OUTSOURCING AND SERVICE DELIVERY IN NON-GOVERNMENT

ORGANIZATIONS IN UGANDA: THE CASE OF IITA- UGANDA

BY

JANET ANYANGO

13/MMSPSCM/31/031

A DISSERTATION SUBMITTED TO THE SCHOOL OF MANAGEMENT SCIENCES

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD

OF MASTERS DEGREE IN MANAGEMENT STUDIES (PROCUREMENT

AND SUPPLY CHAIN MANAGEMENT) OF UGANDA

MANAGEMENT INSTITUTE (UMI)

FEBRUARY 2019

i
 DECLARATION

I, JANET ANYANGO of Reg. Number: 13/MMSPSCM/31/31, declare that this dissertation is

my own original work and has never been submitted for any academic award in any institution

Signature…………………………………..

Date……………………………………….

Student

i
 APPROVAL

We certify that Janet Anyango has written this dissertation titled: “Outsourcing and service

delivery in non-government organizations in Uganda: the case of IITA- Uganda” under our

supervision. This dissertation has been submitted for examination with our approval as

supervisor

Dr. Godfrey Mugurusi

Uganda Management Institute

Signed…………………………………………

Date:………………………………………...…

Dr. Ivan Twinomuhwezi

Uganda Management Institute

Signed…………………………………………

Date:……………………………………..……

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 DEDICATION

I dedicate this work to my dear sons, Andrew, Anthony and Arthur for their continued concern

over this desertion writing. And to my Sister Topister who kept reminding me about the deadline

and need to finish this course. May God reward all of them abundantly

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 ACKNOWLEDGEMENT

This piece of work was not my effort alone but a product of contributions from different

individuals. First, I wish to thank the Almighty God for enabling me to complete my research

work successfully.

I extend my sincere gratitude to my supervisors; Dr. Godfrey Mugurusi and Dr. Ivan

Twinomuhwezi for the professionalism, dedication and invaluable advice without which this

work would not have been successfully accomplished.

I am indebted to all respondents from IITA whose information was critical in generating facts for

this research.

In a special way, I would like to thank my entire Family for the support they rendered to enable

me complete this work.

Lastly, am obliged to thank my colleagues Valentine, Maria and Vivian who have been a great

source of inspiration and encouragement to me, specifically Valentine who reviewed my work.

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 TABLES OF CONTENTS

DECLARATION...................................................................................................................i

APPROVAL..........................................................................................................................ii

DEDICATION.....................................................................................................................iii

ACKNOWLEDGEMENT..................................................................................................iv

LIST OF TABLES................................................................................................................x

LIST OF FIGURES.............................................................................................................xi

LIST OF ABBREVIATIONS............................................................................................xii

ABSTRACT.......................................................................................................................xiii

CHAPTER ONE...................................................................................................................1

INTRODUCTION................................................................................................................1

1.0. Introduction..................................................................................................................1

1.1. Background to the study..............................................................................................2

1.1.1. Historical Background..........................................................................................2

1.1.2. Theoretical Background........................................................................................4

1.1.3. Conceptual background........................................................................................5

1.1.4. Contextual Background........................................................................................7

1.2. Statement of the problem.............................................................................................9

1.3. General objective.......................................................................................................10

1.4. Specific objectives of the study.................................................................................10

1.5. Research Questions....................................................................................................10

1.6. Hypothesis..................................................................................................................10

1.7. Conceptual Framework..............................................................................................11

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 1.8. The significance of the study.....................................................................................12

1.9. Justification of the study............................................................................................13

1.10. Scope of the study....................................................................................................14

1.10.1. Content Scope...................................................................................................14

1.10.2. The Geographical Scope...................................................................................14

1.10.3. Time scope........................................................................................................14

1.11. Operational Definitions of Terms and Concepts......................................................15

CHAPTER TWO................................................................................................................16

LITERATURE REVIEW..................................................................................................16

2.0. Introduction................................................................................................................16

2.1. Theoretical Review....................................................................................................16

2.1.1. Core Competence................................................................................................16

2.1.2. Transaction Cost Economies...............................................................................17

2.2. Outsourcing and service delivery...............................................................................20

2.3. Outsourcing decision making processes and service delivery...................................23

2.4. Supplier selection and service delivery......................................................................27

2.5. Contract Management and service delivery...............................................................29

2.6. Summary of Literature review...................................................................................32

CHAPTER THREE............................................................................................................35

METHODOLOGY.............................................................................................................35

3.0. Introduction................................................................................................................35

3.1. Research design.........................................................................................................35

3.2. Study Population........................................................................................................36

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 3.2.1 Sample size and selection....................................................................................36

3.2.2 Sampling techniques and Procedures..............................................................37

3.3 Data Collection Methods............................................................................................38

3.3.1 Questionnaire survey......................................................................................38

3.3.2 Interviewing....................................................................................................39

3.4. Data collection Instruments.......................................................................................40

3.4.1. Questionnaire......................................................................................................40

3.4.2. Interview guide...................................................................................................40

3.4.3. Validity...............................................................................................................40

3.4.4. Reliability............................................................................................................41

3.5 Procedure of data collection........................................................................................42

3.6 Data analysis and Procedure.......................................................................................42

3.6.1 Quantitative Data Analysis.............................................................................43

3.6.2 Qualitative Data Analysis...............................................................................43

3.7. Measure of Variables.................................................................................................43

3.8. Ethical considerations................................................................................................44

CHAPTER FOUR..............................................................................................................45

PRESENTATION, ANALYSIS AND INTERPRETATION OF FINDINGS..............45

4.0 Introduction.................................................................................................................45

4.1 Response rate of respondents......................................................................................45

4.2 Background Information of the Respondents.............................................................46

4.2.1 Age of respondents..............................................................................................46

4.2.2 Gender of respondents.........................................................................................47

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 4.2.3 Level of education................................................................................................48

4.2.4 Respondents length of service.............................................................................48

4.2.5 The effect of decision making process on service delivery at IITA....................49

4.3. Correlation coefficient matrix for outsourcing decision making and service delivery

...........................................................................................................................................55

4.3.1 Regression between outsource decision making and service delivery................55

4.3.2. The effect of supplier selection on service delivery at IITA..............................56

4.4 Correlation coefficient matrix for supplier selection and service delivery.................62

4.4.1. Regression between supplier selection and service delivery..............................62

4.4.2 The effect of contract management on service delivery at IITA.........................63

4.5 Correlation coefficient matrix for outsourcing and service delivery..........................69

4.5.1. Regression between contract management and service delivery........................70

4.5.2. Service Delivery at IITA-Uganda.......................................................................71

4.6. Correlation coefficient matrix for outsourcing and service delivery.........................76

4.6.1 Outsourcing decision making and service delivery.............................................76

4.6.2 Supplier selection and service delivery................................................................77

4.6.3 Contract management and service delivery.........................................................77

4.7 Multiple regression analysis for outsourcing and service delivery.............................77

CHAPTER FIVE................................................................................................................80

SUMMARY, DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS OF

THE STUDY.......................................................................................................................80

5.0. Introduction................................................................................................................80

5.1. Summary of major findings.......................................................................................80

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 5.1.1. The effect of out sourcing decision making on service delivery........................80

5.1.2. The effect of supplier selection on service delivery...........................................81

5.1.3 Contract management and service delivery.........................................................82

5.2. Discussion..................................................................................................................83

5.2.1. The effect of outsourcing decision-making process on service delivery............83

5.2.2. Supplier selection and service delivery...............................................................86

5.2.3. Contract management and service delivery........................................................88

5.3. Conclusions................................................................................................................90

5.3.1. Outsourcing decision making and service delivery............................................90

5.3.2. Supplier selection and service delivery...............................................................90

5.3.3. Contract management and service delivery........................................................91

5.4. Recommendations......................................................................................................91

5.5. Area for further research............................................................................................92

REFERENCES...................................................................................................................93

APPENDICES........................................................................................................................i

Appendix I. Questionnaire for staff members.....................................................................i

Appendix II: Interview Guide for Key Informants about Outsourcing of its services at

IITA.....................................................................................................................................i

Appendix III:Introductory Letter.........................................................................................i

Appendix IV: Field Research Letter....................................................................................i

Appendix V: Anti -Plagiarism Report.................................................................................i

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 LIST OF TABLES

Table 3. 1: Population and sample size selection..........................................................................37

Table 3. 2: Content Validity Index (CVI) of Survey items...........................................................41

Table 3. 3: Cronbach's Alpha of survey items...............................................................................42

Table 4. 1: Response rate of respondents......................................................................................45

Table 4. 2: Age of respondents......................................................................................................46

Table 4. 3: Gender of the respondents...........................................................................................47

Table 4. 4: Respondents’ Level of Education................................................................................48

Table 4. 5: Respondents length of service.....................................................................................48

Table 4. 6: Responses on decision making process on service delivery at IITA...........................49

Table 4. 7: Pearson (r) correlation coefficient matrix of the component variables......................55

Table 4. 8: Regression analysis for outsource decision making and service delivery...................55

Table 4. 9: Responses on supplier selection on service delivery at IITA......................................56

Table 4. 10: Pearson (r) correlation coefficient matrix of the component variables.....................62

Table 4. 11: Regression analysis for supplier selection and service delivery..............................63

Table 4. 12: Responses on contract management on service delivery at IITA.............................64

Table 4. 13: Pearson (r) correlation coefficient matrix of the component variables.....................69

Table 4. 14: Regression analysis for contract management and service delivery.........................70

Table 4. 15: Responses on Service Delivery at IITA-Uganda......................................................71

Table 4. 16: Pearson (r) correlation coefficient matrix of the component variables.....................76

Table 4. 17: Regression Analysis of the component variables.....................................................78

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 LIST OF FIGURES

Figure 1: Conceptual frame work illustration of how the IV will affects the DV........................11

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 LIST OF ABBREVIATIONS

CVI Content Validity Index

DV Dependent Variable

EBT Electronic Benefits Transfer Growth

IBM International Business Machine

ICT Information Computer Technology

IGOs International Governmental Organizations

IITA International Institute of Tropical Agriculture

IV Independent Variable

NGOs Non-Governmental Organization

SDF Service Delivery Framework

SPSS Statistical Package for Social Scientists

UMI Uganda Management Institute

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 ABSTRACT

This study aimed at examining the effects of outsourcing strategy on service delivery of Non-

Governmental Organizations (NGOs) and specifically the study focused on IITA. Specifically,

the objectives of this study were to examine the effects of outsourcing decision making process,

supplier selection and contract management on service delivery at IITA- Uganda. The study

adopted a case study approach research design with a blend of quantitative and qualitative

approaches to collect and analyse data. In total, a sample of 42 respondents participated in the

study. The researcher used both primary and secondary sources of data. Data was collected using

questionnaires and interview guides. Quantitative data was analyzed using Pearson correlation

coefficient to determine the relationship between variables, while regression analysis was used to

establish the extent to which independent variables affected the dependent variable. Findings

revealed that outsourcing decision making (r= 621**), supplier selection (r= 681**) and

contract management (r= 806**) Contract management had the strongest positive effect on

service delivery, accounting for 64.0% variations in service delivery, which means that other

factors accounted for 36% variations in service delivery. This is because contract management

facilitates the achievement of improved delivery while defining details of quality, efficiency,

timing, and method of delivery of the corresponding inputs and outputs required from both

parties to support the out sourced process. It was concluded that improvement in outsourcing

decision-making, supplier selection and contract management significantly enhance service

delivery. The study recommends that management of most NGOs including IITA should always

seek views of staff members and carry out adequate planning before deciding to outsource goods

and services, not just IT alone. The study further recommends that NGOs including IITA should

always adhere to the criteria of selecting the supplier of IT and consider the reliability of

xiii
potential suppliers who have the ability and competency to supply the required goods and

services as per the stated specifications. NGOs should always make procurement plans at the

start of the financial year to facilitate improved service delivery. Further areas of research should

focus on factors that affect the adoption of IT and the quality of service delivery in outsourcing.

Or the impact of outsourcing strategies on quality of service delivery in non-Government

Organizations.

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 CHAPTER ONE

INTRODUCTION

1.0. Introduction

The study investigated Outsourcing strategy and Service delivery in Non-Government

Organizations, a case of International Institute of Tropical Agriculture (IITA).

Out sourcing has become popular concept of recent both in practice and theory as one of the appr

oaches that can improve service delivery(Gay&Essinger,2000).It has been defined as strategic

use of external resources to perform activities traditionally handled internally by staff and

resources (Baily et al. 2008).

The use of outsourcing strategy in non-Government organizations has been perceived to reduce

costs, increase efficiency and improve service delivery of the buying organizations (Linder, Cole

and Jacobson, 2002). Various non-Government Organization in Uganda have undertaken

outsourcing strategy to reduce costs, increase flexibility, access to increased expertise,

improvement of efficiency, quality of services, and reduce investment on internal capacity of

none core functions and improve internal user satisfaction (Agaba, 2007). According to Burnes

and Anastasiadis (2003), Simmonds and Gibson (2006), entities outsource non-core functions

such as, Information and Communication technology (ICT), Vehicle repairs, Security, cleaning,

management of waste, courier, and catering services for service delivery improvement and

reduce investment on the same internally thus reducing operational costs.

