Outsourcing decision support models: An application at NASA Glenn Research Center

There has been a tremendous growth in outsourcing practices in recent years. Literature suggests that by now most public and private organizations have outsourced some of their functions. The National Aeronautics and Space Administration (NASA) at its John H. Glenn Research Center (GRC) is one of the public organizations that has outsourced some functions and is now being compelled to outsource additional ones. While NASA GRC has outsourced in the past, the outsourcing decisions have been based largely on subjective processes. NASA GRC is seeking guidance and outsourcing decision support.; Due to the rapid growth, outsourcing research has not always kept up with practice. One area where research is limited is in outsourcing decision support for public organizations in the United States, like NASA. Literature is limited in quantitative models and tools, especially for public organizations where primary outsourcing motives are not necessarily cost based.; This study fills this research gap by developing both conceptual models and mathematical formulations to assist NASA in its outsourcing endeavors. A set of outsourcing factors is developed that are relevant to NASA. A procedure is designed that utilizes the factors to ascertain the organization's priorities and then rate functions that may be outsourced against those priorities. Three integer programming formulations are developed. The first formulation identifies which functions are the best candidates for outsourcing given the organization's priorities and the function's characteristics. The other formulations place the functions into recommended contracts and re-assign displaced employees respectively. Optimum solutions to the formulations are found. Analysis indicates that solutions are most affected by budget and skills related factors. The suite of models and formulations offer a relatively comprehensive support package which is intended to provide specific recommendations to NASA decision makers.