Sometimes outsourcing works, sometimes it doesn't. Highlighting a few examples in which it has failed does not lead to the conclusion that it never works.
So the author seeks to bridge the gap by identifying a fundamental flaw in the concept of outsourcing, in this case by noting the divergence of objectives between the two parties. Although true, this isn't the fundamental flaw the author is looking for. It simply identifies the importance, for outsourcers, of making their suppliers' objectives coincide with their own.
I wouldn't say the G4S case is one in which the government has failed in making objectives coincide. G4S will, in all probability, be found in breach of contract for failure to fulfil their obligations, and the government have already stated they will be seeking to recover costs from G4S, such that there will be no additional cost to the taxpayer for this debacle.
Outsourcing is seen as a panacea because it is believed you can offload worrying about the details. All too often this means the outsourcing process itself is handed over to people who don't (or don't want to) know the details. Hence we get fiascos like this.
The result is we are likely to have an Olympics with an overt military presence. Still this should make a lot of overseas visitors feel at home.
Oh, and the New Statesman is explicitly left wing in its politics, I guess for many Americans this may be the first time they have been exposed to left wing opinions as distinct from the Republican Party definition of left wing which seems to be "less right wing than I am".
> Outsourcing is seen as a panacea because it is believed you can offload worrying about the details. All too often this means the outsourcing process itself is handed over to people who don't (or don't want to) know the details. Hence we get fiascos like this.
You're absolutely correct, but it does not follow from instances such as this that outsourcing is itself the root of all evil, as this author would have us believe.
Furthermore, the case in question is hardly an example of poorly managed outsourcing. G4S were, by all accounts, the most suitable firm for the Olympics security contract. That said, it is a largely unprecedented event, and not unsurprisingly they underestimated the task, and couldn't get enough staff trained in time.
Taxpayers don't stand to lose out as a result of this. G4S are to blame, and G4S will have to eat the cost of sorting the matter out; taking a loss of up to £50m on the contract, it has been reported.
> The result is we are likely to have an Olympics with an overt military presence. Still this should make a lot of overseas visitors feel at home.
13,500 military personnel were already scheduled to provide security for the Olympics, and the government has only committed an additional 3,500 in response to the G4S revelations.
> Furthermore, the case in question is hardly an example of poorly managed outsourcing. G4S were, by all accounts, the most suitable firm for the Olympics security contract. That said, it is a largely unprecedented event, and not unsurprisingly they underestimated the task, and couldn't get enough staff trained in time.
Yes, it's not as though this event happens every 4 years...
In fact, G4S managed to spectacularly mess up the security of the recent Jubilee celebrations, as was widely reported. When you add that to the utter mismanagement or the (despicable) asylum detention centres, and on and on... they're as qualified to provide services in the same way Capita are qualified to provide IT consultancy.
But on the poorly managed part, Teresa May claimed the contract was routinely monitored. and yet this is still a surprise to her, 3 weeks from the start of the event!
Recovering costs from G4S will only make G4S recover the recovered costs from other areas of their business, so I expect we will see more escaped prisoners and more security lapses at nuclear facilities, etc.
Besides, the firm will have contractual obligations in other areas of the business (e.g. prisoner transportation and security at nuclear facilities), and if it reneges on those, it will face similar consequences.
Which could eventually lead to bankruptcy and still stick the taxpayer with the bill and poor service provision.
In any case I agree with your OP that these types of cut and dry presentations are never helpful, and we should be seeking to understand the appropriate context for different solutions instead of generalising.
> Which could eventually lead to bankruptcy and still stick the taxpayer with the bill and poor service provision.
Precisely. Thus G4S have a clear incentive not to let their standards slip elsewhere in the business and face further damage to their finances, or for that matter their reputation.
G4S is a massive multinational with ~£7.5bn annual revenue. They're not going to spiral into bankruptcy over this Olympics debacle.