IITA’s core function is Agriculture Research. Due to the nature of activities that requires

massive Knowledge, ICT was the major candidate of Outsource among others to support service

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delivery. ICT provided a unified communications and integration of telecommunications

facilities, computer software and hardware to enable users to access, store, transmit, and

manipulate information for better service delivery within organizations (Onuma, 2007).

There are huge benefits of outsourcing strategy including; cost reduction and acquiring expertise

among others (Vitasek et. al., 2012). However, IITA employees have not gained much from the

current ICT outsourcing strategy due to high cost, unreliable expertise and a lack of development

of a service delivery framework (SDF) to offer quality service delivery. The study sought to

examine the effects of outsourcing and its contribution to service delivery. The outcome of the

study has revealed that there is a positive contribution of outsourcing to service delivery. Advise

in form of recommendation has been given to IITA on areas that require further studies for

instance establishing the effect of different outsourcing methods on services delivery., and

deciding the best strategy either to continue with outsourcing or opt for in-house provision of

ICT services, to grow internal expertise whichever is cheaper considering total cost approach, so

as to attain unmatched service delivery level applicable to both the consumer and business

applications (Keithet. Al, 2016).

1.1. Background to the study

1.1.1. Historical Background

The outsourcing strategy dates way back from the era of the industrial revolution in the 18th

century 1868. Outsourcing history is deeply rooted in the historical growth of the modern

business enterprise, which sprang up in the error of industrial revolution Adam Smith, (1776).

With the coming of the industrial revolution, the business enterprises grew to levels where they

realized the need to go to outsource expert workers and markets for their goods. For instance

2
Japan’s quick path to modernization post the 1868 industrial revolution resulted in the hiring of

foreign Engineers and technicians to set up factory systems and teach local Japanese how to run

high-tech equipment (Carl Mosk, 2000).

Outsourcing was not formally recognized as a business strategy until 1989 (Mullin, 1996). In the

1990s, organizations began to focus more on cost-saving measures, and started outsourcing

functions necessary to operate a company, not necessarily related to the specific core business.

(Burt et al 2010). Most of the companies started to contract emerging service companies to

deliver none core functions for instance; information Technology, accounting, human resource,

internal mail distribution, security and mechanical services. This was encouraged in most cases

to keep the operation costs low and to allow the allocation of available financial and human

resources to core business activities, (Burt, et al., 2010)

Outsourcing has been growing as an important component of business operation, though the

concept is relatively new in Uganda and its applicability is not yet common, (Mwelu et al., 2014)

Until 2010, International Institute of Tropical Agriculture (IITA) outsourced goods and services

not for strategic purposes but as a general procurement practice. With the downsizing reforms

that started taking place (Country Strategy Report, 2009), IITA management decided that

outsourcing was to become strategic due to the limited financial resources and lack of internal

capacity. In this practice ICT was the selected candidate for outsourcing given its strategic nature

in providing support services to support their core research activities in Agriculture. The main

objective of adapting outsourcing was to continue in business with increased efficiency, reduce

cost on staffing, thereby freeing both human and financial resources to concentrate on core

3
function. The main candidate identified for outsourcing was the Information and

Communications Technology (ICT), due to the fact that it was required to facilitate search for

research materials/ knowledge and use in communication

1.1.2. Theoretical Background

This study was guided by two theories: the Core Competencies theory of (Prahald and Hamel,

1990) and the Total Cost Economies (TCE) Theory of Williamson (1985). To begin with, the

Core Competence theory of (Prahald and Hamel, 1990) proposes actions to be taken by firms to

attain comparative advantage in the market. It emphasizes the core competences of an

organization should be kept in-house, and only none core functions should be considered for

outsourcing. The core competency theory assumes that firms play to the strength in areas or

functions in which they have core competencies. Besides, the theory defines what forms a core

competency as being not easy for competitors to imitate, can be reused across the markets which

the firm caters for and the products it makes, that adds value to the end users who get benefits

from it.. Companies must position their strategies to tap into the core competencies, which

should be the fundamental basis for value addition.

The theory is useful in guiding the organization to identify and deciding none core functions that

can be outsourced, to avoid losing control over the core competencies. IITA’s core competence

is Agricultural Research. For this case the candidate for outsourcing included information

Technology, Cleaning, Mechanical and security, Courier services to support core competencies

service delivery. This research focused on outsourcing of ICT services and its effect on service

delivery at IITA. Although the Core Competence Theory (CCT) emphasizes outsourcing of

none core functions, it does not take into consideration the possible loss of expertise, control and

4
confidentiality to external service providers due to over dependency on them. It’s however

important in explaining the role of specialized providers in service delivery.

Secondly, the Transaction Cost Economies (TCE) Williamson (1985)states that Outsourcing

Strategy leads to low operation costs due to economies of scale. The theory is also dominant in

explaining Outsourcing as an economic approach to achieving cost efficiency. It further asserts

that this is achieved by assigning transactions to different Governance methods. The TCE was

relevant to this study because it emphasis the low costs incurred due to economies of scale

enjoyed by the suppliers. However, it does not consider the likely costs incurred on negotiating,

monitoring, enforcing and supervising out sourced contractors to ensure quality of the service.

The theory is also criticized on the assumptions that bounded rationality and uncertainty exists.

Williams Model views people as being passive and defensive when confronted with matters on

an uncertain environment and looking into two extremes methods of facilitating transaction that

do not really exist

1.1.3. Conceptual background

The focus of this study was on Outsourcing strategy as an independent variable, while Service

delivery was the dependent variable. In this study, outsourcing was conceptualized in terms of

decision making, supplier selection and contract management. The dependent variable service

delivery was assessed on efficiency, quality, and timeliness. According to (Ahimbisibwe, 2009),

as p e c t s o f service delivery focusing on efficiency, quality and timeliness ofservices delivery

should be defined in accordance with the function being outsourced if the best of it is to be

achieved in service delivery.

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In outsourcing, management is concerned with defining organization goals and deciding on what

an organization wants to concentrate on as their core activities. (Burt et al. (2010) Outsourcing

therefore is handy in filling the gap to provide none core competencies.

The objective of outsourcing is improved efficiency, reducing costs and allowing internal

resources both human and Financial to be allocated to core competencies. The Outsourcing

decisions are strategic in nature (Baily et al., 2008). They should therefore be made at managerial

level if the objectives of outsourcing are to be achieved. The organization will need to define

whether to outsource fully or to retain some aspects of the services internally through supervision

or management. Outsourcing starts with the firm making an analysis to identify its major

strength of its business (Burt et al., 2010). IITA defined their core as Agriculture research, thus

identifying ICT services as the major candidate for outsourcing (Management report, 2009).

According to Burt et al. (2010),a contract must involve defining the procedure, service level

agreements and set procedure on benefiting from the outsourced services, set standard time

within which to deliver the services, define responsibilities of the parties, regulations,

compliance, supervision mechanisms and the payment procedure. The theory of Transaction

Cost Economies (Williamson, 1979) talks about the creation of governance structure for

contractual relations, the creation of which guides the contract performance by defining the

output level, duties and responsibilities, by way of creating service level agreements, reporting

channel and feedback evaluation reports.

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1.1.4. Contextual Background

The International Institute of Tropical Agriculture (IITA) is an Africa-based international

Agriculture research and development organization. Established in 1967. IITA is governed by a

board of trustees, with Headquarters in Ibadan -Nigeria, and has established research station at

Namulonge, and an Administrative office at Naguru Kampala, in Uganda. IITA focuses on

Agricultural Research and is a member of Consultative Group Initiatives on Agriculture

Research (CGIAR), a global agriculture research partnership for a food secure future. IITA is a

not-for-profit institution that generates agricultural innovations to meet Africa’s most pressing

challenges of hunger, malnutrition, poverty, and natural resource degradation. Working with

various partners across sub-Saharan Africa, IITA, aims at improving livelihoods, enhancing food

and nutrition security, increase employment, and preserve natural resource integrity. IITA’s

vision is to be Africa’s leading research partner in finding solutions for hunger and poverty,

reducing under nutrition, and increasing a more sustainable management of natural resources. In

Uganda, the biggest Partner IITA works with in Collaboration, is the Government of Uganda

through its arm of Agricultural Research, the National Agriculture Research Organization

(NARO). IITA research activities are based in four Africa regions, East Africa Hub, West Africa

hub, Southern Africa hub and Central Africa hub. For Purposes of this study, the focus will be on

IITA-Uganda, under East Africa hub.

IITA was extended to Uganda in 1992, to enhance food security, income and well-being of

resource-poor people by conducting research activities to increase agricultural production,

improve food production systems, for improved livelihoods, and sustainable management of

natural resources. In partnership with National and International collaborators, IITA has

7
supported NARO, in areas of technical assistance towards capacity building, and crop breeding.

Together with NARO several improved crops varieties have been achieved such as the 27

NARITA, banana species that include Kiwangaazi. (Science day Report, 2017). This has all

been possible by IITA carrying out research activities through crop Breeding, Natural Resources

Management, Systems Agriculture, and Plant health, in collaboration with NARO. IITA as an

Institution does not have mandate to release improved crop varieties to farmer, the Institute

works closely with NARO, whose mandate includes evaluation of varieties and release to

farmers for both commercial and domestic consumption. IITA has supported its service delivery

through outsourcing strategy of IT services.

The current outsourcing strategy affects service delivery in NGOs and other organizations due to

poor development of strategic business partners that lack core competence hence increased costs

and poor skilled manpower from outsourcing. Today in Uganda and elsewhere, outsourcing is

affected by poor partnerships (Keith, et l, 2016) which affects service delivery in many

organizations. IITA engages ICT partnerships in outsourcing to ensure quality service delivery.

Globally, ICT is used to support organizations through software and hardware enabling users to

access, store, transmit, and manipulate information for quality service delivery (Onuma, 2007).

The gap in various organizations are the many contradictory arguments on the best way of

outsourcing to ensure service delivery. While many scholars (Davies, 2014; Hasmath et al.,

2015) argue that NGO-led model of outsourcing adds some value to service delivery some have

criticized this NGO-led model for not adding any value to service delivery (Namara, 2009).

8
In most cases, NGO’s structure are small and characterized by limited internal human resource

capacity, as compared to their counter parts in Public Sectors. In the same way, IITA is affected

by lack of internal capacity in ICT expertise. They therefore concentrate on core service delivery

and resort to outsourcing of ICT function to support service delivery.

Some studies have argued that Outsourcing adds value to NGOs, service delivery, while others

have rejected this argument, In view of the above, this study was proposed to examine the effects

of outsourcing to service delivery in NGOs, using a case study of IITA-Uganda, in which little

was known about the effects of outsourcing contribution to service delivery.

1.2. Statement of the problem

Outsourcing is one of the procurement practices that NGOs have adopted in the recent times to

support core business service delivery by freeing resources both human and financial to

concentrate on core competencies. The strategic goals of outsourcing include improved

efficiencies, lower costs, and a greater ability to achieve a competitive advantage from those who

can provide the specific product competitively (Burt et al, 2010).

As organizations define their core competencies, it becomes expensive to keep none core

competences in house as this does not free up resources for increased investment in core

competencies, as a result decision are made to outsource none core functions. This process has

also led to organizations questioning what core competences describe them and those that don’t,

hence the increasing impetus of the outsourcing trend Prahald and Hamel (1990). However,

organization cannot outsource for goods and services, without making decisions, selecting

suppliers and managing contracts in service delivery.

9
In 2010 IITA defined its core business as Agriculture Research (AR), (Management report,

2009), and as a result downsized to remove ICT services from their mainstream service delivery,

Due to lack of internal capacity in ICT after downsizing as indicated above, IITA decided to

adopt strategy to outsource ICT through supplier selection and contract management to support

core service delivery to improve efficiency, thus reducing costs on internal staff investment.

Despite the adaption of outsourcing strategy, there was little known about outsourcing strategy

and how it contributes to service delivery at IITA. This is the gap that study was proposed to fill

by examining the effects of outsourcing strategy and its contribution to service delivery.

1.3. General objective

To examine the effects of outsourcing strategy on service delivery

1.4. Specific objectives of the study

a) To examine the effect of outsourcing decision-making process on service delivery at IITA-

Uganda

b) To examine the effect of supplier selection on service delivery at IITA- Uganda.

c) To examine the effect of contract management on service delivery at IITA- Uganda.

1.5. Research Questions

a) What is the effect of outsourcing decision-making process on service delivery at IITA?

b) What is the effect of supplier selection on service delivery at IITA?

c) What is the effect of contract management on service delivery at IITA?

1.6. Hypothesis

The researcher set out to test how:

10
a) Decision making has a significant positive effect on service delivery

b) Supplier selection has a significant positive effect on service delivery

c) Contract management has a significant positive effect on service delivery.

1.7. Conceptual Framework

The conceptual frame work of this study was based on Outsourcing as the independent variable

(IV) while service delivery was the dependent variable (DV). Figure 1 below, shows the

independent variable outsourcing focusing on decision making process, selection of suppliers

and contract management, and how it affects service delivery, while the dependent variable,

service delivery was measured by efficiency, quality and timeliness.

Figure 1: Conceptual frame work illustration of how the IV will affects the DV.

Outsourcing Strategy Service Delivery

Outsourcing decision making

 Goal setting/planning
 Identification of outsourcing
candidates

Supplier Selection
 Sourcing for Suppliers  Efficiency
 Choice of Bidding Methods  Quality
 Evaluation and approval of
 Timeliness
suppliers based on competence
and commitment

Contract Management
 Defining roles in contract
 Set service level agreements
 Perform, monitor and evaluate
contract
 Reporting and feed back

Source: Adopted from literature and modified by researcher.

