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