Assessment of Factors Influencing Decision to Outsource Information and Communication Technology by Commercial Banks in Kenya. Journal Article

Authors: Muchai, Edward; Acosta, Freddie
Article Title: Assessment of Factors Influencing Decision to Outsource Information and Communication Technology by Commercial Banks in Kenya.
Keywords: ICT; INFORMATION & communication technologies; AUTOMATED teller machines; INFORMATION storage & retrieval systems; DECISION making; BANKING industry; KENYA; Commercial Banks; Outsourcing
Journal Title: DLSU Business & Economics Review
Volume: 22
Issue: 1
ISSN: 01167111
Publisher: Unknown  
Date Published: 2012-07
Start Page: 63
End Page: 96
Notes: --- - Article - Information and communication technology outsourcing is a major part of outsourcing decisions by commercial banks operating in Kenya and has registered a rapid growth recently. The study sought to find out the information systems (IS) functions which were outsourced by the banks and rank the factors influencing IS outsourcing decision according to importance. To achieve this, the study adopted an exploratory study in which all the 45 banks in Kenya were studied. The study used self administered questionnaires to collect data, which was analysed using various analytical tools. The study established that commercial banks mainly outsource functions such as systems implementation, network services, software and hardware maintenance, and Automated Teller Machine (ATM) services. The study further established' that factors such as cost, desire for quality, size of organization, and business strategy, among others, influenced the banks' decisions to outsource IS functions to a large extent. The study established that the small banks had a higher level of IS outsourcing as compared to large and medium banks. This is attributed to lack of technical capacity and need to deliver quality service at a minimal cost. The study revealed that operational costs was ranked as number one driver of outsourcing decision by commercial banks operating in Kenya followed by the desire for quality and organizational size respectively. The study concluded that though cost was the main driver of outsourcing decision, there existed other factors which were equally important such as desire for quality and business strategy among others. [ABSTRACT FROM AUTHOR] - Copyright of DLSU Business & Economics Review is the property of De La Salle University Manila and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.) - ! 'Accession Number: 78399382; Muchai, Edward 1; Email Address:; Acosta, Freddie 2; Email Address:; Affiliations: 1: Kenya Revenue Authority, Nairobi, Kenya; 2: Strathmore Business School, Nairobi, Kenya; Issue Info: 2012, Vol. 22 Issue 1, p63; Thesaurus Term: INFORMATION & communication technologies; Thesaurus Term: AUTOMATED teller machines; Thesaurus Term: INFORMATION storage & retrieval systems; Thesaurus Term: DECISION making; Thesaurus Term: BANKING industry; Subject: KENYA; Author-Supplied Keyword: Commercial Banks; Author-Supplied Keyword: ICT; Author-Supplied Keyword: Outsourcing; NAICS/Industry Codes: 334110 Computer and peripheral equipment manufacturing; NAICS/Industry Codes: 334118 Computer Terminal and Other Computer Peripheral Equipment Manufacturing; NAICS/Industry Codes: 423420 Office Equipment Merchant Wholesalers; NAICS/Industry Codes: 522329 Other financial transactions processing and clearing house activities; NAICS/Industry Codes: 417910 Office and store machinery and equipment merchant wholesalers; NAICS/Industry Codes: 238299 All other building equipment contractors; NAICS/Industry Codes: 238290 Other Building Equipment Contractors; Number of Pages: 34p; Illustrations: 2 Diagrams, 14 Charts, 3 Graphs; Document Type: Article'
SU Authors
  1. Freddie  Acosta
    8 Acosta