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CONCLUSIONS

Results of the agency survey show that agencies are continuing to outsource corporate services and functions, particularly ICT services. During 2003—04, 47% of agencies reported finalising a new ICT outsourcing contract or contract extension, up from 29% of agencies in 2002—03.

The positive story that emerged in last year’s report about the effectiveness of outsourced HR services continued this year, with a similar response regarding improvements in service quality and an even more positive result on value for money. APS agencies are also expressing a more positive view of outsourced ICT services, particularly in regard to the access to ICT skills and the breadth of ICT services outsourced service providers can deliver to agencies.

Consistent with last year’s report, it is evident that in some agencies there is still insufficient capability to manage outsourcing effectively. Contract management capability was reported as a difficulty by over one-third of relevant agencies–with large agencies much more likely to have reported it as a difficulty compared to medium and small agencies–and yet of these agencies less than one-third reported having used contract management training as a means of improving capability. While training is only one of the means of addressing such a problem it appears that some agencies could be investing more in training as a means of maintaining the required level of skilled contract managers they need to support and drive their outsourcing arrangements.