BOO Model for Outsourcing E-Government Services

Outsourcing E-government services helps governments to overcome barriers, such as lacking skilled IT Staff and limited financial resources. There are some models for the government to outsource its E-government services. This article analyzes one of such outsourcing model; building-owning-operation (BOO) using a transaction cost theory approach. By modeling the outsourcing strategy, the article argues about the maximum E-government benefit and the maximum profit of the vendor. It also discusses the expected E-government benefit that is affected by the vendor's some degree of shirking and the incentive policy which the government can adopt to remove the attractiveness of shirking to the vendor. The approach used in this article provides both of the contracting parties with a strategy and techniques for analyzing some complex issues when they deal with outsourcing decision-problems.