This IDC Perspective explains why and how government executives should distinguish digital transformation (DX) outsourcing from traditional outsourcing. Increasingly, agencies will rely on external service providers to assist in business processes or IT operations. In past decades, this would be called outsourcing, as agencies removed assets, people, and processes to outside vendors and then created a contract to buy the service from the vendors over an extended period. This continues today; however, the emphasis has shifted from outsourcing legacy or traditional services to outsourcing for digital transformation. Many governments are recognizing the importance of DX in improving outcomes and citizen satisfaction, especially regarding customer interactions. At the same time, government agencies are at a disadvantage to compete for DX skills and are learning that their in-house resources are inadequate to deliver the needed transformation.
"This is a new challenge for government outsourcing, and the in-house model will likely evolve to a multisource, multipurpose external provider management framework," says Thom Rubel, adjunct analyst with IDC's IT Executive Programs (IEP). "Contracting and program management now become strategic partners for DX enablement."
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