Comments
Sometimes outsourcing works, sometimes it doesn't. Highlighting a few examples in which it has failed does not lead to the conclusion that it never works.
So the author seeks to bridge the gap by identifying a fundamental flaw in the concept of outsourcing, in this case by noting the divergence of objectives between the two parties. Although true, this isn't the fundamental flaw the author is looking for. It simply identifies the importance, for outsourcers, of making their suppliers' objectives coincide with their own.
I wouldn't say the G4S case is one in which the government has failed in making objectives coincide. G4S will, in all probability, be found in breach of contract for failure to fulfil their obligations, and the government have already stated they will be seeking to recover costs from G4S, such that there will be no additional cost to the taxpayer for this debacle.
Outsourcing is seen as a panacea because it is believed you can offload worrying about the details. All too often this means the outsourcing process itself is handed over to people who don't (or don't want to) know the details. Hence we get fiascos like this.
The result is we are likely to have an Olympics with an overt military presence. Still this should make a lot of overseas visitors feel at home.
Oh, and the New Statesman is explicitly left wing in its politics, I guess for many Americans this may be the first time they have been exposed to left wing opinions as distinct from the Republican Party definition of left wing which seems to be "less right wing than I am".
> Outsourcing is seen as a panacea because it is believed you can offload worrying about the details. All too often this means the outsourcing process itself is handed over to people who don't (or don't want to) know the details. Hence we get fiascos like this.
You're absolutely correct, but it does not follow from instances such as this that outsourcing is itself the root of all evil, as this author would have us believe.
Furthermore, the case in question is hardly an example of poorly managed outsourcing. G4S were, by all accounts, the most suitable firm for the Olympics security contract. That said, it is a largely unprecedented event, and not unsurprisingly they underestimated the task, and couldn't get enough staff trained in time.
Taxpayers don't stand to lose out as a result of this. G4S are to blame, and G4S will have to eat the cost of sorting the matter out; taking a loss of up to £50m on the contract, it has been reported.
> The result is we are likely to have an Olympics with an overt military presence. Still this should make a lot of overseas visitors feel at home.
13,500 military personnel were already scheduled to provide security for the Olympics, and the government has only committed an additional 3,500 in response to the G4S revelations.
> Furthermore, the case in question is hardly an example of poorly managed outsourcing. G4S were, by all accounts, the most suitable firm for the Olympics security contract. That said, it is a largely unprecedented event, and not unsurprisingly they underestimated the task, and couldn't get enough staff trained in time.
Yes, it's not as though this event happens every 4 years...
In fact, G4S managed to spectacularly mess up the security of the recent Jubilee celebrations, as was widely reported. When you add that to the utter mismanagement or the (despicable) asylum detention centres, and on and on... they're as qualified to provide services in the same way Capita are qualified to provide IT consultancy.
But on the poorly managed part, Teresa May claimed the contract was routinely monitored. and yet this is still a surprise to her, 3 weeks from the start of the event!
Recovering costs from G4S will only make G4S recover the recovered costs from other areas of their business, so I expect we will see more escaped prisoners and more security lapses at nuclear facilities, etc.
G4S isn't a non-profit.
Besides, the firm will have contractual obligations in other areas of the business (e.g. prisoner transportation and security at nuclear facilities), and if it reneges on those, it will face similar consequences.
Which could eventually lead to bankruptcy and still stick the taxpayer with the bill and poor service provision.
In any case I agree with your OP that these types of cut and dry presentations are never helpful, and we should be seeking to understand the appropriate context for different solutions instead of generalising.
> Which could eventually lead to bankruptcy and still stick the taxpayer with the bill and poor service provision.
Precisely. Thus G4S have a clear incentive not to let their standards slip elsewhere in the business and face further damage to their finances, or for that matter their reputation.
G4S is a massive multinational with ~£7.5bn annual revenue. They're not going to spiral into bankruptcy over this Olympics debacle.
or for that matter their reputation.
That they still have a reputation worth defending is fairly surprising given their history.