TCS is keen to contribute to the topic of successful partnerships between the public and private sectors. We have developed some significant partnerships with government now and with the benefit of five years of working within those partnerships, we can impart some hopefully valuable insights.
It is in the best interests of both government and industry for this topic to be advanced, so that measures can be put in place that improve partnerships, enabling confidence to improve and public-private partnering to move forward in a more positive manner.
Why would suppliers like TCS enter into partnerships with government in the first place, beyond the desire to create long-term revenue streams and the profitability attached? We understand that there needs to be a high level of accountability and traceability in dealing with public money. Government needs to answer questions as to why it’s spending public money and is it spending wisely, which generates an additional overhead for the private sector in managing these contracts effectively. Therefore, it was not an easy decision for TCS to enter into this market because the overheads of running a public sector business, from a management and ultimately a cost perspective, are higher than the private sector.
The question was where can we create the most value within that market in terms of collaboration? This brings you to question: what does public service reform mean? Is it just the same services but at a cheaper price? If that was the answer we would not have entered into this market.
We understand the imperative to reduce cost of public services, but private sector doesn’t have a magic wand to enable it to do things in precisely the same way as they’re currently being done and reduce the price.
Our real interest is in how can we transform those services such that they are lower cost but actually, they’re also better from the perspective of the end user, predominantly the citizen? We are an IT and business process outsourcing company, our aim is to use of technology and process optimisation to transform public services in a way that lowers cost and improves user experience.
Typically, we’re seeking to improve accessibility, flexibility and speed of delivery through our services and applying our core skills. We are willing to enter into partnerships with government whereby we can bring to bear those skills, so that government and ultimately the taxpayer benefit and so that we can make a profit. We are a profit-earning organisation, and there isn’t any problem in that at all ideologically. People understand that the private sector does need to make a profit in order for the economy to function.
When we partner with government, we look to the government to provide domain expertise of whatever that public service is, by providing us with access to people that really understand how these services run, what the pitfalls are with them currently, how they could potentially be improved.
Sometimes there is this belief that the private sector has all the answers in isolation of the public sector, and that is simply not the case. We look for a collaboration whereby the civil service bring intrinsic knowledge of public services, and we apply IT and business process optimisation to improve those services. There is often a need for joint collaboration, as opposed to outsourcing something lock, stock and barrel.
Successful partnerships require absolute clarity about what the partnership, or collaboration, is there to achieve. What objectives is it going to meet? How will they be measured? Ultimately, was it a good use of taxpayers’ money?
Both the public and private sector committing the right resources to the partnership is equally important, not just the quantity, but actually the right skills and quality within those resources. Continuity of those resources and the development of effective relationships between the public and private sector are also important in making partnerships work effectively. When we compare our private sector client base to our public sector client base, we probably see a richer set of skills facing off to us in the private sector and more continuity. The skills deficit we see in the public sector would be in commercial management and, whilst we’re not looking for technical skills to mirror our own people, we are looking for some level of technical awareness, so that we can engage in a meaningful way about solutions we’re proposing and why we’re proposing to do things in a certain way.
Disaggregating big contracts and having multiple suppliers, is an approach we endorse, which we see in the private sector a lot. Our private sector clients would not have their business dependent on a single supplier. They would normally have multiple suppliers who are amongst the best at what they do in certain service areas. In a multi-supplier model, the skills you need are in service integration because you can’t expect suppliers to self-govern in that model.
We have not seen the service integration skills within the public sector that we have seen within the private sector to make that kind of model successful. Whilst the intent and rationale of government to move in that direction are very right, there is also need for skills to make it work.
Accountability needs to exist, both at an organisational level and at an individual level, as well as absolute clarity about who is accountable for what, how things are escalated within either the public or private sector partner and who ultimately makes the decisions. In all of our contracts issues have arisen. Issues may arise within our organisation, or they may arise within the customer’s organisation, or they may be totally outside of anybody’s control. In the contracts that have worked well, there has been willingness to collaboratively sort problems out, rather than drawing a hard line and passing the problem to the other party. You need to fix it, so a willingness to work collaboratively is essential.
We firmly believe that to answer some of the problems the government has around reducing costs, whilst also meeting rising expectations of citizens in public services, particularly when compared to their interactions with the private sector, there is a key role for the private sector to play. However, there are some key conditions, as outlined, which need to be created in order for any such collaborations to be successful.
In January TCS and Reform hosted a round table debate on this topic, with participants including the National Audit Office's Keith Davis and Richard Bacon MP. To download an edited transcript of the debate click here.