Assisting public organisations in their outsourcing endeavours: a decision support model

There has been a tremendous growth in outsourcing practices in recent years. The public organisations in the USA have outsourced some functions and are now being compelled to outsource additional ones. While there are numerous studies that document and analyse outsourcing practices, there is limited research to guide public or governmental organisations, in determining what functions to outsource. This study fills this gap by developing a decision support model for a typical public organisation in determining what to outsource and how. A set of outsourcing decision factors is identified that can be used as parameters in the three Integer Programming (IP) formulations developed. These formulations are used as solution engines in the model. The first formulation identifies which functions are the best candidates for outsourcing given the organisation's priorities. The other formulations place the functions into recommended contracts and reassign displaced employees. Data from NASA Glenn Research Center in Ohio are used to test and analyse the model. Analysis indicates that cost- and skills-related factors are the most sensitive parameters for the data tested. The model and the formulations are a relatively comprehensive package and may help guide outsourcing Decision Makers (DM) and policy makers in public organisations.