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Days are numbered for monolithic local government IT outsourcing dealsUnification of IT coupled with effective collaboration and governance required |
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A Deloitte report Taking control of IT urges local government management to take proper ownership of IT and develop adequate governance in order to make significant savings and reap the potential benefits of information technology.
Costi Perricos, a Deloitte technology partner and author of the report, said: “For far too long local government has tended to view IT as a black art that is better performed by external contractors. It is not understood and the result has been failed outsourcing contracts and the growth of disparate IT domains that lack centralised control and adequate governance.”
“That’s not to say the outsourcing of some IT functions can’t work but the days of the monolithic IT outsourcing deal that sees the entire council’s IT capability outsourced to one supplier and managed by a small contracting team, are numbered. Highly commoditised IT functions such as desktop, networks and data centres can be successfully outsourced but local authorities need to take and retain control of technology strategy, including the management of suppliers.”
Taking control of IT is based on Deloitte’s experience of advising a wide range of local authorities on technology strategy and implementation. It finds that many councils should be getting significantly more benefits from technology including improved services for citizens, greater internal efficiencies and an increased capability to work more effectively with multiple agencies.
Deloitte puts the potential savings that can be made by redesigning IT at up to 30% of the total council-wide spend on IT, depending on the length and nature of the programme.
Face the problem, don’t outsource it
The report makes clear that local authorities would be wise to build internal skills to manage IT suppliers and outsourcers from both a commercial and operational perspective. Costi Perricos said: “Many authorities ‘outsource the problem’ which is why we believe that successful outsourcing stories remain rare in local government.”
The organisation of IT needs to be right
Taking control of IT stresses the need for a collaborative approach to addressing IT issues and the need for unification of IT capabilities in the local government context. This will involve more than simply providing a central service on behalf of other departments. It requires senior management to collaborate effectively to get the most out of IT investment, the report says.
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Notes
Taking control of IT can be found here
About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms. Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTT and its member firms.
The information contained in this press release is correct at the time of going to press.
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- Deloitte LLP
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Taking control of IT
Read the full report