Challenges of business process outsourcing at Kenya Power and Lighting Company Limited
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Business outsourcing has become an important business strategy because it enables businesses to reduce and control operating costs, to improve company focus, to gain access to world class capability and to free internal resources for other purposes. The energy sector is currently being liberalized and this has attracted other players in the industry who have now been mandated to generate power for example the Mumias Sugar Company. Although KPLC still remains a monopoly in distribution, the environment is rapidly changing. It used to be the sole transmitter of electrical energy until the formation of a new company, namely Kenya Transmission Company Limited in 2008, which is mandated to build and own new transmission lines. The purpose of this study is to establish the challenges facing KPLC in implementing the BPO strategies and to identify the business operations that KPLC outsource. This research was conducted through a case study. The researcher used an interview guide as primary data collection instrument. The interview guide was administered through personal interviews with the Managing Director, Chief Managers, Managers, Regional Managers and chief officers of KPLC. Data collected was qualitative and it was analyzed by content analysis. From the study findings, the study concludes that business process outsourcing (BPO) is done in all departments at KPLC. The driving factors of BPO are inadequate in-house capacity, excess workload, cost reduction and skills gap, cost of in-built process which were high and hence outsourced to reduce costs, considerations of efficiency in terms of special skills required a variety of skills. Poor quality assurance and control and outsourced services being prone to delays in delivery are some of the challenges faced during business BPO. The study recommends that KPLC should take in-built quality control measures, strict timeliness/deadlines, penalties for non-performance, strict contracting measures/procedure which ensures that it gets the most competitive outsourced services. The company should ensure that confidentiality is upheld by the contracted firms by spelling out rules and regulations and other documentation where all contracting parties abide in writing and all processes outsourced must be laid down through proper legal contracting.
University of Nairobi, Kenya