Outsourcing isn’t only for the benefit of private companies and individuals, agencies in the public sector has turned to outsourcing in lessen costs in operation.

For example, the Department of Motor Vehicles in South Carolina, United States have outsource its call center staff requirments to a same-state third-party provider and having the agents work on-site for better management and operations.

Despite the boons in the boom, Outsourcing has had a few bad cases dealing with issues of proper procurement of services.

One famous case involves Britain’s National Health Services and its IT outsourcing of its health services where studies have reported that IT outsourcers are over-charging for their services yet the agency still suffers from delays and shortcomings.

Martyn Hart, Chairman of the National Outsourcing Association in the UK, determines that it’s the NHS’ shortsightedness is the cause of the agency’s present outsourcing problems.

Reduction of operational costs should not be the only focus in the procurement of outsourcers but also the maximization of potential benefits the outsourcer can provide.

Forcing prospective outsourcing vendors to offer lower than market standard during the due diligence stage of the screening process could lead to higher costs later on.

Mr. Hart urges organizations, public and private, to observe the following approaches during the procurement process, a series of “checks and balances” found in good governance:

Define the Requirements in the service contract. Apply “needs analysis” prior to project launch in order to determine the viability of the project to meet those needs. Project objectives should be realistic and agreed upon by the parties involved. Structure the contract to be flexible in case, changes are needed to improve the viability.

Judge the service performance regularly and independently.

Refer to guidelines. These are to be included in the service contract and then followed to the letter.

Retain a team to handle the project first-hand. The team should ensure that the objectives and benefits are achieved with the outsourcer.

Learning from others’ experiences should improve one’s chances for success. Heaven forbid that a business should run like a bureaucracy, where often problems are dealt with by pointing fingers and shifting blame.

Problems and risks require good governance which involves responsible actions and the flexibility to come up with creative solutions. That’s the way good business gets ahead of the rest.

Outsourcing Solutions, Inc. – your outsourcing partner!



  1. Ballard, Mark. “IT Suppliers overcharging UK gov.” 2 March 2007. The Register. Accessed 21 August 2008.  Link here
  2. Hart, Martyn. “Is Short-termism holding back public sector outsourcing?” 20 August 2008. – Public Sector. Accessed 21 August 2008. Link here
  3. Heath, Nick. “NHS Head defends major IT delays.” 18 August 2008. – Public Sector. Accessed 21 August 2008. Link here
  4. Savvas, Antony. “NHS HR body signs £19M outsourcing contract.” 2 April 2007. Accessed 21 August 2008. Link here
  5. “Insourcing: New Twist in Call Center Cost-cutting.” 26 July 2008. CRM Accessed 21 August 2008. Link here


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