11
The conceptual framework showed that outsourcing strategy was conceptualized into

outsourcing decision making and identification of outsourcing candidates. Supplier selection

encompasses sourcing for suppliers, choice of bidding methods, evaluation and approval of

suppliers based on competence and commitment. Lever (1999), states that supplier selection is

based on their competitive advantage and competencies in line with outsourcing organizations’

requirements. This was in line with the core competency theory which states that firms play to

strength in areas of their core competency. Contract management involves defining roles in

contract, setting service level agreements, performing, monitoring and evaluating the contract as

well as reporting feedback. According to Willococks and Lester (1997), Service Level

Agreements (SLA) may be written simplistically when organizations are new in outsourcing

relationships. It is further conceptualized that an effective outsourcing strategy enhances service

delivery in terms of efficiency, quality and timeliness.

1.8. The significance of the study

The study will help decision makers and other stakeholders in designing workable solutions to

improve outsourcing strategy and service delivery which will bridge the gap in understanding

better the effects of outsourcing on service delivery. It aimed at informing management of IITA

to review their decision-making process about outsourcing strategy and decide whether to

continue or to provide the services internally.

The study provided management with knowledge about Supplier selection and evaluation

process to determine whether outsourcing was cheaper on basis of total cost approach, how it

affected service delivery and how the organization could become effective on service delivery

12
based on the competent and effective supplier selection. Advice was given to management on

how to assess the competences of supplier and how to have an independent contract and service

level agreement with the selected suppliers.

The study being the first of its kind at IITA. It investigated effects of outsourcing strategy on

service delivery. This thus created new knowledge that will be used to inform Management for

future decision making regarding outsourcing. Advised management on importance of

participating in outsourcing exercise and creating SLA in monitoring and evaluation of suppliers’

services and management of outsourced contracts for better service delivery.

It adds on to the existing knowledge about procurement outsourcing for reference by future

Researchers and inform Management of different None Government Organizations on how to

handle Supplier selection process and manage service suppliers of outsourced contracts, as well

as give recommendations on what the best practice should be when considering the aspect of

efficiency, quality and timeliness in service delivery. The findings of this study were important

in they added on to the existing knowledge and will also be important to IITA by providing

information in form of recommendations depending as per the outcomes. IITA will decide

whether to continue outsourcing support services such as ICT or to provide the same internally

by hiring experts

1.9. Justification of the study

Whereas some studies (Davies, 2014; Hasmath et al., 2015) have concluded that outsourcing

strategy adds values to service delivery others (Namara, 2004) refuted this argument. Relatedly,

(Ahimbisibwe, 2009) noted that organizations are increasingly adopting outsourcing strategy for

13
cost reduction, increase in customer satisfaction. Besides, such information gaps are also not

explored in context of Uganda in NGO sphere such as IITA where outsourcing has been applied.

Although IITA-Uganda, adopted the outsourcing strategy in terms of decision making, supplier

selection and contract management, the impact it had on service delivery was unknown. This

study was therefore important to provide information to IITA on whether to continue outsourcing

or to provide the same internally by hiring competence staff.

1.10. Scope of the study

1.10.1. Content Scope

In this study outsourcing is an independent variable (IV) on which service delivery is examined

as a dependent variable (DV).The study aimed at establishing the effects of outsourcing on

service delivery and establish whether there is a relationship between the IV, focusing on

decision making, supplier selection, contract management and how it affects the dependent

variable (DV) Service delivery measured by efficiency, quality, and timeliness, while the focus

of major outsourced candidate is on Information and communications Technology (ICT).

1.10.2. The Geographical Scope

The study was conducted at IITA-Uganda, plot 15, East Naguru Road, with some reference to

IITA HQ in Ibadan being the policy formulators. IITA Uganda has various staff categories,

based in Uganda who include; internationally recruited staff (IRS), Nationally Recruited Staff

(NRS), Short Term Contract Staff (STCS) and various casual workers. 1.10.3. Time scope

For purposes of this study, the period under consideration was limited to operation period 2011 –

2015, being the period IITA has been actively involved in use of outsourcing strategy.

Management report (2009).

14
1.11. Operational Definitions of Terms and Concepts

The term researcher was used to mean the person conducting the study. While outsourcing is the

alternative means of getting support services delivered by an outsider. The focus was on

decision making, Supplier selection and contract management, and considering service delivery

as the performance of support tasks to the organization’s core competencies.

Outsourcing Strategy: In this study referred to strategic use of outside resources to perform

activities traditionally handled by internal staff and resources (Baily et al., 2008).

Decision making: Is the process of making a conscious choice between two or more rational

alternatives to select the one that produces the most desirable benefits relative to unwanted

consequences (costs). In this study, decision making refers to setting goals and identifying

outsourcing candidates to offer the required services.

Supplier Selection: Is the process by which firms identify, evaluate, and contract with suppliers.

At IITA-Uganda, supplier selection refers to sourcing for suppliers, choosing the bidding

methods and approving suppliers based on competences and commitment,

Contract management: Is the process by which an outsourcing organization will manage

contract creation, execution and analysis to maximize operational and financial performance of

the outsourced while delivering a service contracted for, to reduce financial risk. In this study,

contract management refers to the definition of roles in contract, setting service level

agreements, monitoring and evaluating the contract as well as reporting and feedback.

Service Delivery: Is the provision of what is required to a consumer on time. (Kwikiriza., 2012)

15
 CHAPTER TWO

LITERATURE REVIEW

2.0. Introduction

This chapter presented a review of literature relating to outsourcing and service delivery. The

review established an account of what other scholars have written about outsourcing. The study

focused on outsourcing strategy and its contribution to Service delivery. The Outsourced

candidate was Information Technology. The literature reviewed was from text books, journals,

organization reports, operation manuals, policies and organization reports, focusing on various

concepts of decision making, supplier selection, contract management and service delivery.

2.1. Theoretical Review

The study was guided by two theories. The Core competence theory (Prahald& Hamel, 1990)

and Transaction Cost Economies Theory (Williamson, 1985). The Core Competence Theory

(CCT) emphasizes outsourcing of none core functions. It’s important in explaining the role of

specialized providers in service delivery.

2.1.1. Core Competence

The core competency theory considers that firms concentrate on their competences in areas of

comparative advantages. It goes further to define what forms core competency and states that

this should not be easy for competitors to imitate. It also says that firms must determine their

competitive advantage for value addition to package their products adding value for the end users

to get benefit from it.

The core competence theory is useful in guiding the organization to identify and decide on none

core functions that can be outsourced, to avoid losing control over core competencies of business

functions that should be retained in-house.

16
According to Hamel and Prahalad (1990), the core competence theory gives three tests to assess

true core competences. The tests are relevance, difficult to imitate and breadth of application.

The competence must give customers the satisfaction that strongly influences them to prefer a

company’s products or services to those of the competitor. It should make it hard to imitate

allowing an organization to provide products which are better in quality thus creating room for

continuous improvement to sustain your competitive position as well as being able to open up

potential to increase your market share to significantly and increase your growth. For instance,

an organization may consider strong industry expertise and knowledge to be a core competence

in serving your customers. Though, if competitors in the industry have similar expertise, services

will not be considered as a core competence. However, it may make it difficult for new

competitors to join the market, otherwise, it's unlikely to help you much in moving into new

markets, with established experts.

However, the theory of core competence is criticized on grounds that it does not take into

consideration the possible loss of expertise control and confidentiality to external service

providers due to over dependency on them (Mushega, 2010). Though it may be stressed here that

control will be lost only when the contractor of the outsourced function is note monitored and the

relationship is poorly managed. The loss of control may not be managed due to lack of time by

management to enforce it.

2.1.2. Transaction Cost Economies.

Transaction Cost Economies (TCE) states that Outsourcing Strategy leads to low operation

costs due to economies of scale (Williamson, 1985). The theory asserts that costs of transactions

determine how effective the market structure will be. It further states that when an organization

17
determines what market structure is more effective, then it will decide whether to outsource or to

produce the good/services internally.

The theory is dominant in explaining Outsourcing as an economic approach to achieving cost

efficiency. It further asserts that this is achieved by assigning transactions to different

governance methods. The role played by core or specialized competencies is perceived to be a

possible cost reducing agent, as well as a source of value addition to an organization. Strategic

decision makers are advised to assess the cost of providing the service internally before deciding

to outsource as well as paying critical attention to the transaction costs associated with

outsourcing. The emphasis of the Total Cost Economies theory (TCE) is the low costs incurred

due to economies of scale enjoyed by the suppliers who purchase in bulky (Williamson, 1985).

On the other hand, it does not consider the likely cost incurred on negotiating, monitoring,

enforcing, supervising and losing direct control over the out sourced contracts to ensure quality

of the services. Nor does it consider the fact that though the suppliers may enjoy economies of

scale, it may not necessarily mean that they will in turn supply to their clients at low costs, since

in most cases the suppliers are likely to be private Sectors vendors whose primary objective is to

maximize profits (Kajoka, 2012).

Though the TCE emphasizes that if the external costs are lower than the internal transaction

costs, then the organization costs will be reduced by outsourcing, it should be noted that the cost

to an organization are not influenced by reduced prices of supplies alone, but there is need to

look at the costs of business operation in totality to include fixed and other operational over

heads. The TCE theory at the same time assumes that rationality and uncertainty exists.

18
Williams Model views people as being passive and defensive when confronted with matters on

an uncertain environment and considering two extremes methods of facilitating transaction that

do not really exist (Williamson, 1985).

The Agency cost theory supports the TCE as it emphasizes the risk that both the recipient and the

supplier must deal with, based on the outcomes of the contracts (Eisenhardt, 1998). The trust

between the supplier and the end user of the services is highly emphasized, which in turn will

determine the kind of contract that must bind the two parties. It may either be one that states

deliverables or results attainment on which payment will be made, or one that emphasizes

payment upon performance certification. The kind of contract made will stipulate the kind of

relationship that will exist between the supplier and the organization and determine the extent of

monitoring and evaluation of the services contracted (Jensen,1983).

If one cannot trust the supplier to deliver a product some months down the line then, it might pay

to ensure that they are doing something (Eisenhardt, 1998). The Agency cost theory helps in

distinguishing between productive and the fairest method of minimizing risks for supplier and

outsourcing organization.

The Institutional influence is powerful in explaining organizational phenomena in an industry

where structures are solid, external regulations are strong and practices are established

(Rundquist, 2007). When applied to the context of outsourcing, institutional influence

arguments to the extent outsourcing practices should reflect the participant’s unique features

versus imitating industrial best practices, focusing on contingency factors that give the necessary

tradeoff between industrial best practices and participants unique features. DiMaggio and

19
Powell (1983) suggested that suppliers, customers, competitors and regulatory authorities are the

four institutions that influence organizations and forming part of the supply chain. Feldman,

2001) asserts that closed contacts between institutions lead to stronger conformity.

Total Cost Theory (TCT) asserts that Organization cost of various transactions determines what

governance structure either the hierarchy or the market is more effective. Charms (2000) states

that the decision maker must weigh the expertise of the product and service provider, as well as

their terms of providing the service among other factors.

This study agrees with the theories to the extended that the objective of outsourcing should not

be reduced to costs alone, but consider other aspects of outsourcing such as way of improving

quality of service delivery, efficiency, governance and market structure.

2.2. Outsourcing and service delivery

Outsourcing may be divided into two broad categories of the business process. Knowledge

Process Outsourcing (KPO) and Business Process Outsourcing (BPO). In BPO, tasks are

outsourced (Gilley & Rasheed, 2010). For example, outsourcing of Information Technology

services. This process may be either back or front office functions which means customer

oriented work such as marketing and customer service, telephone call answering, and technical

support, while internal work such as billing and purchasing may be in back office category. For

instance, activities that involve carrying out standardized process for clients. KPO calls for work

that requires high level involvement by workers. The worker has to employee high level of

technical, and analytical skills and research to enable making decisions of high level than BPO

work. Examples include; Research in pharmaceutical development of patents and intellectual

20
property rights, simulation and animations. Apart from BPO, and KPO. Another major category

of outsourced function has been Information Technology outsourcing (ITO). This has been of

increasing interest in privatization and business integration which has led to organizations, to

turn to outsourcing as a way of improving their service delivery. Yet, despite the growing

emphasis of outsourcing, researchers are unable to pinpoint empirically to systematic evidence of

outsourcing effects on organization service delivery statistics by using ‘hard’ data. The available

research refers to outsourcing effects erratically as a conceptual combination of reducing costs,

improving efficiency, quality, production, and profitability improvement. Subjective “soft data”

involving self-report data and perceptions have dominated the current outsourcing research

literature (Jiang & Quereshi, 2016).

Business entities around the world are increasingly adopting outsourcing as strategic

management tool that can be taken advantage of, to allow organizations to focus on core business

(Baily et al., 2008). The current trends, of rightsizing strategies, with renewed focus on core

business activities, companies no longer assume that all services can be provided internally. It is

assumed that competitive advantage may be gained when product or services are produced more

effectively and efficiently by outside suppliers with expertise. Advantages of outsourcing are

both operational and strategic. Operational advantages provide short term benefits while strategic

advantage offer long term contributions in maximizing opportunities (Mushega, 2010). Many

authors (Gilley & Rasheed 2010), support that the main motive of outsourcing, is cost reduction,

because paying for Outsourced services in most cases costs less, as compared to providing the

service internally.

