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' reference.

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 yourself?

¡DWould other companies / departments / units hire you to do it for them?

¡DWill tomorrow's CEO / Director come from here?

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 providers;

¡Dabsence of communication and change management plan;

¡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.



1 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.


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