The
public sector is under tight budget constraints, and there are pressures to
find new cost effective and innovative ways to deliver services. As a result,
private and third sector involvement in delivering public services is expected
to grow and move into new areas, especially as the coalition government has
openly stated its commitment to using markets, choice and competition to drive
public service reform.
The
outsourcing market will become increasingly diverse. The ICT-only outsourcing
market is mature, and the focus will shift from back office infrastructure
programmes to frontline service delivery, increasing the range of potential
suppliers to government. The changing public service landscape will give rise
to a new set of opportunities and threats to ICT suppliers. On the positive
side, there are areas of growth for suppliers to target which, given the
current spending constraints, is valuable. However, it also intensifies the
competitive landscape as public service delivery specialists are moving into
the market space that ICT service providers would prefer to occupy. The purpose
of this report is to evaluate the current size of outsourcing opportunities,
key drivers and suppliers, and provide a five year outlook on the future
direction of travel.
Introduction
and Landscape
Kable’s
2011 BPO report highlights key contract wins and changes throughout the year.
It also highlights the big players in each public sector vertical.
Key
Features and Benefits
The
focus of this report is on outsourcing opportunities that include a significant
ICT element. These range from the traditional outsourcing or management of the
ICT infrastructure, where technology is at the core of the contract, to BPO
agreements, where those processes require a significant investment in ICT to
support delivery.
Naturally,
there are a large number of support services, such as facilities management,
that do not involve a significant ICT element. These types of outsources fall
outside of the scope of this report, but are included within Kable’s wider UK
Public Sector Outsourcing – The Big Picture publication, which looks beyond
the use of ICT in the UK public sector to examine the broad range of services
that are commissioned by public sector bodies.
For the purpose of this report, we regard outsourcing as including the following:
-
ICT-intensive BPO: the transfer of a public sector business process and
function to the private sector, often involving the transfer of people and/or
assets, and using ICT to support delivery;
-
ICT outsourcing: the transfer of the ICT function from the public to the
private sector, often involving the transfer of people and/or assets;
-
Communications outsourcing: the transfer of the voice and/or data
communications infrastructure from the private to the public sector;
-
Managed service: the private sector is contracted to manage part of a service
on behalf of the public sector, for example application hosting, web hosting
and desktop management.
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Key
Market Issues
-
Gain insight into the public sector ICT BPO market in the UK.
-
Gain knowledge on the developments in the UK ICT BPO market over a five year
period to 2015.
-
Provides you forecasts for ICT BPO spending split by vertical.
-
Highlights key contract wins and changes.
-
Highlights the big players in each public sector vertical.
Key
Highlights
Growth
in outsourcing is expected to return as the government’s reform agenda takes
hold, and rhetoric around greater private sector involvement in the delivery of
public services becomes a reality. However, the type, pace and degree of change
varies between sectors, and this will shape the level of outsourcing
opportunities going forward.
Suppliers
that have built up a strong position from traditional growth markets will need
to re-assess their strategies and focus. The coalition has made it clear that
it does not view ‘big bang’ transformation programmes as the best approach to
leveraging ICT to achieving its objectives; and competitive dynamics will
change as the emphasis shifts from traditional ICT outsourcing to the
purchasing of end-to-end business processes to support the delivery of public
services.
