Contracting to improve public service provision: A typology for concurrent sourcing strategies

There is a huge discussion on whether an increased use of contracting out will increase public efficiency, and that the public sector needs to use the private sector more to increase innovation. However, contracting (in-or-out) is not the only option. The phenomenon of using both internal and external suppliers simultaneously, i.e. concurrent sourcing, has previously only been examined to a limited extent. Two effects are typically mentioned for concurrent sourcing: first, an efficiency effect from enhanced possibilities for benchmarking and controlling both internal and external supplier; and second, a knowledge effect from enhanced possibilities of knowledge sharing and learning between the internal and external production. However, these effects may differ depending on which supplier is producing the largest share of the total production. We propose a typology containing four distinct concurrent sourcing strategies by combining the aim of concurrent sourcing (efficiency versus knowledge oriented) and the amount produced internally and externally.