Outsourcing supports the Government's policy of "big market, small government". Successful outsourcing allows the Government to make use of the free market to provide better services; and allows the civil service to focus on the policy, regulatory and statutory service delivery functions that must be performed by civil servants. The productivity gains and efficiency savings arising from outsourcing benefit both the government and the public.

Typical outsourcing objectives in government include:

• to improve existing services and meet increasing demands and new service requirements;
• to attain better cost effectiveness and efficiency;
• to increase flexibility to respond to fluctuating demands;
• to contain growth in the civil service; and
• to gain access to new skills and technology in the market place.

Critical Success Factors

To make outsourcing successful, departments should -

• set clear objectives;
• define precisely the outsourcing scope and required service levels;
• devote adequate attention, time and resources in preparing, managing and monitoring the contract;
• develop appropriate selection criteria and a marking scheme for selecting the right service provider;
• communicate effectively with in-house staff to get their support;
• plan and manage transitions from one service provider to another;
• develop relevant measurable indicators for performance reporting and monitoring; and
• communicate effectively with the service provider.