This makes sense, providing there’s a mechanism to re-train and upskill those impacted by the change - this must be considered with each and every PS outsourcing deal where transferring staff is not realistic.
In the Public Sector context, reducing the cost of IT operational support for example, could free up staff who could potentially be used to support front line services - it’s change, which is never easy - but it can lead to the optimum mix of sourcing the right type of resources and services from the most appropriate locations.
In the IT environment where there is a seemingly acceptable norm that IT departments need to use expensive short term contract resource, there is in my experience always opportunity to reduce costs and improve service by re-balancing the mix of resources and services from the most appropriate locations, individuals and organisations and some of those services best suit offshore working, while many don’t.
The ultimate aim should be to achieve positive outcomes for everyone involved in the sourcing process - if this is in front of mind when planning the sourcing mix then offshoring of PS roles can certainly lead to positive results.