21
According to Malhotra (2015), factors that influence outsourcing decisions are reduction in costs,

and predictability. Because cost will be pre-determined given fixed contract, sharing risk on

technology Investments, access to specialized expertise and perception of efficiency. While

Senior Managers prefer entrusting outside firms with critical tasks, middle level manager will

often argue that they can hire someone to provide the same service cheaply (Mushega, 2010).

The Strategic Manager will know that they will pay less in outsourcing and will as well know the

job will be done more efficiently and effectively and service delivered on time. This means that

sometimes, firms do not outsource, because they will incur low costs, but because the job will be

done quickly, faster and cheaper considering total costs, better output is expected to be achieved

from outsiders who possess technical expertise in the outsourced candidate.

Organizations consider outsourcing when it’s believed certain support functions can be

completed faster and, cheaper or better by outside expertise (Barthelemy &Adist, 2013). Support

functions to an organization, are major candidates for outsourcing. Any competent skills that

creates better customer service, especially directly concerned with service provision to customer,

should be considered core function and should be provided in-house.

Cost efficiency is the primary course for outsourcing. Firms should assess their operations to

determine if costs can be minimized to save resources which can be re-invested in more

competitive processes to create more benefits. Researchers such as (Bin, 2014), urge that

outsourcing is an important source of cost reduction by being able to access economies of scale

22
from suppliers with unique expertise that large outsourced vendors will deliver, and in turn can

boost the organization’s service delivery.

The relevant literature reviewed reveals that outsourcing may affect an organization in various

ways. For instance, competitive advantage, share of investments risk, access to expertise of

outsourced function, reduced operation costs, effective service delivery and improved efficiency.

However, there was no empirical evidence that revealed how outsourcing affects service delivery

in the agriculture sector. In the Ugandan, particularly at IITA, context, outsourcing is based on

the decision-making process, supplier selection and contract management as further explored in

the subsequent subsections.

2.3. Outsourcing decision making processes and service delivery

As organizations grow in business competencies, they start to think and define what their core

businesses are and start to lay strategies on how to perform and survive in competitive business

environment. In this instance, outsourcing of none core business requirements for service

delivery becomes inevitable. Therefore, they have to strategically decide whether to outsource

or provide internally. As a result, many companies, large and small, are considering

outsourcing, what to outsource, and where to outsource. A s p e c t s o f service delivery

focusing on efficiency, quality and timeliness of services delivery should be defined in

accordance to the function being outsourced if the best of is to be achieved in service delivery

(Ahimbisibwe, 2009).

Organization are increasingly adopting outsourcing as a strategy to cost reduction., increase

efficiency and customer satisfaction. This however has not been the case in some instance as

some organization have not been able to realize these objectives of outsourcing due to poor

23
management of the outsourcing relationship. Organizations have considered outsourcing

relationships as merely technical short term solutions, rather than viewing them as long term

strategic plans, which require a well document systematic approach, involving planning,

designing, implementation and operation stages as well as an exit strategy, if outsourcing is to be

effective and succeed (Ahimbisibwe, 2009).

Outsourcing requires planning and strategic decision taken in view of long term perspective,

otherwise an organization may not realize the full potential of outsourcing relationship. The

process of implementing outsourcing should be systematic and documented if it should lead to

favorite outcomes of cost reduction. A decision must be taken on how to plan, implement and

terminate the relationship after the agreed period, if outsourcing is to succeed.

According to Lindsay (2011), outsourcing decisions can lead to competitive advantage to the

business entity. The decisions made to outsource should be formal and well documented at

strategic level by management, if they are to succeed. However, (Mushega, 2010) stated that the

decision should address the role of information and processes in an organization by staff and the

system how each function will participate for the organization to achieve efficiency, quality in a

timely manner regarding service delivery. For instance, whether Management decides to

outsource an entire or part of the function, the decision should consider the important role that

part plays and processes in the organization. Sufficient planning is required for the organization

to handle immediate and future plans, paying special attention to possible needs of innovative

concepts to be available by the organization, and the specific time within which these innovative

ideas will be required.

24
Whereas Fritsch, Geller, Chesler and Hughes (2012), argue that before outsourcing, several ideas

need to be elaborate in a choice to outsource resources (Shalabi et al., 2007) contends that some

of the key issues to pay attention to may be economies of scale, internal expertise, short and long

term, finance and competitive advantages of the provider, ability to manage the functional

relationship, realignment with the internal requirements and need to focus on core business units.

In addition, (Shalabi et al., 2007) noted that some more issues involved in the process may

require to be considered include; effects on organization competitiveness, identifying candidates

for outsourcing, number of suppliers to be considered, evaluating their performance, flexibility in

providing services, age of technology used, ability to return to in-house provision when needed.

In outsourcing, the requirements of the organization, should be aligned with supplier’s

competencies, at the time of negotiating for services so that a contract is developed with a shared

idea (Gibbons, 2015). A focused team of members at different levels of decision making levels

will be essential to assess the organization requirements, while the mix of the team will be

required to manage the contract during implementation. However, Eger, Knudson, Marlowe and

Ogard (2012) observed that outsourcing resulting from good decision making, will provide an

organization with successful benefits. With emphasis on core functions, the organization will be

in position to streamline operations and maintain functions regarded as core. Because of good

planning and decision making, outsourcing will allow organization to increase its market share,

pursue strategic plans for continuous improvement of their competitive advantage. In decision

making, organization should assess the role the candidate to be outsourced plays in service

delivery, and in performance of the core function. Any none core competence function in an

organization can be outsourced (Kajoka, 2014).

25
However, (Goldsmith, 2000) provided some of the first series of questions organization should

answer regarding outsourcing as; what is the company’s significant competitive advantage that

involves bottom line cost, inventory and control. Whether the company has adequate manpower

for these functions such as knowledgeable staff, to support third party help, as well as seeking to

know that organization can make cost benefit analysis of internal staff capacity versus

outsourcing to accomplish the goals. Assessing organization’s core competence may cause

various challenges during the process of identifying the core functions. For challenges to be

overcome, research on decision making process commends that organizations should deliberate

on functions that will benefit from outsourcing in combination with core competencies of

competent suppliers that are to provide outsourced services.

Management needs to evaluate the effect of outsourcing on operations, strategic, structural,

functional, and implementation levels. Outsourcing strategy should include; precise definition of

knowledge of competitors, institutional flexibility and customer service, to include fast response

to impending needs of new and existing customers, which will show the benefits of identifying

core competences while making decisions of outsource, and the importance of establishing a

transition plan toward outsourcing

The method to outsourcing should aim at evaluating costs and process improvements which may

to be gained from obtaining outsourced services, as compared to when assessment results

recommend that these responsibilities are most effectively accomplished when provided by

internal capabilities

26
The literature reviewed reveals various issues that should be considered in outsourcing decision

making for improvement of organization service delivery which include; the contracted supplier

needs to be supervised. There is need for internal competence to support the outsourced

competence contractor and need for continuous evaluation of services provided by third parties.

In the context of IITA-Uganda, outsourcing decision making is the responsibility of top

management, user departments as well the procurement department. This requires that all

concerned members actively participate in setting appropriate goals and identify competent

candidates to ensure quality service delivery.

2.4. Supplier selection and service delivery

Supplier selection is based on their competitive advantage and competencies in regard to

Outsourcing organization’s requirements. Lever (1999) indicates that the process involves

analysis of possible service providers in terms of their specification and their core competencies.

Zhu et al (2011) adds that outsourcing process should consider the track record of the service

providers, commitment and recognition within the industry, the customers’ satisfaction levels

and the Service Level Agreements (SLA). Mclvor (2010) agrees with the above two authors

argue that contract selection is the wide efforts of obtaining contractors based on their

competencies in particular area of interest, and compatibility with the specification and wishes of

organization. While Lever (1999) indicates that this process involves analysis of potential service

providers in terms of specifications and the expected core competencies., Zhu et al., (2011) adds

that it should also consider the track record of potential service providers, commitment,

recognition within the industry, customer satisfaction level and the Service level agreement it

27
offers. NGO are highly advised to follow these qualities when selecting suppliers of services to

ensure maximum benefits are reaped and failures of outsourcing minimized.

According to Lever (1999), contractor’s section also includes seeing the contractors at work to

observe the working environment and learn about staff retention and turn-over of service

providers, their IT systems equipment management processes and quality assurance procedure.

The Supplier and Contractor relationship is usually for a long term and its highly advisable that

the potential supplier are financially stable to sustain the relationship.

However, Supplier selection has faced several challenges. Contract Negotiations is always a

combination of mental and personal ideas sometime backed by experience in own or similar

organization. According to Lin et al., (2017), performance at this level are aimed at fulfilling the

specification spelt out in SLA.

Similarly, Domberg et al. (2000) states that outsourcing organizations do not get balanced

depictions of contract performances. In this regard, Lever (1999) asserts that making decisions

made at contract negotiation stage have a deep long term impact obligation on both parties. This

should be specified with caution so that both the supplier and the contractor are satisfied. This

stand is support by Zhu et al., (2011) who agrees with (Lever 1999) by stating that a key to a

good contract is clarity, ensuring the contract considers new technologies. It will be noted that an

effective contract negotiation is reliant on vigilant selection of suppliers and technology focusing

on the main features and benefits desired by the outsourcer and knowing if the suppliers is able

to bring valued abilities to the organization.

28
Given the above scenarios, what clearly comes out is that outsourcing organizations need to have

competent staff internally, who will be to assess the contracts specification before committing

the organization, to justify the investment in outsourcing and should also have internal capacity

to supervise the contract. This study agrees with the writers about selecting suppliers with

competitive advantage. Organizations in Uganda such as IITA are encouraged to consider

suppliers who have competencies in the service they require and follow selection process to

evaluate and minimize failures in service delivery of the outsourced functions

Evaluation and selection of suppliers based on their ability to meet organization requirements in

regard to how important the function is. For example, for some organizations in Uganda, supplier

evaluation and approval can be based on previous performance records. Evaluation methods

chosen should be associated with desired behaviors by both contractor and Outsourcer. Misra

and Mahanty (2014) assert that the method chosen should be easily measurable by both parties

and that contracts should be evaluated by objective. To ensure compliance, both parties should

agree upon the service level agreements for easy management of the contract. In the context of

IITA-Uganda, open bidding method is preferred while outsourcing and selecting suppliers who

are competent and committed to providing quality services.

2.5. Contract Management and service delivery

According to Barthelemy, and Geyers (2014), contract management is the making of clauses

governing the award process, procedure, dispute settlement, define roles and line of reporting

and ensuring that the two parties understand and interpret the contract the same way. Similarly,

Will cocks and Lester (1997) emphasized that Service Level Agreements (SLA), tend to be

written simplistically when organizations are new to outsourcing. They further observe that SLA

do not cover important aspects such as the contingencies of the contract that may arise and,

29
events are often expressed in terms of proportion than extent to quantify the benefits to be

derived by the organization.

Whereas Tallon et al., (2010) and Ward et al., (2016) observe that SLA should be done

competitively in scope which is the major constraints and limited in information technology

investments, evaluation and benefits realization process, Baily, et al., (2015) state that

irrespective of whether the SLA is for provision of services or goods, the terms and conditions

should clearly indicate the rights and obligations of both parties.

In most cases the supplier’s terms and conditions are set to protect the supplier while the buyers’

terms and condition also protect the buyer. The two parties tend to focus on protecting

themselves instead of ensuring each other’s terms and conditions are treated with caution and

that the buyer focuses on his terms and conditions to govern the supply. It advisable that both

parties need to assess whether they can operate within each other’s terms and conditions.

According to Lin et al., (2017), many outsourcing projects fail because organization tend to

emphasize implementation of the technology than following and determining project

performance. similarly, Misra (2014) takes the same argument and advances that the outsourcing

organization should choose and evaluate procedures which lead to desired performance by

outsourcing parties to the contract and that the contract should be evaluated objectively. He adds

that the achievement of the goal of outsourcing is only possible with an overview of formal

outsourcing investment.

30
The views of (Misra, (2014) are in line with those of Tsao et al., (2014) who agree that the

achievements of outsourcing objectives are only possible under formal outsourcing investments

evaluation and methodologies that evaluate quantifiable and tangible objectives as well as ensure

response time, availability, reliability, and end user satisfaction. Willcocks and Lester (1997),

further assert that if this is to be achieved, outsourcing organization need to institute clear

controls to deal with risks, should they occur.

Lin et al., (2017) further assert that understanding of each party’s rights and responsibilities is

vital for it permits negotiations when the contract fails to resolve an issue and influence becomes

necessary. Penepacker (2015) points out that the subscribers may sometime be confronted with

broad rights which supports a desired outcome but where the process described in the contract

does not offer effective solutions for either Party. In such a case, instead of simply waiving the

enforcement of such broad rights, it could be more operative to use a comprehensive language as

a starting point to negotiate a more appropriate process.

Changit et al., (1998) and Lin and Pervan (2013) all agree that volumes of notices and consents

required for contract control in an outsourcing agreement can be intimidating and might seem

impossible to manage. As contract procedures are followed over time, written records of notices.

