The prevalence and success of outsourcing in Australian public sector organisations

Abstract

This study explores the prevalence of outsourcing in the Australian public sector and evaluates outsourcing success in respect to the achievement of specific strategic and operational outcomes. The study also examines the association between an integral component of management control systems (MCS), the exchange of information (level of information sharing and level of information quality) between outsourcing partners, and outsourcing success. The results reveal a high level of outsourcing in Australian Government organisations, with outsourcing more prevalent in government business enterprises than government agencies/departments, and least prevalent in local government councils. Outsourcing was highly successful with the three most commonly achieved outcomes being an increased focus on core competencies, improvements in flexibility, and improvements in skills and technology. The results also highlight the importance of an effective MCS, with both the level of information sharing and the level of information quality associated with the success of outsourcing.