Public sector IT outsourcing: a framework for evaluating risk

Abstract

A recent trend has seen the significant growth of governments outsourcing IT projects to private sector partners. However, despite the high risk of failure in public sector IT projects, the literature on outsourcing risks predominately concentrates on the private sector. This exploratory study draws on a framework developed from IT outsourcing risks in the private sector and applies it to the public sector by carrying out a case study on three local governments in Ireland. This study seeks to identify some of the most important risk factors in an outsourcing strategy by taking into account the unique nature of the public sector in analysis. This study highlights the specific difficulties public sector organisations can experience in attempting to gain cost efficiencies from an outsourcing strategy, especially a complex procurement process, difficulties in requirements gathering, costly contract amendments and inflexible employment structures. The approach used by this paper provides a useful