Do “the same thing cheaper”? Double-digit savings and efficiencies? Outsourcing seemed to be a no-brainer for cash-strapped local governments enabling them to meet rising citizen expectations. However, the fix was temporary and emerging technologies and opportunities to “do different things” mean there is now a need for fundamental revaluation.
In reality, the ability to effectively execute on the efficiencies outsourcing promised was overestimated and now the market has shifted. Increasingly, no-bid situations are occurring because suppliers refuse to accept the risk of under-priced contracts. Public agencies are forced to either find additional funds to make up for any defaults or bring services back in-house, thus, negating the benefits. One UK county saved £10 million when it brought its services back in-house. For those still in the game, underbidding and low margins are a real threat. Large UK outsourcing companies are suffering, with the recent collapse of one and profit warnings issued in another, leaving hundreds of public sector contracts in limbo.
Whilst there is no doubt that outsourcing did serve a purpose for a while, we are now in an era where the consumer is king and digital service is the norm. Citizens are increasingly taking ownership of their data, and they expect an ‘always on’ service. In the UK, 58% of citizens want public service organisations to use technology to improve services. These changing expectations are augmenting the social contract between government and citizens. New ways of working are needed, and those that harness digital tools and solutions will be the exemplars of our future cities.
It’s time to start re-imagining how local governments can better serve their citizens. Cloud solutions are scalable and cost effective as a pay-as-a-service model. Intelligent automation, such as robotics process automation (RPA), can take over tedious tasks, freeing up resources for more value-adding activities. Artificial intelligence can broaden the effectiveness of existing resources, making it easier for citizens to access public services and interact.
With the right digital transformation strategy, the benefits are significant:
- Local governments can better understand the needs of their citizens and the efficiency/effectiveness of their own programs. With proactive knowledge transfers, they can build capacities to be self-sufficient and adaptable to the demands and expectations of the community.
- Public employees can focus on more stimulating, valuable activities, improving engagement with citizens thereby creating a more rewarding career, reminding them of why they entered public service in the first place. 39% of UK citizens would be more interested in working for government if they used more innovative tech.
- Citizens would get better quality public services that are more intuitive, flexible and responsive. It’s a more effective use of public funds, ensuring they get more bang for their buck.
We all want to make our cities and communities better places to live, work and play. It’s time to leave outsourcing in the past and to establish a new normal. Effective digital transformation strategies promote creativity, allow freedom to flex and offer greater ownership of public service programs and outcomes.
Are you ready to bring your city into the future? I would love to hear your views on this topic. Please leave a comment below or visit our cities content hub.
See this post on LinkedIn: Digital transformation is the new black – Is your city’s outsourcing model out of date?