Challenges and Prospects of Outsourcing: the Case of Commercial Bank of Ethiopia
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Date
2015-05
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Addis Ababa University
Abstract
The purpose of this research is to assess the challenges and prospects of outsourcing the
security, messenger and janitorial services in commercial bank of Ethiopia and to come
up with the possible solution to minimize the existing problems. The study covers CBE
branches under west Addis district and the outsourcing administrative office. The
researcher used both qualitative and quantitative data collected through questionnaires,
interview, and review of CBE service level agreement document.
The findings of the study show that the outsourced services enabled the bank to save
managers time, give more attention for the core functions of the bank rather than non
core areas and expand its branch aggressively. On the contrary defining SLA, selecting
the right vendor, loss of direct controlling and measuring service qualities were the
challenges of the bank as the result of outsourced services. In addition to these,
employees of the service provider were not properly trained about their job, lack
motivation and belongingness, not properly equipped with materials that help to perform
their job. Thus, the performance of the service provider was not as per service level
agreement. Finally, it is recommended that commercial bank of Ethiopia should deal with
the service provider to revise the service level agreement and enforce the service
provider to facilitate the necessary training to improve employees’ skill and to provide
working materials for a particular job. The bank also need to follow up the service
quality as per SLA and check the amount of commission that the service provider
collect from each employees monthly salary as compare with the bank paid to the
service provider per individual employee
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Keywords
Prospects of outsourcing, Ethiopia