Benefits for Public Sector
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Situation
The public administration is a crucial factor in the field of international competition. Because of the social, technological and demographic change, the administration has to pursue constant advancement and innovation. Therefore, the modernization of country and administration as well as the dismantling of redundant bureaucracy are of great importance. Public tasks have to be service-oriented, efficiently and of high quality. Citizens and commercial companies have a very much higher expectation to the quality of service by the public administration. Lower incomes from taxes led over years to a very high cost pressure, while having less human resources at the same. The internal structure has changed, while fewer employees at the public administration have to handle more tasks.
The public sector faces structural changes above all in the field of using modern information technologies. The public administrations invested 16.6 billion € in high technology (source: Bitkom federation, Germany). In the comparison to the previous year, that is an increase of 4 percent. For the year 2007, a rise of 3 percent to be at 17.1 billion € is expected. The country, state and cities have the strongest demand in information management services like consulting, and outsourcing of information management systems. Therefore, information technology is important. Since March 2004, the police received more than 60000 complaints in 10 to 16 states by internet-based services. Despite of this first success, offices in Germany have still pent-up demand. This is also according to a study by the European Commission regarding the internet activities of the public sector in 2006. In comparison to all 15 European Core Countries, Germany was at the 13th place and could only leave Greece and Luxembourg behind.
A main example for the structural changes in the public administration is the so-called e-government. In the context of the e-government initiative of the Federal Government citizens and commercial companies are to be included into the administrative acting by the consistent use of modern information and communication. On the other hand, administrative expirations have to be more efficiently. Due to the intensive use of modern information management, the citizens and the commercial companies shall be comprised more in the work of the administration. On the other hand, the process of the public sector shall be arranged more efficiently. This needs an intensive use of information technology in the public administration. The internet becomes the important communication way between citizens, commercial companies and administration.
The technological progress for example by internet allows new communication and interaction ways for administrations, particularly between citizens and public sector. This is of crucial importance for the European Union with their 453 million citizens in 27 member states (tendency rising). To spend less on time is more and more important for the citizens. At the same time, many tasks guided by a specific process are simplified and automated in the public administrations by these new technical possibilities. In addition, the transparency of the public administration shall be increased, as single working steps or information flow become better recognizable for the citizens. Furthermore, this increased transparency of the process shall serve the prevention of corruption, since the citizens can monitor administrative procedures easily. Information is more easily accessible to the citizen. The process of the political decisions is supported and more intensive participation possible, e.g. for on-line elections. By the European-wide availability of information and services, the strengthening of the European Union shall be enabled.
One of the advantages is that administrations, citizens and commercial companies can spend less on time and costs. Germany assumes by the implementation of the initiative “BundOnline 2005” annual cost savings of approximately 400 million € with a total investment volume of 1.65 billion €.
These structural changes in the public sector, described here, are only possible by extensive investments. The budget for example in the procurement area of the public sector rose therefore strongly. Annually, the member states of the European Union spend approximately 720 billion € on goods and services. Additional opportunities for the commercial companies result in forming a lastingly relationship as contractor. Therefore, the term B2G is established: Business to Government.
By the increasing competition between companies, many companies cannot afford it any longer to do without public orders. For the public clients it is usually difficult to rate transparency and reliability of the contractor or vendor as well as to evaluate the real equivalent value of an investment.
The times being ‘purveyour of the court’ are past, the public clients in Germany have to consider an extensive and complicated set of rules for their procurement - the so-called assignment law (“Vergaberecht”). The assignment law ensures that the individual procuring party orders not according to personal reasons, but to objective criteria. Beyond that the waste or uncontrolled use of taxes for different political purposes shall be prevented. The public client has therefore to determine in a transparent procedure, in which all contractors are treated equal, the contractor with the best price performance.
In order to reduce the rising cost pressure, more and more public administrations consider to outsource tasks by e.g. privatization. If a non-profitable task is transferred to a private contractor, the costs of the performance are to be paid by the public and a deficit must be considered in the budget.
(The public sector can select different organization forms for providing benefits to the citizens. The public sector in Germany can choose on the one hand publicly legal organization forms, like the “Regiebetrieb”, the “Eigenbetrieb” and the “Eigengesellschaft”, and on the other hand such with private participation, like the “Betriebsführungsmodell, the Betreibermodell and the Kooperationsmodell“. The last models represent a mix of the possible legal form of the public and the civil area. As a last alternative the public sector can also establish a commercial company e.g. GmbH in the context of the private right to provide benefits for the citizens.) The public sector in Germany can select different organization forms, like publicly legal organization forms, such with private participation or establish a commercial company to provide benefits to the citizens.
The public sector is relieved by the privatization of information technology departments of the administration. There is less on motivation for analyzing the internal business processes, to accomplish restructuring and implement a more efficient task fulfilment. A process orientation is necessary and the transparency of the process. Above all projects that are private-economically organized can be accomplished, mostly faster and with a more cost-oriented pricing and thus more efficiently, since among other things time-consuming advertisements are void for the procurement of e.g. software. During a task fulfilment by the public sector the involved ones often have less of motivation to optimize the processes or to assign resources optimally. Processes that had been established, prior to the possibility of the support by newest information technology, have to be reorganized by the use of the newest methods and models considering all factors in order to realize additional opportunities of the public sector.
Nevertheless, it remains a task of the public administration to ensure and supervise the execution after the privatization. This can be achieved most efficiently by the support of suitable software. Accurate numbers and messages can be called up in real time and evaluated without large effort. In addition, the introduction and/or the application of a suitable platform are very important.
For the exact evaluation of the real equivalent value both clients and contractors need suitable tools and process cycles, because especially in the range of software projects obviously the minimum price is not always the best choice.
The innovation cycles in the information technology area are continuously shortened. Often it is very difficulty to keep the employees on the current knowledge by training courses and the enormous effort on capital assets for infrastructure and software. One concept to handle this problem is the assignment of a business innovation/ transformation partner (BITP). A BITP usually offers the complete range from information management consultation to information management process structuring as a service.
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