Outsourcing Decision Making in Public Organizations

Abstract

In the past several decades, departments of transportation (DOTs) have explored outsourcing as an alternative to human resource development or as an enhancement to productivity. Many studies have looked at outsourcing within DOTs: some indicate success and some indicate failure. Little agreement is found in either process or scope within the governmental outsourcing literature. A potential solution to the decision to outsource in public agencies is explored through a comprehensive, process-based evaluation linking DOT goals and managerial insight to competencies, a hierarchical evaluation to indicate a potential priority list based on management insight, a knowledge audit to address knowledge transfer and loss, a traditional cost collection and market analysis, and an evaluation of human resource expertise and utilization. The process leads to a outsourcing decision support tool that evaluates the multidimensional implications of outsourcing, allowing potential functions to be hierarchically listed for outsourcing and informing decision makers of functions that need internal resource allocation.