Opportunities and Challenges of business out sourcing at Jimma town governmental organizations

Abstract

The purpose of this research was to assess the opportunities and challenges of business outsourcing at Jimma town governmental organizations. The study covered Commercial bank of Ethiopia (CBE), Jimma University and ethiotelecom. Secondary data from documents and primary data collected through questionnaires and interview were used to address the objectives. The findings of the study show that the outsourced services created the three organizations a great opportunity to save managers cost and time, gave more attention for the core functions of the institutions rather than non- core areas and 85.1%CBE, 76.9%JU and 86.2% ethiotelecom replied the effectiveness of organization increased. On the other side, the outsourced employee did not consider themselves as permanent organization staff and they are worried about their future walk of life, this leads to low employee belongingness and (79.1%CBE, 59.6%JU and 70.7% of ethiotelecom) agreed to loss of control over the service providers. Behaviors like, low morals of those supplied staff as compared to organizations staff and conflict of interest among outsourced and permanent employees especially in case of fringe benefits between the two were the major challenges of the organizations. In addition to these, the results confirm that it takes longer time to select third party service provider especially in Jimma University and ethiotelecom. Finally, it is recommended that the three organizations should deal with the service provider to overcome outsourcing challenges, perk up the outsourcing team through benefits as per the service provider staff; revise the service level agreement and to build morals of outsourced staff. It is also recommended to adapt the best practice and scale up outsourcing strategy to other service giving organizations in the town in order to give quality service and more attention for the core functions of their org