-
(i)
- Why Outsource?
-
102.
- Outsourcing of non-core activities can yield significant benefits over time. The key to successful outsourcing is to have a framework in place to monitor service delivery on an ongoing basis ie. to ensure that the organisation is getting the best deal and the best quality.
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103.
- The principal benefits from outsourcing are:
-
(i)
- lower cost, deriving in part from the economies of scale achieved by the outsourcer
-
(ii)
- higher quality, arising from the higher skills possessed by the outsource, and
-
(iii)
- mitigation of risk, because the outsourcers commercial viability is at stake and they will wear the cost of time overruns or budget blowouts.
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104.
- There are costs involved in outsourcing, principally in terms of staff required to specify the contractual requirements and to monitor outcomes. These will, to some extent, offset the money saved.
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105.
- A range of non-core support servicing currently performed by the New Zealand Police have been assessed for outsourcing against explicit criteria. The criteria are:
-
(i)
- whether coercive powers are involved in delivering the service
-
(ii)
- the impact of the service on core Police capability
-
(iii)
- the strategic alignment of the service to core business
-
(iv)
- the ability to manage contract failure: is the service readily retrievable in these circumstances
-
(v)
- the synergy with the services currently provided by potential outsourcers
-
(vi)
- the reliability of potential outsourcers
-
(vii)
- the ability to change, ie. to separate management systems, to resolve accommodation issues, to continue to secure internal cooperation, to easily manage the transition, and to contain the cost of change (including redundancy).
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106.
- The services scoped have, on the basis of these criteria, being categorised according to likely time frames for completion, and an estimate of the potential net benefits of outsourcing made. The lack of available information concerning these services has constrained the analysis, and the expected net benefits are indicative only at this stage.
-
(ii)
- New Zealand Police Services That Should be Considered for Outsourcing
Completion within 6 Months
|
Service
|
Estimated Benefits $mill
|
Property Ownership/Management (not rationalisation)
Cafeteria
Video Unit
Fleet ownership/management
Payroll
Equipment receive stores
Equip - stores and supply (not including optimisation of purchases)
Management review and audit
Accounting services
|
|
TOTAL
|
5.55
|
Completion in 12-18 months
|
Service
|
Estimated Benefits $mill
|
Welfare
Photography
Prisoner escort
Document serving
Lost & Found Property
Search & Rescue
Prisoner custody
Infringement processing
Provide Speed Camera Operation
Scene Guard
|
|
TOTAL
|
13.2
|
Possible Completion within 2-3 years, pending resolution of strategic issues
|
Service
|
$mill
|
IT development (additional)
Communications Centres
Provide Commercial Vehicle Investigation
|
|
TOTAL
|
5.00
|
-
107.
- A number of other services warrant analysis to determine suitability for outsources. At this stage, there is insufficient information upon which to base any judgement about the benefits of outsourcing. These services could include matters such as recruitment, passport enquiries and travel arrangements.
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