Consents, waivers acknowledgements and similar events are maintained they provide a context

for future negotiation and resolving similar issues when they arise later.

Contract Performance standards should focus on achievement of minimum standards with,

emphasis on maximizing service delivery while defining details of quality, quantity, timing, and

31
method of delivery of the corresponding inputs and out puts required from both parties to support

the outsourced process (Ahimbisibwe, 2009).

Zhuetal., (2011)urges that outsourcing should be contract intensive in nature and that successful

outsourcing process relies on a good contract. Outsourcings more than contracting for skills. The

contract should aim at achieving the objectives of service delivery

Ahimbisibwe, (2009)

notes that outsourcing comprises repeatedinter organizational exchanges that be come socially em

bedded in a contract overtime thus, resulting into a Contract being complimented with trust to en

hance service delivery performance. Successful organizations rigorously evaluate suppliers, tailor

the terms of outsourcing agreement and carefully manage the function sunder

taken by the suppliers. In the context of IITA-Uganda, contract management entails defining the

roles of the contractor and the contracted, performing and monitoring contracts as well as

reporting the feedback. The quality of service delivery is largely dependent on contract

management.

2.6. Summary of Literature review

The above discussion reveals that organizations outsource to acquire goods and service that

cannot be provided internally but necessary for their operations, with an aim of achieving

efficiency in service delivery for customer satisfaction. Literature shows that the outsourcing

objectives in relation to decision making, supplier and contract management create contractual

obligations between the outsourcing organization and the suppliers.

32
In regard to decision making, much as outsourcing’s major objectives include; efficiency,

reduced costs and improved services delivery, while freeing resources to be allocated to core

competences, the literature reviewed hardly provides ample evidence to show how outsourcing

decision affects service delivery. It rather indicates that organization decide to outsource to

acquire goods or service that cannot be provided internally or where they lack internal capacity,

to allow them concentrate on core competencies. It also reveals that where organizations are able

to provide everything required in their day to day operations they inevitably make decision to

outsource either expressly or by need, thus creating the need for suppler selection resulting into

the creation of contractual obligation, though little is mentioned on how such outsourcing

strategies impact on quality of service delivery in context of agriculture sphere.

Outsourcing processes involve supplier selection through request for quotations that are

evaluated and the most competitive suppliers selected, leading to creation of contractual

obligation. The process also defines contract management procedure with elements that define

responsibilities of both parties, as well as defining arbitration procedure, and putting in place

contract control processes such monitoring and evaluation of the performance as well as the

reporting and feedback system. However, the literature in most cases showed that outsourcer

aims at benefiting from the service delivered by the supplier, without necessarily aiming at the

long-term relationship that is created by contractual obligations, which may be of value addition

to the organization in future. This clearly shows that both the buyer and supplier organizations

aim at satisfying their internal needs that focus on customer satisfaction and service delivery in

short run but with less emphasis and consideration on how they affect the quality and

33
sustainability of service delivery. This is more evident in Uganda in the NGO sphere where

creating long term relationship with suppliers via outsourcing has not yet been fully explored.

34
 CHAPTER THREE

METHODOLOGY

3.0. Introduction

This chapter presents the methodology that was used in the research. It covers the study

population, sample size, research design, sample selection, sampling techniques, data collection

methods and procedure, and instruments, validity and reliability of data collection instruments as

well as data analysis and measurement of variables, and ethical issues.

3.1. Research design

This research adopted case study approach. (Yin, 2009), defines a case study approach as

research method that gives an empirical inquiry that investigates a contemporary phenomenon

within its real life context when the boundaries between the phenomenon and context are not

clearly evident, and in which multiple sources of evidence are used. (Yin, 2009) further asserts

that “what” and “how” questions lead to an exploratory study, which call for application of case

study, survey, experiment, or archival analysis as a strategy to inquiry. Looking at Yin’s first

condition of “the type of questions posed’ in this study, the research questions focused on

“what”. The case study research was used because it brings out deeper understanding of complex

issues and helps to understand the in-depth information about the phenomenon (Amin, 2005).

In this case study design, both qualitative and quantitative research data collection approaches

were used because of their ability to complement each other for details. Qualitative data explains

narrative and interpretive information obtained from respondents, thus helping to obtain in-

depth understanding of opinions about outsourcing effect on service delivery, while quantitative

approach was used to get more data from many respondents within the shortest time possible

35
given that it uses closed ended questions that require straight forward responses. The quantitative

method was used because it quantifies the data collected to explain the phenomenon at hand. It

helped to explain the current situation and examined the influence of outsourcing of IT services

on service delivery at IITA. This method was used because it allows flexibility and focuses on

constructs that allow different responses from various respondents’ knowledge, attitudes and

opinions on the subject (Sekaran, 2003). Data were collected by use of self-administered

questionnaire from respondents and face to face interviews with the key informants (end users)

of the outsourced IT services. The face to face interview helped get more clarifications about

responses some quantitative questions that arose from questionnaires.

3.2. Study Population

IITA has a total population of 78 staff, who comprise of 8 Top management, 11 Research

Associates, 10 Research Assistants, 8 Research Technicians, 3 Field Liaison Officer, 6

Administrative staff, 1 communication officer, and 31 short term contract staff. For this study,

data was collected from 42 members of staff, being the direct end users of the outsourced

services thus being suited to give relevant information, and they are members who responded to

the questionnaires. They were selected by simple random sampling, and purposive sampling

techniques as detailed in table1.

3.2.1 Sample size and selection

Sample size of 54 was selected using the formula as provided by Krejcie and Morgan (1970)

table. The sample methods used were simple random sampling and purposive comprising of

staff who directly use out sourced IT services to support their service delivery.

36
Table 3. 1: Population and sample size selection

Staff Category Population Sample Sampling Techniques

Target sample size
Top management 8 8 Purposive sampling

Research Associates 11 11 Purposive sampling

Research Assistant 10 10 Purposive sampling

Research Technician 8 8 Purposive sampling

Field Liaison officer 3 3 Purposive sampling

Administration Staff 6 6 Purposive sampling

Communications Officers 1 1 Purposive sampling

Short term contract staff 31 7 Simple random sampling

Total 78 54
Source: Personnel list of IITA-Uganda and in reference to Krejcie& Morgan (1970) table for

Determining sample size.

3.2.2 Sampling techniques and Procedures

Sampling is the process of selecting the right events or individual objects for a study Sekaran

Uma, (2003). According to Mugenda and Mugenda (2003. 1999), sampling is the formulation of

a procedure of selecting subjects or cases to be included in the sample of study. This study used

simple random and purposive sampling techniques. Simple random techniques were used

because it gave equal chances to all respondents to be randomly selected thus having equal

opportunity to be included in the study. While purposive sampling was used due to small

numbers within each category of intended respondent who use IT services in their day to day

37
work. The direct users of IT services in their day to day service delivery and are in position to

give relevant and valid information for this study was conveniently accessed and included.

In addition, the purposive sampling was employed to select key informants from Administrative

management staff since these were more knowledgeable about outsourcing and service delivery

at IITA. The purposive sampling enabled the study choose participants expected for each

category based on their knowledge and expertise Key decision-making Information and clarification

of outsourcing process was expected from this category. (Mugenda & Mugenda, 1999).

3.3 Data Collection Methods

Qualitative and quantitative data collection methods were used to collect data from primary and

secondary sources because they complement each other (Amin, 2005). Primary data was

collected by use of questionnaires and face to face interview while secondary data was got from

organizational reports, text books, research dissertation and journals. The data collection

methods used were the questionnaire survey, and interviews.

3.3.1 Questionnaire survey

A questionnaire with Self Administered Questions (SAQ) was used to collect data from both

Research and support staff. The questionnaire was formatted in five point Likert standardized

rating scale of 1-5 as (5-strongly agree, 4- agree, 3-not sure, 2 disagree 1-strongly disagree), to

facilitate quick responses. The likert scale was used to enable respondents give opinions

according to their level of being contented with particular items.

The Questionnaire contained section A, comprising questions about background characteristics

of respondents while section B contained questions investigating the research variables i.e.

outsourcing strategy and its contribution to service delivery at IITA. Due to the fact that

38
respondent are busy people and do not have enough time to allocate and attended to researchers,

the self administered questionnaire was used because it’s easy to administer and is time saving

The researcher used both structured questionnaire and semi structured questionnaires to captured

straight forward responses while the open ended questions captured different opinions about

outsourcing for more information. The Self-administered questionnaire was used to cover more

respondents as advanced by (Amin, 2005). However, given the fact that some respondents are

likely to be busy people and may not complete the questionnaire, combined with

misinterpretation of questions and, failure to establish the honesty of respondents, face to face

interviews were conducted for key Informants by use of interview guide and more data was got

from respondents.

3.3.2 Interviewing

Interviewing is a method that involves face to face encounter with the respondents. This method

was used to collect primary data from key informants. The researcher conducted face o face

interviews with key informants who included Senior staff members from Research, Finance and

Procurement units. The purpose of this method was to solicit first hand detailed and in-depth

information from Management staff who are key decision makers in regard to outsourcing and

service delivery at IITA-Uganda. The Researcher was in position to discuss face to face with

Key Informants the contribution of outsourcing to service delivery. Clarifications about the

various questions on the interview guide to collect various views, thus leading to first hand data.

However, this required maximum cooperation from respondents to enable the researcher to

obtain accurate and reliable data (Mugenda and Mugenda, (1999). The interview helped in

39
getting more clarifications on views about Outsourcing and how it contributes to service

delivery.

3.4. Data collection Instruments

3.4.1. Questionnaire

A structured questionnaire (Appendix I) was used to collect data from large number of

respondents in shortest time possible. It was used in this study because it’s a popular data

collection tool, easy to complete and can be left with the respondents to complete at their

convenience and are appropriate for large samples to generate large data in the shortest possible

time (Mugenda & Mugenda, 2003).

3.4.2. Interview guide

This comprised of semi-structured interview questions (Appendix II), which was used to conduct

face to face interview with purposively selected key informants for example, Research

Associates, Procurement, and Finance staff. Interviews made it easy for the researcher to

understand more the respondent’s answers and experiences about contribution of outsourcing

strategy in their service delivery. Interviews are advantageous since they provide in-depth data

and clear understanding which may not be possible with structured questionnaires (Mugenda and

Mugenda, 2003).

3.4.3. Validity

Validity refers to appropriateness of the instrument

Content validity was measured by content validity index (CVI) using the formula: CVI= No. of

judges declared items valid divided by Total No. of questions. The result is the inter-judge

coefficient of validity.

40
Four research experts were given the developed questionnaires to score the relevance

of each question after which the content validity index 0.87 was computed using the

formula for Content Validity Index (CVI) as stated below:

CVI = No. of items rated relevant

Total no. of items on the questionnaire

Table 3. 2: Content Validity Index (CVI) of Survey items

Item Total Number of Number of items Content Validity Ratio

items considered relevant (CVR)
Decision making 12 10 0.83
Supplier selection 11 10 0.90
Contract management 14 12 0.85
Service delivery 11 10 0.90
CVI average 0.87

3.4.4. Reliability

Reliability is a measure of the degree to which the research instrument yields consistent results

or data after repeated trials. Mugenda and Mugenda (2003) Suggested that pre-test sample of 1-

10% of the sample size is good enough to generalize results after computations have been

conducted.

Reliability refers to its consistency in determining what it is intended to measure (Amin, 2005).

Reliability test (Pre-test) was conducted prior to administering data collection instruments. A

pre-test study on 5 respondents was conducted using data collection tools to test how possible

they will collect reliable data.

41
Table 3. 3: Cronbach's Alpha of survey items

Reliability Statistics
Cronbach's Alpha No. of Items

.849 42

Table 3.3 above shows the reliability tests carried out before analysis and they showed a

Cronbach alpha of 0.849 in agreement with Amin (2005) who suggests that a Cronbach alpha of

0.7 or more is considered sufficient. The rationale behind reliability tests before the analysis was

to ensure stability and equivalence.

3.5 Procedure of data collection

After successful defense of the proposal, a letter from UMI was issued to researcher to proceed

for data collection. A pre-test was conducted on 5 respondents, whose responses were used to

improve data collection tools (Questionnaire and Interview guide Actual data collection followed

shortly and lasted for a period of 2 weeks. When data was ready, it was analyzed to facilitate

report writing, which was submitted for defense as a final activity of this research process.

3.6 Data analysis and Procedure

Data was analyzed both qualitatively and quantitatively.

3.6.1 Quantitative Data Analysis

Statistical Package for the Social Sciences (SPSS) was used to process and summarize

information got from the questionnaires. The data was sorted, coded and fed into the SPSS data

analysis software to generate various results. The data was analyzed for descriptive statistics, that

is, frequencies, percentages, mean and standard deviation. The analyzed data was presented in

tables. Inferential statistics like correlations were used to illustrate the existence of the

42
relationships between variables (if any), while the regression analysis was used to explain how

the independent variables affect the dependent variable.

3.6.2 Qualitative Data Analysis

Qualitative Data analysis from in-depth interviews was done using thematic analysis. Responses

from the key informants were sorted and organized in line with the different thematic areas

(variables and objectives under study). This was done by identifying all data that is related to the

already classified patterns according to research objectives. All information that fitted under the

specific pattern was identified and placed with corresponding patterns and thereafter, data was

combined into themes. Once the themes are collected together, and the literature studied, the

researcher formulated theme statements to develop a comprehensive report. Quotations and other

interpretations were used to back up quantitative data. This helped to triangulate findings of the

study.

