An Bord Snip: Outsourcing and ICT

The light is shining on the findings of An Bord Snip. It’s interesting to see the level of rationalisation in local bodies. The report propose that local bodies such as County Enterprise Boards, Business Innovation Centres in a newer, more streamlined Enterprise Ireland to the tune of 10s of millions of savings. €100m drop in enterprise supports.

It is proposed that the County and City Enterprise Boards, the Business Innovation Centres, the Western Development Commission and the enterprise functions of Údarás na Gaeltachta, Shannon Development, Bord Iascaigh Mhara, LEADER and Teagasc, as well as sector-specific agencies such as the Irish Film Board, should be merged within a re-constituted Enterprise Ireland. The streamlined agency should also lead to major savings in overall administration costs including staff numbers. The Group considers that the new enterprise body should operate a regional office network based upon the nine Gateways identified in the National Spatial Strategy, leading to savings in local office accommodation costs. Savings in overseas office costs would also arise.

What’s even more interesting is the proposal for restructuring the public sector’s own ICT spend in an effort to make savings.

Information and Communications Technology (ICT) represents a particular sub-set of activities for which shared services solutions should be actively explored. Approximately 1,300 staff work in ICT in the civil service at an estimated cost of €65m a year. In addition, the civil service spends just under €200m a year on external ICT resources (consultancies, contractors and external service providers) and on ICT support and maintenance services. Substantial additional costs are incurred on hardware, software, telecommunications and training.

In outline, the Group has identified that greater sharing of ICT facilities and services, commensurate with improvements in the skills and knowledge of ICT staff and recruitment of ICT specialists from the market, can lead to a considerable reduction in the current costs of ICT provision. The Group notes that the Government has instructed a 50% reduction in the use of external ICT resources and the development of plans by each public body to increase their ICT self-sufficiency.

That equates to another drop of €100m. A lot of organic business for Irish SMEs, right?

This at the same time as a recommendation to outsource departmental tasks?

Activities that generally match these criteria typically include payroll, data entry, payments / claims processing, accounts payable and accounts receivable processing; however, the scope of outsourcing can in principle be much broader than this, encompassing every field of activity or business function for which outputs can be specified, and be subject to monitoring as regards quality and delivery. In transferring such operations to an external service provider, the primary focus is on achieving cost savings without loss of quality. The reworking of processes required to transfer to the outsourced operation should also result in better control of standardised processes.

Given the super-sharing of resources and the new spider-web of management structures needed to manage the sharing, are we really getting value for money?

July 16th, 2009 at 2:57 pm • Filed in Business, Geekery, Politics



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