Capacity Management, Service Quality and Customer Satisfaction in Information Technology Service Companies in Nairobi, Kenya

Abstract

IT service providers are companies that provide advice to companies on how best to apply IT in their operations in order to achieve their objectives. Capacity management for IT service companies is important for optimization of available resource an competitiveness. The main objective of this study was to establish capacity management strategies used by IT service companies in Nairobi, Kenya, the most important service quality dimension that impacts customer satisfaction and to also establish how service quality influences the relationship between capacity management and customer satisfaction as well as challenges faced by the firms in implementing capacity management strategies. The researcher adopted a cross-sectional research design to carry out the study on 28 IT service companies registered with the Kenya IT and Outsourcing Services (KITOs) organization as at September 2017 and their customers based in Nairobi. The researcher used a questionnaire to collect primary data. Regression and correlation analysis was carried out to establish the relationship between the variables and the direction of the relationship. The study ascertained that the four capacity management strategies under study i.e. Level strategy, Chase demand strategy, coping strategy and minimum staff levels have been adopted by the IT service firms to various degrees. However, the most adopted capacity management strategy by IT service companies is Chase demand strategy. The study also established that the capacity management practice adopted has a positive influence on service quality. SERVQUAL scale was applied to measure service quality of IT service companies. The results from the study of impact of service quality dimensions namely Assurance, Responsiveness, Tangibility, Empathy and reliability on customer satisfaction was studied show that Assurance has the highest impact followed by Responsiveness while Empathy has the lowest impact. The four conditions of Baron and Kenny (1981) were met and therefore the results of the study show that service quality plays a mediating role between capacity management and customer satisfaction. The study also establishes that although the various firms manage their capacity, there are still challenges in their implementation such as the high cost of implementation, lack of qualified staff and lack of proper communication among others. In order to ensure effectiveness in their operations, this study recommends that IT service companies should have a capacity management strategy implemented and rally the whole organization to support its implementation given that capacity management greatly impacts service quality and customer satisfaction. The IT service companies should also look at reviewing their working hours in order to make their services available to the customer when needed and also customize them to meet individual needs of each customer.