The Civil Service Training and Development
Institute (CSTDI) has organized a series of activities including workshops
and seminars in support of the EPP. A recent seminar on the Disciplines
of Outsourcing in the Government Sector was conducted by Mr Sidney Yuen,
the founding director of Hong Kong Benchmarking Clearinghouse. This
article summarises some of the points discussed at the seminar for colleagues'
Outsourcing is a tool for change. It
demands new management systems and new leadership skills. To start with,
officers at management level should re-think whether certain functions
are "inherently governmental" and could only be effectively
performed by civil servants. They should review the business activities
by asking themselves the following three questions1:
¡DIf starting today, would you do it
¡DWould other companies / departments
/ units hire you to do it for them?
¡DWill tomorrow's CEO / Director come
If the answers to the three questions
are "yes", such business activities would most likely be the
core competencies, which are governmental in nature.
This exercise is the fundamental re-examination
and redefinition of a department's operation around its core competencies.
It is a preliminary but important step for implementation of strategic
outsourcing which involves long-term, results-oriented relationships
with specialized service providers.
Successful outsourcing initiatives
should help in realizing financial benefits, customer/end-user satisfaction,
and process improvements. However, outsourcing arrangements could fail
due to some common pitfalls such as:
¡Dlack of experience in managing service
¡Dabsence of communication and change
¡Dpoorly negotiated contracts and service
level agreements; and
¡Dline managers don't let go.
To this end, different levels in the
organization should assume different responsibilities in the process
of outsourcing. At the very top, executives should monitor the health
of the relationship with the service provider, review strategic plans,
and resolve major issues. At the management level, a committee could
be set up to review and approve key contract deliverables and changes,
review functional and operational plans, approve new service levels
and new customer requirements, and resolve issues. All day-to-day management
and operational activities should be dealt with at the operational level.
They are cited from the "Three Question Test", which was
developed by Mr. Michael Corbett, the Chairman and Executive Director
of the Outsourcing Research Council, USA.