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.
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.