3.7. Measure of Variables

The variables were measured by assigning a code to number used to identify characteristics so as

to identify and define it. The cardinal, nominal and Likert scales were used to measure variable

on the questionnaires (Amin, 2005). The nominal scale was used to measure variable such as

sex, gender, age, and period of service Mugenda and Mugenda (1999). While the Likert scale

was used to measure and rank variables as well as opinions of respondent’s contributions

towards outsourcing strategy contribution to service delivery in NGOs. This was measured

according to statement like; strongly agree, agree, undecided, strongly disagree and disagree.

43
3.8. Ethical considerations

According to Creswell (2007), researchers are sensitive to ethical considerations. The researcher

emphasized confidentiality of all his research findings as Sekaran (2004) suggests. The

researcher used research assistants where bias was anticipated during data collection.

Respondents’ names were withheld to ensure anonymity and confidentiality (Creswell, 2007) in

terms of any future prospects. The participants were also assured that the information collected

will strictly be used for purposes of this research study only.

44
 CHAPTER FOUR

PRESENTATION, ANALYSIS AND INTERPRETATION OF FINDINGS

4.0 Introduction

The study examined the effects of outsourcing strategy on service delivery at IITA-Uganda. The

chapter highlights the presentations, analysis and interpretation of findings of the study. The

presentations are done according to the objectives of the study. Findings have been presented in

form of tables and figures and narratives have been provided for each of the tables.

4.1 Response rate of respondents

The response rate was computed in order to establish whether the sample was representative of

the bigger group and whether it would allow for generalization of the study findings.

Table 4. 1: Response rate of respondents

Staff Category Planned Actual % response rate

Research Associates 11 9 81.8
Research Assistant 10 10 100
Research Technician 8 6 75
Field Liaison officer 3 3 100
Administration Staff 6 6 100
Communications Officers 1 1 100
Short term contract staff 7 7 100
Total 46 42 91.3%

Source: Primary data

The Results in Table 4.1 above show the respondents to whom the questionnaire was

administered and the response rate. Out of the total 46 targeted respondents from different

categories, 42 actually participated which gave an overall response rate of 91.3% which is way

45
above the recommended two-thirds (67%) response rate (Amin, 2005). This indicated that the

researcher was able to obtain adequate data for a complete study. In addition to the

questionnaires, the researcher carried out six out of the eight planned interviews with top

management. Responses from interviews were used to support descriptive statistics from

questionnaires.

4.2 Background Information of the Respondents

The background information of respondents included age, gender, level of education,

position and length of service. Profiles of the respondents who participated in this

study are shown in the tables below:

4.2.1 Age of respondents

Table 4. 2: Age of respondents

Age Frequency (N) Percent (%)

20-25 16 38.1
26-35 20 47.6
36-45 5 11.9
46-55 1 2.4
Total 42 100.0

Source: Primary data

Table 4.2 above revealed that the study involved 42 respondents and results show that

out of them, 16 respondents (38.1%) were aged 20-25 years, the majority of

respondents 20 (47.6%) were aged 26-35, 5(11.9%) were aged 36-45 years and only

1(2.4%). The age range of the respondents was between 46-55 years of age. Therefore,

all respondents were mature and able to provide valid and reliable data for the study.

46
4.2.2 Gender of respondents

Table 4. 3: Gender of the respondents

Gender Frequency (N) Percent (%)

Females 19 45.2
Male 23 54.8
Total 42 100.0
Source: Primary data
From table 4.3, above study involved 42 respondents and results show that out of

them, 23 respondents (54.8%) were males and 19 respondents (45.2%) were females.

This implies that male respondents were more during the study. However, difference

in numbers did not affect participation of both male and female respondents in the

study.

4.2.3 Level of education

Table 4. 4: Respondents’ Level of Education

Level of education Frequency (N) Percent (%)

Bachelor’s degree 23 54.8
Master’s Degree 19 45.2
Total 42 100.0
Source: Primary data

As shown in table 4.4, above, respondents varied in terms of education level. Results show

that the majority of the respondents 23(54.8%) were at a bachelor’s level while 19(45.2%),

were at masters level. This shows that all respondents were educated, thus able to read and

understand the questions asked, thus were able to give reliable data.

47
4.2.4 Respondents length of service.

Table 4. 5: Respondents length of service

Length of service Frequency (N) Percent (%)

Less than a year 6 14.3
1-5 years 9 21.4
More than 5 27 64.3
years
Total 42 100.0
Source: Primary data

Table 4.5, above shows respondents variations in terms of their length of duration in

service 27 respondents (64.3%) have served for more than 5 years, 9 (21.4%) of the

respondents have served for 1 to 5 year, whereas 6(14.3%) respondents have served

for less than a year.

4.2.5 The effect of decision making process on service delivery at IITA

The first objective of the study was to establish the effect of outsourcing decision making on

service delivery. The likert scale questionnaire was used to capture respondents’ opinions

quantitatively.

During the study, a set of statements on goal setting and identification of outsourcing candidates

were presented to respondents in order to establish their opinion on outsourcing decision making

at IITA. Strongly Agree (SA) = 5, Agree (A) =4, Not Sure (NS) = 3, Disagree (D) =2 while

Strongly Disagree (SD) =1.

While presenting the findings, respondents who strongly agreed and those who agreed were

combined to form one category of “agree” since they all consented while those who strongly

disagreed and those who disagreed were also combined to form a category of “disagree” with the

48
 statement. In the analysis, the third category is of respondents who remained neutral and

undecided.

Table 4. 6: Responses on decision making process on service delivery at IITA

Statement SA A NS D SD Mean St.

(5) (4) (3) (2) (1) Dev.

Staff are involved in decision 26.2% 52.4% 14.3% 4.7% 2.4% 3.95 0.909
making about outsourcing of the IT (11) (22) (6) (2) (1)
services
IITA carries out adequate planning 14.3% 16.7% 4.8% 59.5% 4.8% 2.76 1.226
before outsourcing IT service, (6) (7) (2) (25) (2)
which makes it easy for decision
making
IITA has a clear vision and mission 16.7% 35.7% 28.6% 16.7% 2.4% 3.48 0.042
to conduct agriculture research that (7) (15) (12) (7) (1)
makes it necessary to outsource IT
services
The objectives for me at IITA are 14.3% 35.7% 14.3% 26.2% 9.5% 3.19 1.254
clear and within available limits (6) (15) (6) (11) (4)
IITA seeks views of staff members 7.1% 31.0% 31.0% 26.2% 4.8% 3.10 1.031
before deciding to outsource IT (3) (13) (13) (11) (2)
services
Dependence on outsourced 21.4% 42.9% 21.4% 11.9% 2.4% 3.69 1.024
company is considered in service (9) (18) (9) (5) (1)
delivery before outsourcing
processes at IITA
Management identifies internal 33.3% 38.1% 11.9% 11.9% 4.8% 3.83 1.167
service capabilities before (14) (16) (5) (5) (2)
outsourcing
Objectives are usually set before 33.3% 47.6% 4.8% 9.5% 4.8% 3.95 1.103
outsourcing (14) (20) (2) (4) (2)
Management considers the 16.7% 47.6% 16.7% 19.0% 00% 3.62 0.987
contribution of outsourcing on (7) (20) (7) (8) (0)
service delivery before deciding to
outsource
The final result of outsourcing 19.0% 47.6% 21.4% 9.5% 2.4% 3.71 0.970
decisions are usually put into (8) (20) (9) (4) (1)
consideration before outsourcing
Source: Primary data

49
Results in Table 4.6 above indicate that 33 (78.6%) of the respondents agreed that staff are

involved in decision making about outsourcing of the IT services, 6 (14.3%) were not sure while

3 (7.1%) of the respondents disagreed with the statement. The findings were further verified with

a mean value of 3.95 and the standard deviation of 0.909 which represents the number of

respondents with varying responses. The mean value obtained was way above average, which

showed that most respondents held the opinion that staff members are involved in decision

making about outsourcing of the IT services. In support of the above findings, one of the key

informants noted that staff members are involved in decision making because they are the end

users as quoted:

“Staff members are involved in decision making about IT services because they

are the end users of the IT services.” (Interview_002)

When respondents were asked whether IITA carries out adequate planning before outsourcing IT

service, which makes it easy for decision making, 13 (31%) of the respondents agreed, 2 (4.8%)

were not sure while 27 (64.3%) disagreed with the statement. The findings were further verified

with a mean value of 2.76 which was below average, implying that few respondents agreed with

the statement. The standard deviation of 1.226 shows that there were significant variations in the

responses obtained. Relatedly, results from key informant interviews revealed that most IT

services are outsourced on the adhoc basis as noted by a key informant from the Finance Unit.

“There is no procurement plan. All procurements are made on adhoc

arrangement and assessed on case by case basis. There is no pre-qualification

of suppliers.” (Interview_ 003)

When respondents were asked whether the IITA has a clear vision and mission to conduct

agriculture research that makes it necessary to outsource IT services, 29 (69.1%) of the

50
respondents agreed, 12 (28.6%) was not sure while 1 (2.4%) disagreed with the statement. The

findings were verified with a mean of 4.48 which was way above the average and close to 5, the

highest ranking scale which shows that the majority respondents consented that the IITA has a

clear vision and mission to conduct agriculture research which makes it necessary to outsource

IT services. On the other hand, the standard deviation of 0.042 shows that there were slight

variations in the responses obtained.

Respondents were similarly asked if the objectives at IITA are clear to staff members and within

available limits. To this, 22 (50%) of the respondents agreed while 6 (14.3%) were not sure, and

15 (35.7%) disagreed with the statement. The corresponding mean value for the statement was

3.19 while the standard deviation was 1.254 which shows that there were variations in the

responses obtained. Since the mean value obtained was above 3.0, it shows that most

respondents were in agreement with the statement.

During the study, it was further established that IITA seeks views of staff members before

deciding to outsource IT services. This was revealed by 16 (38.1%) of the respondents agreeing

while 13 (31.0%) were not sure and 13 (31%) disagreed with the statement. The findings were

further verified with a mean value of 3.10 and standard deviation of 1.031 which shows that

some respondents gave varying responses. The fact that the obtained mean value was above

average, it shows that the IITA seeks views of staff members before deciding to outsource IT

services. In support of the above findings, one key informant from the Procurement Unit had this

to say:

“IITA seeks views of staff members before deciding to outsource IT services

because staff members from the user department have to request for quotation

51
 (RFQ), after which the quotations are evaluated to select the supplier based on

affordability within available budget.” (Interview_006)

On the statement that dependence on outsourced company is considered in service delivery

before outsourcing processes at IITA, 27 (64.3%) of the respondents agreed, 9 (21.4%) were not

sure while 6 (14.3%) disagreed with the statement. The corresponding mean value for the

statement of 3.69 was above average, which shows that most respondents were in agreement

with the statement. On the other hand, the standard deviation of 1.024 shows that there were

slight variations in the responses obtained.

When respondents were asked whether the management identifies internal service capabilities

before outsourcing, 30 (76.4%) of the respondents agreed, 5 (11.9%) were not sure while 7

(16.7%) disagreed with the statement. The corresponding mean value for the statement was 3.83

while the standard deviation was 1.167 which shows that some respondents gave varying

responses. The statistics further imply that most respondents were in agreement with the

statement that management identifies internal service capabilities before outsourcing.

On whether objectives are usually set before outsourcing, 34 (71.4%) of the respondents agreed

while 7 (16.7%) were not sure and 6 (14.3%) disagreed with the statement. The findings were

verified with a mean of 3.95 which was way above average and the standard deviation of 1.103

which shows that there were variations in the responses obtained. Since the mean value obtained

was above average, it shows that objectives at the IITA are usually set before outsourcing. The

above findings were further supported by a finance officer at IITA who stated that outsourcing is

usually based on specific objectives as noted:

52
 “Management sets the objectives for which goods and services are to be

outsources. Some of the items usually outsourced include IT services, Car

repairs, Clearing services, Tax services, Payroll Data base management

services, and travel services, Car hire, Security and Catering, services. Each of

the above services is normally outsourced to meet specific objectives.”

(Interview_001)

Another question sought to know if management considers the contribution of outsourcing on

service delivery before deciding to outsource. To this, 27 (64.3%) of the respondents agreed with

the statement while 7 (16.7%) was not sure and only 8 (19%) disagreed with the statement. The

corresponding mean value for the statement was 3.62 was above average while the standard

deviation of 0.987 shows that there were varying responses obtained. In addition, 28 (66.7%)

respondents agreed that the final result of outsourcing decisions are usually put into

consideration before outsourcing as compared to 9 (21.4%) who were not sure while 5 (11.9%),

disagreed. The corresponding mean value for the statement was 3.71 which shows that most

respondents supported the statement while the standard deviation of 0.970 represented the

number of respondents with varying responses.

4.3. Correlation coefficient matrix for outsourcing decision making and service delivery

Table 4. 7: Pearson (r) correlation coefficient matrix of the component variables

Variables 1 2
Service delivery -1 1.000
Outsourcing Decision making -2 .621** 1.000

** Correlation is significant at the 0.01 level (2-tailed).

53
The findings in table 4.7 above revealed that outsourcing decision making had a significant

relationship with service delivery because correlation is significant at the 0.01 level. The Pearson

correlation coefficient (r=0.621**) was above 0.5 which shows strong positive relationship with

service delivery. Therefore outsourcing decision making has a statistically significant strong

positive relationship with service delivery at IITA. This means that improvement in outsourcing

decision making can lead to improved service delivery at IITA.

