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The Government has adopted a vigorous approach to information technology (IT) outsourcing as part of its e-government strategy, the Deputy Director of Information Technology Services, Mr Stephen Mak Hung-sung, said today (July 7).

Opening the Information Technology Professional Services Arrangement (ITPSA) Conference, Mr Mak said outsourcing also enhanced the effectiveness of IT management.

Organised by the Information Technology Services Department (ITSD) with the theme "Enhancing IT management effectiveness through outsourcing", the conference brought together ITPSA contractors, user departments and IT practitioners.

Mr Mak said outsourced IT service providers and suppliers had helped the Government in achieving its target of providing an e-option for 90% of all public services amenable to the online mode of delivery by the end of 2003.

The Government has outsourced its IT projects for a number of years. There has been a healthy increase in the type of projects outsourced and the number of contractors, both local and international, taking part in those projects.

"In 2001, we reinforced our outsourcing strategy and our objectives to enlarge the delivery capacity for IT services, to accelerate the delivery of IT solutions and to create a market of sufficient size to encourage the further development of the IT industry locally," Mr Mak said.

At present, the Government outsources close to 90% of its new IT projects. It also started to outsource its application maintenance work in 2001.

"In June last year, we signed the Standing Offer Agreements under our ITPSA as part of our outsourcing strategy to provide an effective tool for us to outsource IT projects," Mr Mak said.

Twenty-three such agreements were awarded to 12 companies of varying sizes and origin. Under the agreements, the 12 contractors provide IT professional services when required by government departments during a 30-month period that started on June 27, 2002.

Since these agreements have been in force, 180 work assignments with a total value of $142 million have been awarded.

Mr Mak said the Government had been striving to uphold the highest standard of integrity in dealing with outsourcing acquisitions and had established tools under the ITPSA framework to help safeguard integrity.

The department also worked closely with the Corruption Prevention Department of the Independent Commission Against Corruption during the preparation and execution of the ITPSA.

To foster enterprise application integration and information exchange, ITSD introduced the Interoperability Framework in November last year and has been promoting and guiding government contractors to adopt a common standard framework.

Some ITPSA contractors have successfully applied the Interoperability Framework in their system deployment, thus facilitating seamless integration and interconnection of government applications and their public interfaces.

"Another crucial aspect to the success of IT outsourcing is the effective quality management of outsourced projects," Mr Mak pointed out.

Service providers are required to have a quality management system in place for service delivery and are encouraged to adopt international standards such as ISO9001 and Capability Maturity Model.

To enhance the governance structure for IT in support of e-government, the department has established more IT Management Units (ITMUs) throughout the civil service. So far, over 40 bureaux and departments have set up their IT Management Units.

As the ITMUs are also expected to adopt a vigorous outsourcing policy, the department will facilitate them in adopting best management practices for managing outsourced IT projects.

"In implementing our outsourcing strategy, it is important that we keep track of international best practice in this arena," Mr Mak said.

He quoted a recent study conducted by Accenture and the Economist Intelligence Unit on the outsourcing strategy of 23 governments, in which the Hong Kong Government ranked highly in terms of efficiency in both cost reduction and productivity.

The report, published in May, also highlighted the Government's success in adopting proven methodologies in its projects.

Mr Mak said he was glad to find that an increase of about 10% of the overall IT budget had been earmarked for the current financial year under the challenge of expenditure cuts and resource constraints. The department fully appreciates the need to do more with less and will look to the client departments and partners in the industry to help as well.

He said that despite its success, the Government would not be complacent and would work with its service providers to further its management excellence in IT outsourcing.

Thirteen talks addressing different aspects of outsourcing were scheduled for the one-day conference. Representatives from various government departments will also participate in a panel discussion to share their experiences in using the ITPSA.

End/Monday, July 7, 2003

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