Challenges Of Implementing Outsourcing Strategy By Commercial Banks In Kenya

Abstract

The study is a comprehensive evaluation of the challenges encountered when implementing the outsourcing strategy by commercial banks in Kenya. Various variables were used to determine how effective commercial banks are in implementing the outsourcing strategy and establish challenges faced by commercial banks in implementing the outsourcing strategy. The study primarily targeted all the 44 commercial banks in Kenya and 66% responded. The study concluded that outsourcing has resulted in improved focus on core competence, better operational control and efficiencies, gaining competitive advantage, gaining access to new technology and skills, risk management, quality control, increased focus on core competence and increased productivity. It also concluded that the factors that greatly influence the successful implementation of the outsourcing strategy are clear vendor selection process and a clear existing policy on outsourcing. The greatest challenges experienced the commercial banks in the outsourcing implementation process are inadequate resources availed for the implementation processes and ineffective management of the process. The valuable information gathered in this study will guide and improve managerial policy on planning, directing, staffing, monitoring and control, not only in the banking industry but in other sectors as well. For outsourcing to remain successful and sustainable for commercial banks managers should provide ample resources for the implementation process and deal with it effectively.