4.3.1 Regression between outsource decision making and service delivery

Regression analysis was further carried out in order to determine the strength of the relationship

between outsourcing decision making and service delivery. Results from regression analysis are

presented in the table below:

Table 4. 8: Regression analysis for outsource decision making and service delivery

Adjusted R Std. Error of

R R Square Square the Estimate
Model
1 .621a .385 .370 .54355

a. Predictors: (Constant), Outsource decision making

According to the results obtained, the coefficient for determination (Adjusted R Square) value is

0.370 which implies that outsource decision making explain 37.0% variations in service delivery.

R2 value indicated how much of the dependent variable service delivery at IITA can be explained

by the independent variable Outsource decision making. Since it is low (37.0), it shows that the

other remaining percentage of 63 % is explained by other factors other than outsource decision

making.

54
 4.3.2. The effect of supplier selection on service delivery at IITA

The second objective of the study was to establish the effect of supplier selection on

service delivery.

During the study, a set of statements on outsourcing for suppliers, choice of bidding methods,

evaluations, competence and commitment of suppliers were presented to respondents in order to

establish their opinion on supplier selection at IITA. Strongly Agree (SA) = 5, Agree (A) =4, Not

Sure (NS) = 3, Disagree (D) =2 while Strongly Disagree (SD) =1.

Table 4. 9: Responses on supplier selection on service delivery at IITA

Statement SA A NA D SD Mean St. Dev.

(5) (4) (3) (2) (1)

Suppliers are evaluated and selected 16.7% 54.8% 19.0% 7.1% 2.4% 3.76 0.906
through a transparent process (7) (23) (8) (3) (1)
Suppliers are selected based on their 31.0% 42.9% 16.7% 4.8% 4.8% 3.90 1.055
competencies (13) (18) (7) (2) (2)
The criteria of selecting a supplier of IT 7.1% 19.0% 17.1% 57.1% 9.5% 2.57 1.129
is clearly followed (3) (8) (3) (24) (4)
Costs are evaluated prior to selecting the 35.7% 40.5% 11.9% 9.5% 2.4% 3.98 1.047
supplier (15) (17) (5) (4) (1)
The outsourced supplier has a shared 35.7% 52.4% 7.1% 00% 4.8% 4.14 0.926
vision with IITA (15) (22) (3) (00) (2)
Supplier reliability is usually considered 28.6% 45.2% 16.7% 9.5% 00% 3.93 0.921
before outsourcing (12) (19) (7) (4) (00)
A lot of importance is attached to the 33.3% 50.0% 9.5% 4.8% 2.4% 4.07 0.921
supplier before selection (14) (21) (4) (2) (1)
Performance of suppliers is regularly 26.2% 35.7% 23.8% 11.9% 2.4% 3.71 1.066
monitored (11) (15) (10) (5) (1)
Outsourcing suppliers are carefully 23.8% 52.4% 14.3% 7.1% 2.4% 3.88 0.942

55
examined (10) (22) (6) (3) (1)

IITA evaluates outsourcing to assess 16.7% 47.6% 21.4% 11.9% 2.4% 3.64 0.983
whether the saved resources can be (7) (20) (9) (5) (1)
reinvested
Source: Primary data

Results in Table 4.9 above indicate that 30 (71.5%) of the respondents agreed that suppliers are

evaluated and selected through a transparent process, 8 (19.0%) were not sure and 4 (9.5%)

disagreed with the statement. The findings were verified with a mean value of 3.76 which

represented the number of respondents in agreement with the statement while the standard

deviation of 0.906 shows that there were varying responses obtained. Since the mean value

obtained was above the average of 3.0, it shows that the majority respondents held the opinion

that suppliers are evaluated and selected through a transparent process. In support of the above

findings, a research officer from the Research Unit at IITA noted that suppliers are evaluated in

order to select the best provider who is at the same time cost effective.

“There is transparency in the selection of suppliers because all applicants are

evaluated to narrow down the scope in reference to specifications and budget

affordability. The quotations are evaluated together with the end users, upon

which a purchase order is issued and delivery made.” (Interview _007)

Similarly, 31 (73.9%) of the respondents agreed that suppliers are selected based on their

competencies. 7 (16.7%) of the respondents were not sure while only 4 (9.6%) disagreed with the

statement. The corresponding mean value was 3.90 and the standard deviation of 1.055 which

represents the number of respondents with varying responses. The fact that the mean value was

above average implies that most respondents consented that suppliers are selected based on their

56
competencies. In support of the above findings, one key informant from the Procurement Unit at

IITA noted that suppliers are selected basing on their capacity to provide the required goods and

services as quoted:

“The institution selects suppliers basing on their competencies in line with the

different areas of operation. For instance, suppliers of internet services must be

competent in IT while those in other fields such as catering, car hire and

clearing ought to be experienced in the respective fields.”(Interview _005)

When respondents were asked whether the criterion of selecting a supplier of IT is clearly

followed, only 11 (26.1%) disagreed while the majority 28 (66.6%) disagreed and 3 (17.1%)

were not sure. The corresponding mean value for the statement was 2.57, below average while

the standard deviation of 1.129 shows that there were significant variations in the responses

obtained. Since the mean value obtained was below average, it shows that few respondents held

the view that the criterion for selecting a supplier is clearly followed. On the contrary, results

from a key informant from the Procurement Unit noted that the criterion for selecting suppliers is

clearly followed as quoted;

“The criterion for selecting suppliers is clearly followed in that it commences

with identification of need, making specification, request for Quotations (RFQ),

evaluate, approve and issue purchase order considering the lowest bidder.”

(Interview_002).

Respondents were similarly asked if the costs are evaluated prior to selecting the supplier. To

this, 32 (76.2%) of the respondents agreed while 5 (11.9%) were not sure and 5 (11.9%)

disagreed with the statement. The corresponding mean value for the statement was 3.98 while the

57
standard deviation was 1.047 which shows that there were variations in the responses obtained.

Since the mean value obtained was above average, it indicates that the majority respondents held

the opinion that costs are evaluated prior to selecting the supplier. The above findings were

confirmed by a research officer at IITA who noted that costs are evaluated to select the lowest

bidder.

“IITA evaluates the costs before the selection of suppliers in order to select the

lowest bidder on whom minimal costs will be incurred and in line with the set

budget.” (Interview_007).

Study findings further revealed that the outsourced supplier has a shared vision with IITA. This

was revealed by 37 (88.1%) of the respondents who agreed with the statement compared to 3

(7.1%) who were not sure and 13 (4.8%) who disagreed with the statement. The findings were

verified with a mean value of 4.14 which was way above average and the standard deviation of

0.926 which shows that there were slight variations in the responses obtained. Since the mean

value obtained was above average it shows that the majority respondents held the opinion that

the outsourced supplier has a shared vision with IITA.

On the statement that supplier reliability is usually considered before outsourcing, 31 (73.8%) of

the respondents agreed, 7 (16.7%) were not sure while 4 (9.5%) disagreed with the statement.

The corresponding mean of 3.93 shows that the majority respondents consented that supplier

reliability is usually considered before outsourcing. On the other hand, the standard deviation of

0.921 shows that there were slight deviations in the responses obtained. In support of the above

findings, one key informant from the Procurement Unit had this to say:

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 “The institution normally considers the reliability of potential suppliers to

ensure that they are competent enough and can be relied on to supply the

required goods and services. Their reliability is determined by their

performance in any previous contract handled, expertise and financial status”

(Procurement Unit. (Interview_003).

Whether a lot of importance is attached to the supplier before selection, 35 (83.3%) of the

respondents agreed 4 (9.5%) were not sure while 3 (7.2%) disagreed with the statement. The

corresponding mean value for the statement was 4.07, way above the average of 3.0 and the

standard deviation of 0.921 which shows that some respondents gave varying responses. The

statistics indicate that the majority respondents held the opinion that a lot of importance is

attached to the supplier before selection.

Study findings further revealed that performance of suppliers is regularly monitored. This was

revealed that 26 (61.9%) of the respondents agreed while 10 (23.8%) were not sure and 6

(14.3%) disagreed with the statement. The findings were verified with a mean value of 3.71 and

standard deviation of 1.066 which represents the number of respondents with varying responses.

Since the mean value obtained was above average, it shows that the majority respondents agreed

that performance of suppliers is regularly monitored.

It was also established that outsourcing suppliers are carefully examined as revealed by 32

(76.2%) of the respondents who agreed with the statement compared to 6 (14.3%) who were not

sure, and only 4 (9.5%) that disagreed with the statement. The corresponding mean value for the

statement was 3.88 while the standard deviation was 0.942. Since the mean value obtained was

59
above the average of 3.0, it shows that the majority respondents held the opinion that out

sourcing suppliers are carefully examined. Study findings further revealed that the IITA

evaluates outsourcing to assess whether the saved resources can be reinvested. This was revealed

by 27 (64.3%) respondents who agreed with the statement compared to 9 (21.4%) who were not

sure and 6 (14.3%) who disagreed with the statement. The corresponding mean value for the

statement was 3.64 which was above the average of 3.0 and the standard deviation of 0.983

which shows there were variations in the responses obtained. Since the mean value obtained was

above average, it shows that most respondents were in agreement with the idea that the IITA

evaluates outsourcing to assess whether the saved resources can be reinvested.

4.4 Correlation coefficient matrix for supplier selection and service delivery

Table 4. 10: Pearson (r) correlation coefficient matrix of the component variables

Variables 1 2
Service delivery -1 1.000
Supplier selection-2 .681** 1.000

** Correlation is significant at the 0.01 level (2-tailed).

The findings in table 4.10 above revealed that supplier selection had a significant relationship

with service delivery because the correlation is significant at the 0.01 level. The Pearson

correlation coefficient (r=0.681**) was above 0.5 which shows strong positive relationship with

service delivery. Therefore supplier selection has a statistically significant strong positive

relationship with service delivery at IITA. This means that improvement in the techniques of

supplier selection can lead to improved service delivery at IITA.

60
4.4.1. Regression between supplier selection and service delivery

Regression analysis was further carried out in order to determine the strength of the relationship

between supplier selection and service delivery. Results from regression analysis are presented in

the table below:

Model Summary

Table 4. 11: Regression analysis for supplier selection and service delivery

R R Square Adjusted R Square Std. Error of the Estimate

Model

1 .681a .464 .451 .50749

a. Predictors: (Constant), Supplier selection

According to the results obtained, the coefficient for determination (Adjusted R Square) value is

0.451 which implies that supplier selection explains 45.1% variations in service delivery. R 2

value indicated how much of the dependent variable service delivery at IITA can be explained by

the independent variable supplier selection. Since it is moderate (45.1), it shows that the other

remaining percentage of 54.9 % is explained by other factors other than supplier selection.

4.4.2 The effect of contract management on service delivery at IITA

The third objective of the study was to establish the effect of contract management on service

delivery. During the study, a set of statements on defining roles in contract, service level

agreements, monitoring and evaluating contract, reporting and feedback were presented to

respondents in order to establish their opinion on contract management at IITA. Strongly Agree

(SA) = 5, Agree (A) =4, Not Sure (NS) = 3, Disagree (D) =2 while Strongly Disagree (SD) =1.

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 Table 4. 12: Responses on contract management on service delivery at IITA

Statement SA A NS D SD Mean St.

(5) (4) (3) (2) (1) Dev.

The contract that guides 21.4% 42.9% 23.8% 7.1% 4.8% 3.69 1.047
outsourcing at IITA clearly (9) (18) (10) (3) (2)
defines the roles of the service
provider
The IT service contract clearly 23.8% 45.2% 16.7% 9.5% 4.8% 3.74 1.083
defines service level agreements (10) (19) (7) (4) (2)
The evaluation process clearly 28.6 35.7% 26.2% 9.5% 00% 3.83 0.961
defined in the IT service % (15) (11) (4) (00)
contract (12)
IT service contract has stated 14.3% 33.3% 31.0% 14.3 7.1% 3.33 1.119
out monitoring level of the end (6) (14) (13) % (3)
user (6)
The process of arbitration is 33.3% 54.8% 4.8% 2.4% 4.8% 4.10 0.958
clearly defined in out sourcing (14) (23) (2) (1) (2)
contract
Feedback process is clearly 21.4% 66.7% 9.5% 00% 2.4% 4.05 0.731
stated in the contract for IT (9) (28) (4) (00) (1)
services
Service delivery is effective 26.2% 50.0% 16.7% 4.8% 2.4% 3.93 0.921
under outsourced contract (11) (21) (7) (2) (1)
Outsourced services are easily 21.4% 61.9% 11.9% 2.4 2.4% 3.98 0.811
accessed (9) (26) (5) % (1)
(1)
Outsourced contract delivers 16.7% 52.4% 14.3% 9.5% 2.4% 3.74 0.885
quality services (7) (22) (6) (4) (1)

Cost efficiency has been 16.7% 47.6% 21.4% 11.9% 2.4% 3.81 0.969
achieved through outsourcing of (7) (20) (9) (5) (1)
IT services
IITA has become efficient in its 11.9% 59.5% 16.7% 9.5% 2.4% 3.69 0.897
service delivery after out (5) (25) (7) (4) (1)

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sourcing of IT services
The quality of service delivery 23.8% 38.1% 26.2% 9.5% 2.4% 3.71 1.019
has improved with outsourced (10) (16) (11) (4) (1)
IT services
Source: Primary data

Results in Table 4.12 above indicate that 27 (64.3%) of the respondents agreed that the contract

that guides outsourcing at IITA clearly defines the roles of the service provider. On the other

hand, 10 (23.8%) of the respondents were not sure while 5 (11.9%) disagreed with the statement.

