Determinants of Outsourcing of Information Technology Services: a Case Study of Firms Listed at the Nairobi Stock Exchange
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Date
2013-02-20
Authors
Were, Collins Ojiambo
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Abstract
Information Technology (IT) within organizations has been identified as a tool for
building competitive edge in the market. Rapid technological change often lead to
frequent obsolescence of information technology used by organisations, therefore the
frequent need for investment in information technology. Companies have therefore been
at crossroads trying to decide whether to outsource information technology services or
provide them inhouse.
The purpose of the study therefore was to investigate the extent to which firms listed at
the Nairobi Stock Exchange outsource their information Technology Services. There are
forty seven companies listed in the main investment market of the Nairobi Stock
Exchange. A sample size of 30% of the companies listed at the Nairobi Stock Exchange
main investment market was considered in this study.
Data collection was done by use of questionnaires which were administered to the
Information Technology Managers. A total of sixteen questionnaires were distributed to
the sixteen companies sampled from a list of companies registered at the airobi Stock
Exchange. All the companies responded representing 100% response rate.
Research findings revealed that all the companies outsource information technology
services and it was mainly influenced by the need to focus on core business and access to
expert services. Due diligence was exercised when selecting service providers and the
companies entered into service level agreement to ensure performance was adhered to by
the service providers.
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Arising from the findings, it is suggested that a similar study should be conducted to
establish the determinants of outsourcing of other non- core services other than
information technology services.
Description
Department of Business Administration,2011