Effects Of Outsourcing Strategy On Operational Efficiency Among Ethio Telecom Zonal Offices
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Date
2018-06-04
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Addis Ababa University
Abstract
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 excellent capability and to free internal resources for other purposes. The concept of operational efficiency encompasses the practice of improving all of your processes (all your company’s activities that lead to your final product or service). Although there is substantial investment on telecom infrastructure and service expansion over the last decade aimed at improving the reach and capabilities of mobile networks in Ethiopia, the country’s mobile penetration (of active subscriptions) remained among the lowest in sub-Saharan Africa. The purpose of this study was to establish the effect of outsourcing strategy on operational efficiency among Ethio telecom zonal offices. The research objectives were: to establish the extent and nature of outsourcing strategy implemented, to find out the effect of outsourcing on operational excellence, to determine the effect of outsourcing on financial efficiency of operations, to establish the effect of outsourcing on brand-customer relationship capability of operations and to establish effects of outsourcing on operational responsiveness capabilities of Ethio telecom zonal offices. A correlational research design was adopted in this study. Stratified random sampling was used to select questionnaire respondents while purposive sampling was used to select interview respondents. Quantitative data resulting from the questionnaire was analyzed using Statistical Package for Social Sciences 22(SPSS) while qualitative data was analyzed using themes and presented in form the of narratives. From the data analysis, this study found out that business process outsourcing was most popular form of outsourcing used in Ethio telecom zones. Further, outsourcing had effects on operational excellence, and operational responsiveness capability while its effects on financial efficiency of operations and brand-customer relationship capabilities of operations were found to be statistically insignificant. From the findings, this study recommended increased supervision on performance of outsourced service providers to ensure they deliver agreed upon results, increasing the level of outsourcing from tactical to strategic then working towards transformational outsourcing and establishing proper communication on quality requirements of outsourced services. Furthermore, all parts of internal operations should be communicated with outsourcing decisions in order to put new policies or procedures into action at the right time.
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Keywords
outsourcing, efficiency, strategy