Information Technology in Public Services: Towards the Contractual Organization?

Abstract

The growing trend towards information technology (IT) outsourcing is analysed within the UK pubic sector. The paper first details the research findings on factors influencing the degree of success experienced in a range of IT outsourcing deals. These factors are then utilized as a framework for analysing and discussing two case histories - of selective and large-scale IT outsourcing - drawn from different parts of the public sector. Both demonstrate how distinctive public-sector contexts influence the direction and degree of outsourcing. At the same time they highlight a range of managerial and organizational issues raised by moves towards contractual, core competence forms of organizing. Selective outsourcing is revealed as effective provided key decisions and actions are taken. The large-scale outsourcing case raises a number of critical issues not just for how it can be conducted in public-sector contexts, but also about the efficacy of such arrangements in terms of cost savings, possible over-dependence on a few suppliers, and ability to respond flexibly to changing political requirements and legislation.