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outsourcing no threat to services 23/02/2008 Recent scandals of lost data, including the lost personal details of 25m people, have rocked the government, created the risk of mass fraud and raised many questions about how the state delivers services. Initial suggestions that the relevant computer disks may have been lost by a company to whom some internal mail systems had been outsourced have been denied, but a leading West Midland outsourcing lawyer says such criticism is typical. Peter Manford, a specialist in trade and outsourcing at Birmingham and London law firm Martineau Johnson, explains: "Outsourcing partners can be a scapegoat because they are an easy and non threatening target for blame. "Criticising the private prison guarding service when they lose an inmate in transit or blaming the outsourced private cleaning firm in hospitals for MRSA is convenient. "However, have they really made matters worse or simply failed to improve performance as had been intended?" He points out that such lines of complaint are often fuelled by vested interests, including trades unions. "But outsourced services are often carried out to the same or better standard and with greater efficiency than if they were provided by the organisation itself," he said. Mr Manford believes, however, that when it does not work, the problems often stem from the way the outsourcing partnership is managed, at least to a significant degree, and warns that problems can arise from a laissez-faire attitude by the customer. "Outsourcing is not a magic carpet ride to perfection, nor is it an excuse for the abdication of responsibilities," he said. "Properly prepared contracts will include a comprehensive service level agreement. Also, the customer should retain some continuing management resource so that they can oversee and manage any significant outsourcing arrangement. "Preparation for a successful outsourcing starts early. Customers should ensure that they have a clear vision of exactly what will be outsourced and how that fits with their business and strategy.
"Establishing that will usually involve considerable planning, including a precise identification and definition of the functions to be outsourced. "This must then be written into a service level agreement, together with detail on how the outsourcing partner will be managed. "Careful and methodical selection of the outsourcing partner is then critical and, of course, those in the public sector appointing an outsourcing contractor must also comply with the complexities of the procurement laws. "Employees can be affected in a big way and they will generally retain the benefits they had before if they are transferred to an external supplier. This can cause challenges, for example, when looking to maintain generous public pension arrangements." Mr Manford has some direct advice for those going for an outsourcing solution: "The need is for the organisation planning to outsource to draft and take control of the contract and the tendering and negotiation process. "It is vital that together the contract and the service level agreement specify the standards and provide for appropriate staffing levels, management and quality control. But it must also have the capability to be flexible as times and circumstances change."
For further information please contact Peter Manford on
peter.manford@martineau-uk.com |
