Journal of Economics and Development Studies

Outsourcing as Efficiency Factor in Public Sector
Maria da Conceição da Costa Marques, PHD

Abstract
Outsourcing is a practice used by different companies to reduce costs by transferring working to outside suppliers rather than performing them internally. Cutting costs is presented as a key benefit in hiring an outsourcing service. Besides to the overall increase efficiency by more rational and efficient allocation of resources, the management of the contract with the external provider allows organizations to adopt more stringent cost control mechanisms, as all components of the relationship with the provider are formalized and systematically evaluated. It also allows the organization to transfer fixed costs to variable costs, reducing the costs related to the acquisition, management, maintenance and updating of equipment, supplies and infrastructure, as well as reduce costs with the management and supervision of teams assigned to non-core activities. This article is an early stage of the investigation that intends to effect under the outsourcing in Portugal. Its purpose is to propose a theoretical model to explain the performance of the use of outsourcing in the public sector, as well as a set of variables that might improve understanding of the key determinants of success.

Full Text: PDF     DOI: 10.15640/jeds.v4n3a5