Guide to ICT Sourcing - Introduction
Introduction
What is ICT?
Information and communications technology (ICT) refers to the technologies and services that enable information to be assessed, stored, processed, transformed, manipulated and disseminated, including the transmission or communication of voice, image and/or data over a variety of transmission media1.
What is ICT Sourcing?
ICT sourcing determines where an agency’s ICT components are obtained, managed and run. The basic objective of ICT sourcing is to deliver the best level of support for the agency’s business requirements in the most cost-effective way. This is encapsulated in the Australian Government’s policy objective of achieving value for money.
For some agencies, the ‘best level of support’ may mean access to skills and expertise not available internally, or greater flexibility to allow ICT to meet changing business needs. Others may use ICT sourcing as a way to release resources and allow for a greater focus on strategic objectives.
This guide defines three broad types of ICT sourcing, based on the degree to which ICT is managed externally and the number of vendors involved:
- Self-managed ICT is predominantly managed and run by internal resources, possibly including contractors or consultants, with little or no Service Level Agreements (SLAs) with external vendors.
- Single sourcing ICT is predominantly run by a single external party under an SLA.
- Multi-sourcing ICT is predominantly run by multiple external parties under one or several SLAs.
Single sourcing and multi-sourcing are often grouped together and called ‘outsourcing’, while self-managed is also referred to as ‘in-house’. In a self-managed arrangement, agencies would purchase goods from suppliers, and procurement would largely be transactional. In an external arrangement – either single or multiple – agencies would generally need to manage a more complex relationship with a vendor. Most agencies would typically use a mix of all three sourcing methods for different aspects of their ICT infrastructure and services.
There are other sourcing models such as Business Process Outsourcing (BPO), shared services, co-sourcing, offshore, and contracting out. These can be considered variations within the three basic models described above.
1 - Australian Bureau of Statistics, ICT Statistics Glossary, 2007
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