Executive Brief and Anticipated Questions
PoliceCo is obliged to conduct performance evaluations in order to show yearly improvements in efficiency, on the basis of which it is decided to outsource or preserve a specific operation. The public sector puts a greater deal of pressure on such organisations due to the larger scale of operations and greater pressure for efficiency, such as cost reduction. Tender practices provide better deals from the private sector but prevent long-term contracts. McKinsey 7S Model is the most applicable framework to understand the core intricacies of the case. Each element of the model dissects the case in a comprehensible and assessable piece of the problem, which can be addressed with a higher degree of precision and understanding.
- Question 1: How adversarial aspect of tendering can be minimised? Likely answer: Provide a small advantage for private companies, which were consistently offering the best value service.
- Question 2: How a more structured outsourcing measure in the public sector can be superior? Likely answer: More accountability and quicker decision-making instead of resource waste of frequent tendering.
McKinsey 7S Framework (Hard Ss)
McKinsey’s 7S model has three hard Ss, which are structure, strategy, and systems (Jurevicius, 2021). Strategically PoliceCo covers an area of 2,200 miles with a population of 2.1 million (Case Study 10: PoliceCo – outsourcing in the public sector). The goal is to obtain the highest quality of service for the lowest possible price. In the case of systems, contract splitting prevents monopolisation and bias, and healthy competition improves the quality of service and price, which are enabled through a bidding process. Structurally, legislation, such as the Best Value initiative, pressure PoliceCo to self-evaluate and outsource underperforming functions.
McKinsey 7S Framework (Soft Ss)
There are four soft Ss in the McKinsey 7S model, such as skills, style, staff, and shared values. The skills of interest involve effectiveness and efficiency with resources through periodic activity reviews, which provide insight into which functions to outsource. In the case of staff, PoliceCo’s 6000 employees are not able to perform all functions and serve the area with the desired degree of efficiency. Thus, private companies provide a larger pool of cheaper labour over a greater area presence. Stylistically, the tendering process enables the facilitation of best-value identification, which is compared to activity reviews. For shared values, such measures promote continuous improvement in performance with an emphasis on higher quality and resource efficiency.
Solutions, Change Practices, and Recommendations
A potential solution to the adversarial aspect of tendering is to provide minor favoritism for companies, which were consistently delivering high-quality service for a lower price, which will enable a more structured long-term contract agreement (Seba, 2018). It can be done similarly to a credit score system, where companies are tracked for their performance. A small form of implementation can serve as a testing ground in order to propose a legislative change.
Reference List
Case Study 10: PoliceCo – outsourcing in the public sector. [PDF file]
Jurevicius, O. (2021) ‘McKinsey 7S Model.’ Strategic Management Insight.
Seba, M. G. (2018) ‘Outsourcing rules in the public and the private sector: positive and negativa aspects of outsourcing,’ Intech, 1, pp. 1-14. doi:10.5772/intechopen.75869.