Factors influencing outsourcing of services in banks; a case study of first community bank Garissa branch, Kenya

Abstract

Outsourcing has become a very vital business strategy in the current world. Due to the effects of globalisation and increased cost of production in Kenya, many companies are finding it important to innovate on ways which can reduce cost of operation and grow their profit margins This study sought to establish the impact of outsourcing as a strategy in supply chain management in First Community bank Garissa Branch in Kenya by examining and evaluating the outsourcing operations. The study specifically looked at the impact of outsourcing on the cost of business operations, competitive advantage, the quality of products offered and general customer service of the three multinationals.

The study used descriptive study and it sought to gain deeper understanding on outsourcing as a key strategy being pursued by companies in Kenya through seeking to answer the following questions; what, when, where, who and how. This study sought to explain what activities were outsourced, to whom they were outsourced, when and where they were outsourced and how they are were outsourced. This study also sought to gain a deeper understanding as to why certain activities were outsourced.

The study sought to understand how managers made outsourcing decisions and what impacts such decisions had on the overal1 running ot the business. A detailed questionnaire was administered to fifty employees of the First Community bank in Garissa Branch. Data collected was analyzed and statistical inferences were drawn regarding outsourcing. This study gave recommendations on the findings made on how FCB in Kenya can use outsourcing as a key strategy to grow their businesses, reduce costs of operations and gain competitive advantage over their competitors.