Outsourcing And Performance Of Public Institutions In Uganda: The Case Of Contracting At National Planning Authority

ABSTRACT

The study sought to establish the effect of outsourcing on institutional performance in public institutions and it used Uganda’s National Planning Authority as a case study. The objectives were to ascertain the relationship between the dimensions of the independent variable (outsourcing) and the dependent variable (institutional performance). The study adopted a cross-sectional survey (mixed methods) design and the sample size was 71 respondents. The researcher used a questionnaire, key informant interview guide and document review to collect data. that the data was analyzed using the thematic analytical approach and by calculating: frequencies, means and standard deviations as well as correlation and regression analyses using SPPS V19. The study established a weak positive correlation for outsourcing IT functions (0.198) and HR functions (0.120) with institutional performance which was not statistically significant since the significance level for both dimensions (0.108) and (0.228) respectively was greater than 0.05. The study also established a weak negative correlation for outsourcing facility management services (-0.021) with institutional performance which was also not statistically significant since the significance level (0.447) was greater than 0.05. The results from the regression analysis established that outsourcing IT functions was the most significant contributor to institutional performance at NPA with an Unstandardized B coefficient of 0.222, followed by outsourcing HR functions with an Unstandardized B coefficient of 0.109 and lastly outsourcing of facility management services with an Unstandardized B coefficient of 0.061. These findings indicated that much as there was a relationship between outsourcing IT and HR functions and institutional performance, there are other factors that influence institutional performance other than outsourcing. The study recommends the need to foster an innovative culture among the employees as well as emphasizing the importance of contract management for outsourced functions and services. NPA also needs to exercise strong fiduciary responsibility to save costs on outsourcing and to also optimize governance and systems to manage outsourced services.