Achieving Competitive Advantage Through Outsourcing at National Bank of Kenya Limited

Abstract

Outsourcing is growing at a rapid rate throughout the world because organizations view it as a way to achieve strategic goals, improve customer satisfaction and provide other efficiency and effectiveness improvements. Outsourcing assists management focus all their intellectual resources, expertise and time on the distinctive competencies that give the firm an edge in the market. Focusing on the core activities ensures collective learning especially on how to co-ordinate diverse production skills and integrates multiple streams of technologies. The purpose of the study was to determine the role of outsourcing services as a source of competitive advantage at the National Bank of Kenya. The study adopted a case study research design in which an interview guide was used to collect data and content analysis was used in analyzing the data. The result findings show that as a result of outsourcing, the bank has gained some level of competitiveness and also a competitive advantage over other players in the banking industry. The bank has gained good competitiveness such that it currently collects around 45% of all KRA remittances and with the high level of collection, it has been able to receive proportionately high commissions from the transactions. The bank has however faced a number of challenges in the course of servicing the outsourced services. These challenges include the small number of transaction that a client might request which will be uneconomical to the bank since for the cost of processing to be covered, there should be a minimum number of outsourced transactions that a client should offer. The study recommended further research to be carried out on other banks in Kenya and/or East Africa.