application and puts it up for tender. The successful bidder develops it by following the specifications and delivers it as conceived. Ownership of the application remains with the government. Any change or enhancement is made only if initiated by the government. While this is an entirely appropriate model for heavy developmental projects such as building roads or bridges, it is far less ideal for building online services for e-government in the Internet age. That's because:
- The Internet is moving much faster than the typical cycle involving application specifications, tendering and development. New and better ways of doing things may appear almost as soon as some applications are launched, requiring changes to be made, thereby starting a new cycle of project definition, approval, requirement specs and redevelopment all over again.
- In this age of rapid technological changes, it is difficult for government agencies with complex requirements to define specific outputs clearly, especially if these requirements are themselves subjected to change. One solution is to have a series of short-term projects - but such piecemeal efforts are clearly inefficient.
- The government can never be as nimble as a private company in getting changes made, even if the necessary changes are identified. Without the pressure of a clear bottom line, the motivation for change is also significantly weaker.
'The greatest innovation in the e-government era will come through new kinds of partnership that remove the dividing line between the public and private sector in a way that conventional outsourcing failed to do in the past. The links between government and business go beyond a customer-supplier relationship to one in which both parties work together to deliver the e-government vision. The primary idea is a contractual arrangement where each brings something to the table, where private sector enterprise and innovation are 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.'
Harvard professor Jane Linder noted that IT outsourcing in the Internet age needs to move beyond conventional means and towards a more sophisticated 'collaborative outsourcing' model. This is where the customer works with the outsourcer to jointly define outputs and outcomes interactively, and where incentives and penalties based on pre-defined performance metrics are used to drive performance.
Such outsourcing relationships offer a significant upside in the form of customer delight and greater efficiency as the interests of the customer and outsourcer are well aligned. However, the downside is greater ambiguity and potentially obscured accountability.
Collaborative outsourcing forces the vendor to take strong ownership of the project and drive for peak performance. The interests of outsourcer and vendor are aligned, leading to a win-win situation. Within Singapore, one example of collaborative outsourcing was in the development of MIW, the NSmen's portal by the Ministry of Defence. This was carried out by Internet startup Green Dot Internet Services Pte Ltd.
Various committees under the Remaking Singapore initiative have continued to call for greater innovativeness and risk-taking in government, and for more government-industry partnerships. Collaborative outsourcing can be a good model to achieve these benefits.
It is therefore timely for government agencies to seriously consider this model when preparing for e-government outsourcing. This may just be what is needed for Singapore to move into the top spot in the worldwide ranking for e-government in the future.
Quelle: The Business Times, 28.10.2002
