Outsourcing : a business model to improve municipal service delivery

Maloba, Ngako Daniel (2008-12)

Thesis (MBA (Business Management))--Stellenbosch University, 2008.

Thesis

ENGLISH ABSTRACT: This study report concerns service delivery issues at municipal level which have emerged as areas of critical concern as far as they affect consumers of municipal services, interest groups and government as a whole. Background to investigation. The need to investigate the service delivery challenges at municipal level arose out of multiple newspaper reports reflecting on lack of satisfaction from end-users and authorities regarding quality of delivery. Organizations such as South African Local Government Association (SALGA) and South African National Civic Organization have both commissioned assessment of municipal service delivery performances, and the reports drafted thereof were both critical and unimpressive. Based on these reports, the author recognized the need to investigate the reasons for poor service delivery and to test the idea of adopting outsourcing as a complementary mechanism to the delivery of services that are currently being employed. Procedure used. The information gathering for this investigation was done by means of structured interviews with municipal managers and senior officials in the administration. Provinces which were covered in the study include Limpopo, Gauteng, and North West. Although it was desirable to include more provinces in the study, it was however not feasible owing to limited resources available. Related literature was examined to further enhance insight in the subject and also to search for added potential solutions to the service delivery problem. Results of investigation. The findings reveal that primary barriers to quality service delivery are lack of sufficient municipal capacity; shortage of skilled workers; budgetary constraints; lack of effective management systems to ensure that, when a service is sourced from outside, competent service providers are appointed and their performance satisfy and exceed expectation and requirements. The root causes to these service delivery challenges are, among other things, a consequence of economic development which stimulates demand for skilled workers in the private sectors, and limited resources in the coffers of government. To compound the challenges, municipalities are unable to attract, develop and retain the quantities and qualities of skilled workers they need, owing to the uncompetitive pay packages they offer. Literature has revealed that legislature, in the form of Municipal Systems Act, make provision for municipalities to explore service delivery mechanisms in order to supplement internal means (Municipal Systems Act, 32 of 2000). Conclusion. From the results and findings the following conclusions can be drawn: Owing to the present demand for service delivery and the inability of municipalities to build sufficient internal capacity, alternative mechanisms such as outsourcing, must be explored and employed. In addition, there is, however, a great need for management systems and structures to be established or upgraded to ensure that mileage from external service providers is maximized. Recommendation. Following the results of the investigation and the conclusion made, the following actions can be recommended: • Assess service delivery capabilities and identify gaps. • Establish service needs and requirements that can be sourced externally. • Set up robust management systems and support structures to ensure that outsourcing initiatives are guaranteed to be successful.

AFRIKAANSE OPSOMMING: Hierdie studieverslag het betrekking op munisipale diensleweringskwessies - 'n gebied wat sorgwekkende afmetings aanneem in die opsig dat verbruikers van munisipale dienste, belangegroepe en die regering as 'n geheel daardeur geraak word. Agtergrond van die ondersoek. Die behoefte aan 'n ondersoek na die uitdagings ten opsigte van dienslewering op munisipale vlak spruit uit verskeie koerantberigte wat die gebrek aan tevredenheid van eindgebruikers en owerhede aangaande die gehalte van dienslewering reflekteer. Organisasies soos die Suid-Afrikaanse Vereniging vir Plaaslike Regerings (SALGA) en die South African National Civic Organisation het beide die assessering van munisipale diensleweringsprestasies gelas. Die verslae wat hierna opgestel is, was krities en onindrukwekkend. Die outeur het, gebaseer op hierdie verslae, twee behoeftes geeien: die behoefte aan 'n ondersoek na die redes vir die swak diensverskaffing geeien, en die behoefte aan die uitkontraktering, soos wat tans aangewend word, as 'n aanvullende meganisme tot dienslewering. Die prosedure wat gevolg is. Die insameling van inligting vir hierdie ondersoek is gedoen deur gestruktureerde onderhoude met munisipale bestuurders en senior amptenare in die administrasie. Provinsies wat by die ondersoek betrek is, is Limpopo, Gauteng en Noordwes. Alhoewel dit wenslik is om meer provinsies in te sluit, was dit weens beperkte beskikbaarheid van hulpbronne nie uitvoerbaar nie. Verwante literatuur is geraadpleeg om verdere insig in die onderwerp te verkry en ook om bykomende moontlike oplossings te vind vir die probleem van dienslewering. Resultaat van die ondersoek. Die bevindinge dui daarop dat die primere struikelblokke in die pad van gehalte dienslewering die volgende is: gebrek aan munisipale bekwaamheid, tekort aan geskoolde werkers, beperkte begrotings, en 'n gebrek aan effektiewe bestuursisteme wat kan verseker dat, indien 'n diens uitgekontrakteer word, bekwame diensverskaffers aangestel word en dat hulle werksverrigting bevredigend is en verwagtinge en vereistes oortref. Die grondoorsaak vir hierdie uitdagings in dienslewering is o.a. die gevolg van ekonomiese ontwikkeling wat die aanvraag na geskoolde werkers in die privaatsektor stimuleer en hulpbronne in die staatskas beperk. Wat die uitdaging verder vergroot, is dat munisipaliteite, as gevolg van die onkompelerende besoldigingspakkette wal hulle aanbied, nie in staat is om die kwantiteit of kwaliteit geskoolde werkers wat hulle benodig te trek, ontwikkel of te behou nie. Literatuur het aan die lig gebring dat wetgewing, in die vorm van die Wet op Munisipale Rade, voorsiening daarvoor maak dat munisipaliteite diensverskaffingsmeganismes ondersoek ten einde interne vermoens aan te vul. Gevolgtrekking. Die volgende gevolgtrekkings kan afgelei word uit die resultate en bevindinge van die ondersoek: Te wyte aan die huidige aanvraag vir dienslewering en die onvermoe van munisipaliteite om voldoende interne bekwaamheid op te bou moet alternatiewe meganismes soos uitkontraktering ondersoek en aangewend word. Daar is egter ook 'n dringende behoefte dat bestuursisteme gevestig of opgegradeer word ten einde te verseker dat maksimale insette verkry word van eksterne diensverskaffers. Aanbevelings. Die volgende optrede word aanbeveel na aanleiding van die uitkoms van die ondersoek en die gevolgtrekking waartoe gekom is: • Assesseer die geskiktheid van dienslewering en identifiseer die leemtes. • Stel vas watter diensbehoeftes en -vereistes suksesvol uitgekontrakteer kan word . • Vestig kragtige bestuur- en ondersteuningsisteme om te verseker dat uitkontrakteringsinisiatiewe gewaarborg is om suksesvol te wees.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/6173
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