This part examines how the Department maintains and develops the skills needed to maintain an independent perspective of its partnership with EDS.
3.1 The effective operation of the partnership requires skilled people. To achieve value for money the Department must have enough staff with the skills to manage the contract and to commission new work effectively.
3.2 When an organisation decides to outsource a service previously provided in-house, it will normally surrender a significant level of internal expertise to the service provider. If it does not do so, the outsourcing is unlikely to be fully effective. However, the amount and type of expertise surrendered, and the balance between what is surrendered and what is retained, can have a direct impact on its ability to:
■ shape and define its strategy and specify future requirements;
■ avoid becoming "locked-in" to the service provider, making effective re-tendering difficult;
■ control service provision; and to
■ determine the suitability and value for money of the service being delivered.
3.3 The Department recognised when it entered the partnership with EDS that to manage and control the relationship and secure high quality service delivery, it would need to retain or develop the skills to:
■ develop its overall information systems strategy and to participate fully in developing the information technology strategy;
■ assist business unit managers in specifying requirements;
■ assess the technical and commercial aspects of EDS proposals;
■ monitor and evaluate service delivery; and to
■ manage the contract.
Most of these skills already existed in the Information Technology Office, or elsewhere in the Department, with the exception of those associated with contract management, which largely had to be developed or acquired.
3.4 This part of the report examines the steps the Department's Business and Management Services Division has taken to secure the skills required to evaluate and manage new work.