Outsourcing as a strategy for competitive advantage by Barclays bank of Kenya

Abstract

Outsourcing is the practice of contracting people from outside the organization to provide specific services. Outsourcing as a strategy is not a new concept in the business world as most organizations outsource most of their services. Research indicates that the sheer size of spending on outsourcing and active involvement of top management executives makes outsourcing decisions more strategic in an organization today than ever. The objective of this study was to investigate the competitive advantage and challenges experienced by Barclays Bank of Kenya as a result of outsourcing of its services. Since the study was a case study, it was conducted through the use of interview guide that provided open ended questions that enabled the researcher to probe the respondents further for clarity of the subject. Data collected was analysed by the use of content analysis. The respondents were top management at the Sourcing Division of the bank. The findings of the study indicated that outsourcing enables Barclays Bank reduce its operational cost, enjoy expert and quality service and to focus on the core and strategic activities. It also noted that the major challenge experienced by the bank was training of new employees provided by the vendor. Another challenge noted was low motivation of the outsourced staff and difficulty in managing the vendors. The study experienced some limitations, such as, some respondents were not willing to provide certain information, and the study was also limited by the scope of information since it was a case study. Recommendation of the study was for Barclays Bank of Kenya to pilot test sourcing options in order to mitigate risk associated with vendors not being able to fulfill their obligations and to include confidentiality clause to guard against leakage of information. Further research need to be done to explore the opinion of other employees especially the junior staff, towards outsourcing and also a study on cost benefit analysis of outsourced services needs to be done to find out whether outsourcing is truly cheap in the long term.