Strategic Outsourcing and Service Delivery: A Case of Kericho Water and Sanitation Company (KEWASCO) in Kenya.
Edna, Bii Chepkoech
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The current scarcity of public resources in world economies has led to adoption of strict measures to ensure efficiency in service delivery. The pressure to deliver more for less has steered managers to focus towards outsourcing strategy, which has attracted much attention in the recent years owing its important role of efficiency in service delivery across all sectors of economy. This study main aim is to establish the relationship between strategic outsourcing and service delivery at Kericho Water and Sanitation Company (KEWASCO) in Kenya. The study sought to determine effects of outsourcing security services, revenue collection and maintenance on service delivery. The research angered on four main theories: Agency Theory, Core competency Theory, Resource-Based View theory and Transaction cost theory. The study employed descriptive research design. This study targeted a population of 17232 KEWASCO stakeholders from which a representative sample size of 175 was chosen through various sampling techniques. First, purposeful sampling technique was applied on the company employees and water officials while clustering and stratified random sampling was applied on the organization’s customers. Questionnaires and interview guides formed main instruments for data collection. These methods were deemed appropriate as questionnaire use is time saving and flexible, and interviews allowed in-depth understanding of situation under study. Reliability and validity of data collection instruments was acquired through test-retest scenario where, similar result of reliability coefficient was obtained through pilot study. Data collected was then summarized for analysis, with the aid of Statistical Package for Social Sciences (SPSS) software. Data finding was then presented in frequency tables, percentages and means. Later inferential statistics including; Chi-square and regression were employed for analysis. Based on analysis, the study revealed that outsourced services by the water company had in many ways positively influence key performance indicators including; revenue collection efficiency, cost of production, reduced non-revenue water, consistent supply of quality water, as well as staff productivity. Therefore, study findings conclude that organization under study could be failing to meet the required service delivery targets because of other issues other than failure of the three outsourced functions. The study suggests that firms and in particular Kericho Water and Sanitation Company may consider outsourcing more of its non-core functions. This is because the three outsourced services under investigation in this study have proven to be fruitful in as far as the improvement of service delivery is concerned. The findings further recommend that organizations should review their outsourcing strategies to ensure competent service providers are awarded tenders. As it was found that non competent service providers in maintenance department had not fully offered quality service, resulting in regular pipe leakages and pump failures which led to frequent complaints from customers due to service interruption.