Outsourcing in universities: a comparative analysis of in-house sourcing and outsourcing

Abstract

Over the past decade, the private sector took the lead in restructuring, downsizing, andoutsourcing of the functions, which have performed previously in-house. Manyorganizations have outsourced information processing, various personnel activities, andproduction of parts that can he performed better outside the company. The goals are toreduce cost, improve productivity, manage stress, enhance competitive advantage andrespond to the fast-changing global environment that affects all organizations. Today thenumber of public sector organizations have also followed this strategy to reduce overheadcosts because o f limited budgetary allocations by the government, and to eliminate or atleast reduce inefficiency in their service delivery. However, there is an insignificant amountof research to reveal whether the public sector organizations have the capacity inachieving the goals, by following the above strategies by the private sector. Therefore, theobjective o f this study is to ascertain how outsourcing could be best executed in achievingthose most prominent goals. The exploratory research method was applied for this studyand the University of Ruhuna was selected as the case site. The study selected two valuechain activities namely, cleaning, and cafeteria services that have been outsourced by theUniversity o f Ruhuna. The main reasons that led the University of Ruhuna to take thedecision o f outsourcing are achieving cost effectiveness, improving the service quality,and help senior administrative people to concentrate higher demanding tasks. Thefindings confirmed that a level o f performance o f services which has been outsourcedwas satisfactory as compared with their previous standard.