BUSINESS PROCESS OUTSOURCING AND ITS EFFECT ON FINANCIAL PERFORMANCE -A CASE OF KENYA POWER AND LIGHTING COMPANY

CAROLINE NKIROTE GACHEKE

Abstract


This research was aimed at finding out how Kenya Power can improve financial performance through Business Process Outsourcing. The problem being investigated was why many organizations are not obtaining the financial benefits which are the major driver of outsourcing. The objectives of the study were; to determine how selection of BPO opportunities influence financial performance of Kenya Power and to establish how cost management in BPO affect financial performance of Kenya Power.

The target population was employees at Kenya power Head Quarters. The sample was 84neand Middle level management a strategic decision which is made and implemented by senior personell.  employees from Business Strategy department, Supply Chain department, Finance department and Customer Service departments at KPLC. A stratified random sampling technique was used for respondents in the target population. A random sample was drawn from each stratum. This sampling method ensures that each stratum is represented proportionally in the sample. The questionnaire was the principal tool in collecting primary data. The questionnaire contained structured, semi structured and unstructured questions. The study targeted 84 respondents and managed to obtain responses from 78 of them thus representing 93% response rate. The data was analysed using IBM SPSS Statistics Package version 20. To ensure reliability of the instrument Cronbach’s Alpha was used. The study findings indicated that there is a significant positive relationship between the BPO aspects namely:  Selection of BPO opportunities and cost management in BPO. The findings also indicated that selection of BPO opportunities and cost management of BPO respectively influenced the financial performance of KPLC.

 

Key Words: Business Process, Outsourcing, Financial Performance


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