n Journal of Emerging Trends in Economics and Management Sciences - Business process outsourcing strategy and performance of Kenyan state corporations

Volume 5, Issue 7
  • ISSN : 2141-7024
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The formulation of business process outsourcing strategy has been one of the most debated management trends in the last twenty years. There has been lack of established consensus on the actual end effect of outsourcing. There is scanty information pointing to the manner in which outsourcing is approached, including its contribution to organisations. It is these gaps that drove the author establish the relationship between BPO and firm performance. The study drew an hypothesis to test the nature of the relationship between BPO and firm performance. This paper was a census study focusing on all the 144 Kenyan State corporations in existence by December 2012. The study managed to get respondents from 112 State corporations drawn from all the six functional classes as per the existing categorization, both primary and secondary data were used for analysis. The primary data was obtained from the information in the questionnaires distributed to the State corporations whereas the secondary data was retrieved from existing reports from the office of the Auditor General and the Performance Contracting instrument. The study employed a combination of both descriptive and inferential statistics, to establish the degree of association among the variables while simple and multiple regression analysis was used to establish the cause and effect, degree and direction of the relationship between the variables. The findings of this study confirmed that Kenyan State corporations were involved in outsourcing, and that BPO had a positive contribution to the firms' overall performance. Thus, the study provides empirical evidence to support that, BPO's benefits as pertains to its contribution to enhancing performance will be realized by the corporations who will adopt the right type of strategies. Strategies that are adoptive to changing market trends and those who will invest in skilled human capital to adequately manage BPO and other processes. This study is expected to form a useful guide to the government as it implements the vision 2030 and especially on policies governing BPO. Being one of the six key sectors of the economic pillar, the findings of this study will make a substantial contribution with regard to how the benefits of BPO can be maximized. The study having focused on State corporations that form a substantial component of the public sector, the findings of this study are vital hence the government may find it useful in the implementation of the vision 2030.Both public sector and private institutions already engaged in or intending to outsource will find this study a useful guide to assist them set up modalities including policies and regulations necessary to govern outsourcing. For those institutions already involved in outsourcing, the findings of this study may form an important benchmarking tool. Having clearly demonstrating the crucial factors necessary for BPO and performance success, decision makers in both public and private bodies will be guided on the need to put in place adequately skilled and capable manpower as well as the need to re-evaluate their approaches to BPO to ensure they are strategic.

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