Following the failure of G4S to supply the requisite number of security guards for the London 2012 Olympic Games, it seemed a short leap to blame the shambles on the that fact that the contract was outsourced rather than handled in-house. Defence secretary Philip Hammond then added fuel to the anti-outsourcing fire, saying that his preconceptions of public versus private sectors had been challenged as the armed forces, the police and local authorities rose to the occasion.
In fact, the immediate lesson should have been that all business relationships, whatever ‘sector’ they fall in to, are dependent on successful management of a contract by all of those involved. The relationship is built on working together, drawing on the strengths of both parties.
At its best, outsourcing gives the client excellent service at a mutually beneficial cost. The key is to put robust governance procedures in place from the word go. This means making sure that all of those involved have the same aims and are looking for the same outcomes. It is also vital to ensure the on-going relationship is strengthened by regular reviews of the process, enabling any problems to be nipped neatly in the bud long before they escalate into the large scale reputational issues that can damage both sides.
Crucially. with G4S, it was not until a month before the opening ceremony that the security company finally admitted there was a problem. If staffing shortages had been picked up on sooner, disaster could have been averted.
But it is a sweeping and misconceived generalisation to assume that private sector companies involved in public sector contracts must always be the villains of the piece, especially without any examination of the facts. Mistakes happen in companies, organisations and workplaces, whether or not they are public sector or private sector.
Similarly, it is easy to make negative assumptions about the efficiency of public sector organisations, particularly as the rhetoric over austerity measures has made government spending an on-going focus. While occasionally problems are exposed, many more are quietly and professionally resolved between the two contracting parties.
One contract failure does not mean outsourcing as a strategy is flawed. To draw that conclusion is simplistic in the extreme. What is true, however, is that the private sector needs to work in partnership and in tandem with the public sector. This requires excellent, on-going management of the contract from start to finish and, crucially, mutual respect and trust on both sides.
Matt Sims is executive vice president of business development at contact centres provider Teleperformance, one of the UK's largest outsourcing companies