Outsourcing popular internationally
- By Michael Hardy
- May 26, 2003
Outsourcing is increasingly popular for governments worldwide, according to a study by Accenture.
The study examined 22 countries, including the United States, and found that while almost all of them are increasing their outsourcing activities, their definitions of outsourcing and the work they are most likely to outsource varies widely.
For example, the U.S. government tends to define outsourcing as any job that a private-sector firm takes over from the government's workforce. Some agencies also include new work that was never done by government employees.
In the United Kingdom and Australia, government agencies use the term outsourcing when the private sector takes over a process or function, but not as often for short-term projects.
The study found that governments outsource to add value to their operations rather than to lower costs. Among the countries studied, cost reduction was ranked seventh. Improving service speed or quality, gaining access to expertise and gaining access to new technology were the top three reasons cited for outsourcing.
Information technology applications were the most common tasks to be outsourced. And the study's findings are consistent with the observations of other groups. Alan Chvotkin, senior vice president at the Professional Services Council, identified several reasons governments would outsource.
"The government is trying to keep up with the rapid pace of technology, and a better way to do that is to acquire it, to have a vendor responsible for upgrades," he said. "The second is budget constraints. The third is workforce capabilities."