Statens IT og sourcing

Margit Sasady & Søren Brørup

Student thesis: Master thesis

Abstract

This thesis is called Sourcing in the Agency for Governmental IT Services (Statens It & sourcing). It is an analysis of the Agency’s sourcing options, using a framework for sourcing decisions developed by Leslie Willcocks, David Feeny and Gerd Islei (Willcocks, et al., 1997). The defined problem is as follows: What recommendations can be given in relation to potential sourcing solutions for the Agency for Governmental IT Services? The Agency for Governmental IT Services is the result of a merger in 2010, where six IT-departments covering eight ministries and their related institutions where brought together with a joint budget of approximately 400 million DKK. The motivation for this merger was to reduce the recruitment challenge and to achieve significant efficiency gains. The framework used to analyze the problem defines sourcing options by purchasing style and purchasing focus and recommends the use of multiple perspectives to make an informed decision: Business considerations, Economic issues and Technical considerations. We have supplemented the framework with a model from Infosys about sourcing maturity. The empirical foundation consists of eight interviews and assorted relevant articles and publications. The interviews are the primary source of information and represent the Agency for Governmental IT Services, professional experts, IT vendors and the Ministry of Finance. We focused on four functions in the analysis: Infrastructure, Service and Support, Application Operation and Vendor Management. We found that the framework is suitable for this kind of analysis if the context of the case is taken into account. External factors and the aspect of time must however be included in the assessments. The factors in this case cover large it-vendors, their capacities and demand, legal issues e.g. public provisions, the political arena, governance structures and business case in which the agency are subject to. The time aspect is significant due to an impending expansion. The agency has no strategy for sourcing and our conclusion is that the agency is at great risk of losing potential benefits until a strategy is implemented, because of their ineffective use of resources. The sourcing maturity as well as the general technological maturity is primarily in the low end, why we recommend lifting the maturity and firstly focus on areas to be outsourced in order to ensure durable contracts, which according to our analysis are Infrastructure and Application Operations, the latter one by use of a preferred contractor to mediate risk. Vendor management should be kept in-house and Service and Support should be in-sourced with the use of a preferred supplier. As a final point the Agency for Governmental IT Services must rethink sourcing and actively use it as a tool to obtain efficiency gains and at the same time respect its mission and related political goals.

EducationsMSc in Business Administration and Information Systems, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2011
Number of pages118