In-house companies are always faced with a dilemma: self-production or market. It is a dilemma related both to the production factors they have at their disposal, their capacity for growth, and the strategic positioning they have or want to maintain. The typical question related to this dilemma is whether one is a substitute for the market, rather than complementary. This is not only a view related to respecting free entrepreneurship or avoiding lock-in, but also to the political dimension in which the in-house is placed and the mission that the policy itself, the controlling and entrusting bodies, intend to pursue.

External factors such as rules and regulations come to the rescue in this scenario. Sometimes these guide or constrain choices and allow actions to be defined that cannot be outsourced in any way. An example for all is the procurement code. In the chain between public spending and the market, this must be applied at some stage. Since the inter-organic in-house relationship between Controller and Controller excludes the procurement code, then this is part of the relationship between the (in-house) Controller and the market.

In this case it cannot be eliminated except in areas or actions that by their nature are excluded, a priori, from the application of the regulation itself. An interesting example, among many possible ones, is that of an in-house telecommunications operator, where the regulation stipulates that the code does not apply but instead the principles underlying the code remain, creating a more flexible and rapid chain of actions and reactions to needs. The in-house is in this case to assess, action by action, whether this falls within its functions as a telecommunications operator or not, and as such to operate with or without the constraints of the procurement code. Interestingly, it is not the object of supply that is the discerning factor but the purpose, a pen to write as an operator is outside the procurement code, a pen to write as an in-house non-operator is within the procurement code. The pen is, however, still a pen.

Again, regulations in this sense influence decisions on tax applications. A primary infrastructure network is subject to preferential VAT, typically at 10 per cent instead of 22 per cent, but for a public administration where VAT is a cost, this implies a significant difference in discount on commitments, i.e. 12 per cent. The in-house is therefore faced with many choices, of authorisation scenario on the actions it is taking and the certifications or authorisations needed to do so, on the application of codes and constraints depending on the purpose and action, on the application of tax regimes depending on the purpose or novation involved.

The example of the telecommunications operation also allows us to address the case of a function that cannot be outsourced. The Code, this time the Electronic Communications Code, blatantly prohibits a public administration from operating a fibre optic cable except on an exclusive fund. A road, for example, is not an exclusive fund in that it is open to public use. So the public administration cannot operate a fibre on its own between two buildings with an interposed public road that, although owned by the same entity that owns the buildings to be connected, is not an exclusive fund.

This requires the presence of an operator. The code provides precisely that the public administration, prevented from exercising its own function, should construct and participate in its own suitable entity for this function. It is interesting if this entity becomes, as is often the case, an in-house, i.e. with analogous control with full public capital, with prevalent activity for shareholders, without competitive actions. Here, the public administration cannot carry out the action internally, but if it wants to retain real control, for example over development, operation and maintenance, it must necessarily retain direct control. This is how the in-house telecommunications operator is born and it is not typically outsourceable, except by renouncing some of the characteristics, often considered fundamental, mentioned above.

Let us take as an example another important function, which the public must interpret by law: digital transformation. In this case, this transformation has a Head, who must be appointed and communicated, and who effectively represents the reference person, internal to the organisation and external to those who deal with the organisation, relating to the direction and coordination of the digital transformation; to ICT strategic planning; to the governance of information systems and architectures; to the digitisation of processes and services; to interoperability and data management; to IT security; to internal organisational coordination; to the management of relations with suppliers; to the creation of digital skills and change management; to monitoring, measuring and reporting; and to the sustainability and impact of the digital transformation.

It goes without saying, from this list, the need for the person to be in-house and strongly structured in the governance of the organisation. Well, recently the reference standard, the Code (of the Digital Administration in this case) has provided that this complex and integral role can be performed by an in-house while it strongly excludes that it can be performed by external parties. The in-house is thus enshrined, in this case as never before, as a non-external entity, which not only takes orders from the controller, but with the appointed persons is a direct actor and thus coordinates actions. An epoch-making step, the deployment of which at the first entities required great care to avoid any possible form of ‘rejection’ by the organisational structure and conflict of interest.

In the cases we are seeing, which are regulated by law, it is crucial that the interpretation of the role carried out by the in-house is strongly constrained. In the sense that not only is there great knowledge of regulations but also great attention to constructing regulations and constraints where certain spaces would leave room for action but expediency suggests not to invade them. In the case of the telecommunications operator, for example, activities towards third parties can be done, but better if they are oriented towards the valorisation of the public infrastructure built and the creation of a market where this would naturally fail. In the case of RTD, the in-house performer may also be a provider of certain services, provided that the elements of third-party status are constructed as distinctly as possible, e.g. with regard to people and organisational structures, and that the RTD performer does not also manage the production of related services.

A further prominent example, towards the security chain, is that of the DPO. In this case, the DPO figure can be internal or external by rule. Here the advantages of being internal are: in-depth knowledge of the entity and processes, constant presence and greater operational integration, while the advantages of being external can be summarised as: greater independence, potentially more specialised and up-to-date expertise and potentially greater flexibility. It is interesting that these external elements can be interpreted to a greater extent by an in-house organisation precisely because of its characteristics and therefore a case where there is no obligation to internalise can benefit from the advantages of a pseudo-externalisation typical of in-house with the advantages of the typical operation of an in-house structure.

In general, the relationship between in-house and security is very strong and deserves reflection. The in-house operates for the Members both as a technology provider and as a service provider, in this sense it has experience gained on its own account that can be of great help to the Members or to the functions that the Members perform in the first place.