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Building together: Is co-sourcing the answer to meet the digital skills demanded for the public sector?

At a time when the digital skills gap feels like it’s growing ever wider, the public sector must refrain from being ideological about the way services are delivered and focus on what matters most: the quality of services for end users.

We shouldn’t think about this question as either/or: instead, like our name and our corporate philosophy, we should consider how internal AND external capabilities can complement and support each other to deliver services to UK citizens. In other words, co-sourcing might well be the answer to the challenges posed by the public sector digital skills gap.

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The outsourcing years: What was given away?

Over the last 40 years, the UK government has driven to open up public services to private sector providers. During this time many departments have outsourced their application and infrastructure operations to suppliers transferring the responsibility to suppliers to keep the lights on 24/7. Proponents would argue this has delivered benefits in cost and efficiency and driven new thinking while allowing agencies to focus on core service delivery.

However, there have also been occasions where delivery has been poor, where costs appear to spiral or where agencies end up locked into suppliers making it hard to change. At the same time the reliance on others means that sometimes the public sector has failed to prepare existing in-house teams for future technological changes.

Multi-service outsourcing 

In the noughties, it became fashionable to move to multi-service outsourcing. The thinking here was that creating smaller markets around specific services or sectors would drive competition and help cut costs (or ‘drive efficiencies’).

However, in many cases this created further complexity in public services. While it was intended to cut costs, it has necessitated additional overheads in public service organisations to simply manage the diversity and range of suppliers.

Long outsourcing contracts have stripped departments of control and autonomy. They are dependent on private providers and if the aim was to outsource risk to external services, in many cases the liability ultimately lands on the public sector partner. With funding cutbacks also taking their toll, it feels absurd to talk about the public sector driving innovation when much of the knowledge needed exists elsewhere.

However, this doesn’t mean that outsourcing should be discounted. It continues to have its place - helping to solve a specific problem or to embed ways of working at speed.

What about insourcing: Is this the answer to all problems?

As with fashion, trends change. After decades of opening up government to the private sector, there is now increasing interest in bringing services back into public sector control, with ambitious plans to recruit and build digital talent in departments. The reasons are obvious: in-house capabilities should give public services more control, more flexibility, and greater independence and technology trends have helped enable this with a move away from monolithic custom built solutions.

However, it’s not necessarily a silver bullet. In-house resources, when you can recruit them, can be expensive. Keeping things internal can also sometimes create its own form of inflexibility and creates new challenges around keeping skills up to date. When trying to drive through major projects, for example, keeping everything in-house can make it all too easy to lose focus. This inevitably harms delivery.

The lessons of extensive insourcing are actually strikingly similar to those of extensive outsourcing. If you go all-in on one or the other you can easily lose control of costs and find it difficult to adapt when necessary and things change.

One reason departments may resist in-sourcing isn’t necessarily costs, but more around skills. With the digital skills gap impacting all industries, the public sector is hit particularly hard. Lack of funding and broader pay banding agreements often makes it impossible to compete with other organisations to attract talent particularly in high demand areas such as data. Also the sector’s - very unfair - reputation for being sluggish may prevent talent from considering a career in the public sector to be an option.

Co-sourcing: the benefits of building together

It's our view that getting suppliers and public sector IT professionals working together, what we call co-sourcing, can help meet the challenge of having the right skills and capabilities to help the public sector successfully deliver digital products and services.

Co-sourcing can help in a number of different ways. In the first instance, co-sourcing can expose in-house teams to new skills and new ways of working. We often talk about mindset shifts when discussing digital transformation, but it’s also about liberating your existing team and giving them the opportunity to evolve and be ambitious. Bringing in those with expertise in agile working helps reduce risk of the public sector embracing these ways of working and gives confidence to the team to try new things. At AND we have a team of Agile coaches who work with our clients, at no cost, to help them adopt new ways of working as a core part of our work and supporting clients adopt this methodology.

In addition, co-sourcing offers a level of flexibility that gives public sector organisations the opportunity to adapt and evolve their skill and resource mix according to the specific needs of individual projects. Rather than being hamstrung by the limitations of internal resources and capabilities, and the rigidity of long-term external contracts, departments can be both more strategic and tactical. The ability to evolve to meet the needs of immediate goals makes it easier to maintain a compelling long term vision.

The impact of working together will strengthen the public sector’s reputation in the tech and digital industries, particularly where suppliers and partners take an active role in training and upskilling both their own staff and public sector staff. At AND we seek to agree learning objectives for our joint teams at the start of each project and then put in place training and skills development activity as part of the core work so at the end we’ve not only delivered the work, but made a real impact on increasing our client’s skills for the long term.

It’s time to move away from viewing the in-sourcing and out-sourcing debate as binary. Instead, we need to embrace a more collaborative way of working that allows departments to be flexible and work towards their goals and objectives. Co-sourcing and building together provides immediate flexibility, with long term cultural change and skills development. Getting this right can make the public sector more innovative and agile, and allow departments to deliver a world class service for citizens and fulfilling roles for their staff, developing a reputation for using digital in a way that’s responsible and impactful - that’s good news for future talent, and it’s good news for the country as a whole.

Sarah Horner is a managing consultant for AND Digital, helping organisations create efficiencies and develop innovative solutions.

Talk to us about working together to build incredible digital products for the public sector. Contact us.