Term Paper: Benefits of Outsourcing

Sample Term Paper – Outsourcing

Words 2,100

This term paper discusses some useful benefits of outsourcing. The potential benefits are enormous. Increasing demands for services, global fiscal pressures and a public-sector human-capital catastrophe add up to momentous pressure for governments to do more with less.

The potential benefits are enormous. Increasing demands for services, global fiscal pressures and a public-sector human-capital catastrophe add up to momentous pressure for governments to do more with less. In response, government executives gradually are turning to outsourcing as an answer. They target objectives ranging from improving service to citizens and gaining access to new sources of capital to cutting costs results The US Center for Naval Analysis report showed that effective costs after outsourcing those that take service upgrading into account varied from 66 % less to 25 % more than annual baseline costs. (Clark et al., 2001)

Partnerships between state and local governments and private sector business organizations to accomplish specific civic goals such as neighborhood crime reduction, community redevelopment, and job creation, are predominantly effective when public and business agendas coincide.

A lesser-used technique is asset sales. Here a state or local government sells its buildings and other public assets to private, for-profit companies. In trade, the governmental unit receives cash to finance other public service initiates as well as enlarges its property tax base. Generally, such sales occur because of governments outsourcing the provision of public services, thereby eradicate the need for public facilities.

Even though competition is a Response from the 1988 ICMA survey indicated that about 40% of the local government officials responding to the survey reported that outsourcing had saved their municipalities more than 20% contrast to the cost of previous, governmentally supplied services. Another 40% of the respondents reported that their cities saved from 10 to 19% of previous expenditure. (Feldman, 1999)

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