Outsourcing of internal services: case studies from the Czech Republic

Outsourcing the production of internal services to private for-profit and non-profit firms represent the most common types of alternative service-delivery arrangements. The relevant literature focusing on the developed... [ view full abstract ]

Outsourcing the production of internal services to private for-profit and non-profit firms represent the most common types of alternative service-delivery arrangements. The relevant literature focusing on the developed countries conditions, suggests that if, and only if the outsourcing is properly implemented, then it may, but need not improve cost-effectiveness. In countries making the transition from socialism to market-based economies, or other transitional countries, the situation is much more complicated, as existing literature confirms.
In this text we provide data about results from outsourcing in two public organisations in the Czech Republic – city hall and city theatre. The data obtained by direct research suggests that externalization delivers mixed results and does not deliver improved efficiency automatically. Both organisations use mix of internal services delivery forms – some services are produced in house, some externalised. Not in all cases the current delivery mode represents optimum solution. The most complicated issue is transportation services.