How outsourcing can contribute to the efficiency and effectiveness in the public sector : some indicators about Portugal

Outsourcing is a practice used by different companies to reduce costs by transferring working with outside suppliers rather than performing them internally. Cutting costs are 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. The study presented here is an early stage of research to be developed on outsourcing in Portugal and its position in relation to public authorities in other countries. It aims to propose a theoretical model to explain the use of outsourcing in the public sector, as well as a set of variables that may improve understanding of the key determinants of the success of this research.