The findings were verified with a mean value of 3.69 and the standard deviation of 1.047. Since

the mean value obtained was above average, it shows that most respondents were in agreement

with the idea that the contract which guides outsourcing at IITA clearly defines the roles of the

service provider. The above findings were supported by a key informant form the finance unit

who noted that the roles of the service provider are always clearly stipulated in the contract as

quoted:

“The roles of the service provider are normally clearly stipulated in contract

in order to facilitate outsourcing of the required goods and services. The

guidelines stipulate the terms and conditions which suppliers must abide by in

order to supply the goods and services required.” (Interview_002)

When respondents were asked whether the IT service contract clearly defines service level

agreements, 29 (69%) of the respondents agreed with the statement while 7 (16.7%) were not

sure and 6 (14.3%) disagreed with the statement. The corresponding mean value for the

statement was 3.74 and the standard deviation, 1.083. Since the mean value obtained was above

average, it shows that the majority respondents held the opinion that the IITA contract clearly

defines service level agreements.

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On statement that the evaluation process clearly defined in the IT service contract, 27 (64.3%) of

the respondents agreed while 11 (26.2%) were not sure and 4 (9.5%) disagreed with the

statement. The findings were verified with a mean value of 3.83 and standard deviation of 0.961

which shows that there were variations in the responses obtained. The fact that the mean value

obtained was above average shows that most respondents consented that the evaluation process

clearly defined the IITA service contract.

Respondents were similarly asked if the IT service contract has stated out monitoring level of the

end user. To this 20 (47.6%) of the respondents agreed while 13 (31.0%) were not sure, and 9

(21.4%) disagreed with the statement. The corresponding mean value for the statement was 3.33

while the standard deviation was 1.119 which shows that some respondents gave varying

responses. Since the mean value obtained was above average, it shows that most respondents

were in agreement with the statement. This was further confirmed by a key informant from the

finance Unit who had this to say:

“The IT contract is monitored on a continuous basis. The IT team is always at

the station, even though their contract provides for only 2 days. End users

always call the IT team in case there is need.” (Interview_004)

Asked whether the process of arbitration is clearly defined in out sourcing contract, 37 (88.1%)

of the respondents agreed, 2 (4.8%) were not sure while 3 (7.2%) disagreed with the statement.

The corresponding mean value for the statement was 4.10, which was way above average while

the standard deviation was 0.958, implying that some respondents gave varying responses. Since

64
the mean value obtained was above average, it shows that the majority were in agreement with

the statement.

Study findings further revealed that feedback process is clearly stated in the contract for IITA

services. This was supported by 37 (88.1%) of the respondents agreed compared to 4 (9.5%) who

were not sure, and 1 (2.4%) who disagreed with the statement. The corresponding mean value

was 4.05 while the standard deviation was 0.731, which shows that there were slight variations in

the responses obtained. Since the mean value obtained was way above average, it shows that

most respondents were in agreement with the idea that feedback process is clearly stated in the

contract for IITA services.

When asked whether service delivery is effective under outsourced contract, 33 (76.2%) of the

respondents agreed while 7 (16.7%) were not sure and 3 (7.2%) disagreed. The findings were

further verified with a mean value of 3.93 which was above average, implying that most

respondents consented that service delivery is effective under outsourced contract. On the other

hand, the standard deviation of 0.921 shows that there were slight variations in the responses

obtained. In support of the above, one key informant from the Research Unit had this to say:

“Service delivery is effective. It is characterized by timely response especially

on email, intercom call and internet services. This has helped to maintain a

high level of communication.” (Interview_005).

On the statement that outsourced services are easily accessed, 35 (83.3%) of the respondents

agreed while 5 (11.9%) were not sure and 2 (4.8%) disagreed. The corresponding mean value for

the statement was 3.98 which was above average while the standard deviation was 0.811. Since

65
the mean value obtained was above average, it shows that most respondents agreed that

outsourced services are easily accessed. Another question sought to know if outsourced contract

delivers quality services. To this, 29 (69.1%) of the respondents agreed while 6 (14.3%) was not

sure and only 5 (11.9%) disagreed with the statement. The findings were verified with a mean

value of 3.74 and standard deviation of 0.885, representing the number of respondents with

varying responses. The fact that the mean value obtained was above average, it shows that most

respondents consented that outsourced contracts at IITA deliver quality services.

During the study, 27 (64.3%) respondents agreed that the cost efficiency has been achieved

through outsourcing of IITA services. On the other hand, 9 (21.4%) were not sure while 6

(14.3%) disagreed with the statement. The findings were verified with a mean value of 3.81 and

standard deviation of 0.969 which shows that there were varying responses obtained. Since the

mean value obtained was above average, it shows that most respondents consented that the cost

efficiency has been achieved through outsourcing of IITA services.

It was further established that IITA has become efficient in its service delivery after out sourcing

of IT services. This was revealed by 30 (71.4%) respondents who agreed with the statement

while 7 (16.7%) were not sure and 5 (11.9%) disagreed with the statement. The corresponding

mean value for the statement was 3.69 while the standard deviation was 0.897, which shows that

there were variations in the responses obtained. In addition, 26 (61.9%) respondents agreed that

the quality of service delivery has improved with outsourced IITA services. On the other hand,

11 (26.2%) were not sure while 5 (11.9%) disagreed with the statement. The corresponding

mean value for the statement was 3.71 while the standard deviation was 1.019, which shows that

66
there were varying responses obtained. The fact that the mean value obtained was above average,

it shows that most respondents agreed with the statement.

4.5 Correlation coefficient matrix for outsourcing and service delivery

Table 4. 13: Pearson (r) correlation coefficient matrix of the component variables

Variables 1 2
Service delivery -1 1.000
Contract management -2 .806** 1.000

** Correlation is significant at the 0.01 level (2-tailed).

The findings in table 4.13 above revealed that contract management had a significant relationship

with service delivery because the correlation is significant at the 0.01 level. The Pearson

correlation coefficient (r=0.806) was above 0.5 which shows strong positive relationship with

service delivery. Therefore contract management has a statistically significant strong positive

relationship with service delivery at IITA. This means that improvement in contract management

can lead to improved service delivery at IITA.

4.5.1. Regression between contract management and service delivery

Regression analysis was further carried out in order to determine the strength of the relationship

between contract management and service delivery. Results from regression analysis are

presented in the table below:

67
Table 4. 14: Regression analysis for contract management and service delivery

Model Summary

Adjusted R Std. Error of

Model R R Square Square the Estimate

1 .806a .649 .640 .41075

a. Predictors: (Constant), Contract management

According to the results obtained, the coefficient for determination (Adjusted R Square) value is

0.640 which implies that supplier selection explains 64.0% variations in service delivery. R 2

value indicated how much of the dependent variable service delivery at IITA can be explained by

the independent variable contract management. Since it is high (64.0), it shows that the other

remaining percentage of 36 % is explained by other factors other than contract management.

4.5.2. Service Delivery at IITA-Uganda

Opinions on service delivery at IITA- Uganda were sought from Research officers and

operational staff using ten closed ended questions. The table 4.15 below presents the results.

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 Table 4. 15: Responses on Service Delivery at IITA-Uganda

Statement SA A NA D SD Mean St. Dev.

(5) (4) (3) (2) (1)

IITA has realized a reduction in 9.5% 28.6% 19.0% 28.6% 2.4% 3.31 1.115
time required to receive a delivery (4) (15) (8) (12) (1)
of a good or service
IITA receives its deliveries within 9.5% 28.6% 26.2% 35.7% 00% 3.12 1.017
the expected time (4) (12) (11) (15) (00)
IITA is affected by the delays in 28.6% 45.2% 16.7% 9.5% 00% 3.93 0.921
procurement of goods and services (12) (19) (7) (4) (00)
The goods and services received 4.8% 26.2% 19.0% 35.7% 14.3% 2.71 1.154
are of intended quality and (2) (11) (8) (15) (6)
conformance
The goods and services procured 9.5% 26.6% 28.6% 21.4% 14.3% 2.95 1.209
are of the right specifications (4) (11) (12) (9) (6)
There is improved quality of goods 19% 40.5% 23.8% 14.3% 2.4% 3.60 1.037
and services (8) (17) (10) (6) (1)

The goods and services received 19% 57.1% 11.9% 7.1% 4.8% 3.79 1.001
are worth the money paid for them (8) (24) (5) (3) (2)
IITA can implement its activities 21.4% 52.4% 14.3% 11.9% 00% 3.83 0.908
without support from donors (9) (22) (6) (5) (00)

69
IITA will remain in operation for 16.7% 50% 19% 11.9% 2.4% 3.67 0.979
more than 5 years from now (7) (21) (8) (5) (1)

IITA activities are sustainable 21.4% 38.1% 23.8% 11.9% 4.8% 3.60 1.106
(9) (16) (10) (5) (2)
Source: Primary data
Results in Table 4.15 above indicate that 19 (38.1%) of the respondents agreed that IITA has

realized a reduction in time required to receive a delivery of a good or service, 8 (19%) were not

sure and 13(31%) disagreed. The above findings were verified with a mean value of 3.31 and the

standard deviation of 1.115 which represents the number of respondents with varying responses.

The average mean of 3.0 obtained shows that most respondents held the idea that IITA has

realised a reduction in time required to receive delivery of a good or service. The above findings

were supported by one key informant from the Research Unit who noted that IT services have

partly contributed to reduction in the time for service delivery as quoted:

“Outsourcing IT services has led to a reduction in time required to receive

goods and services. It is efficient and improves service delivery by making it

faster. In fact, on a scale of 1 to 10, I can rate it at 9.5 because it significantly

contributes to service delivery.” (Interview_007).

On the statement that IITA receives its deliveries within the expected time, 43 (67.2%) of the

respondents agreed, 16 (25%) were not sure and 4 (6.3%) disagreed. The corresponding mean

value obtained was 3.12 with the standard deviation of 1.017 which shows that some respondents

gave varying responses. Since the mean value obtained was above average, it shows that the

majority respondents agreed with the statement.

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When respondents were asked whether IITA is affected by the delays in procurement of goods

and services, 16 (38.1%) of the respondents agreed, 11 (26.2%) was not sure, 15 (35.7%)

disagreed. The findings were further verified with a mean value of 3.93 and a standard deviation

of 0.921 which represents the number of respondents with varying responses. The fact that the

mean value obtained was above the average of 3.0, it shows that most respondents held the

opinion that IITA is affected by the delays in procurement of goods and services. In support of

the above findings, one key informant from the Finance Department noted that bureaucratic

tendencies cause delays in procurement of goods and services at IITA as indicated:

“Decision making process at IITA is so bureaucratic. It causes delays in the

procurement of goods and services which slows down service delivery.”

(Interview_003).

Respondents were similarly asked if the goods and services received are of intended quality and

conformance. To this statement, 13 (31%) of the respondents agreed, 8 (19%) were not sure, and

21 (50%) disagreed. The corresponding mean value for the statement was 2.71 while the

standard deviation of 1.154 shows that there were significant variations in the responses

obtained. Since the mean value obtained was below the average of 3.0, it shows that most

respondents held the idea that sometimes, the goods and services received are not of the intended

quality and conformance.

Asked whether the goods and services procured are of the right specifications, only 15 (36.1) of

the respondents agreed while 12 (28.6%) were not sure, 23 (35.9%) and 15 (35.7%) disagreed.

The corresponding mean value for the statement was 2.95 and the standard of 1.209 which shows

71
that there were significant variations in the responses obtained. Since the mean value obtained

was below average, it shows that most respondents held the idea that there are times when the

goods and services procured at IITA are not of the right specifications. In support of the above

findings, one key informant from the Finance Department revealed that at times, there are

mismatches in specifications and the services offered as indicated below:

“In some instances, the there have been mismatch against specifications

whereby the goods and services requested for are not the exact ones supplied.”

(Interview_005)

On the statement that there is improved quality of goods and services, 25 (59.5%) of the

respondents agreed, 10 (23.8%) were not sure, 7 (16.7%) disagreed. The findings were further

verified with a mean value of 3.60 and the standard deviation of 1.037 which shows that there

were varying responses obtained. The fact that the mean value obtained was above average

shows that most respondents held the idea that there is improved quality of goods and services.

When respondents were asked whether the goods and services received are worth the money paid

for them, 32 (76.1%) of the respondents agreed 5 (11.9%) were not sure, 17 (26.6%) disagreed.

The findings were further verified with a mean value of 3.79 and standard deviation of 1.001

which shows that some respondents gave varying responses. Since the mean value obtained was

above average, it implies that most respondents held the idea that the goods and services received

are worth the money paid for them.

Study findings further established that the IITA can implement its activities without support from

donors. This was supported by 31 (73.8%) of the respondents who agreed with the statement

although 6 (14.6%) were not sure while 5 (11.9%) disagreed with the statement. The

72
corresponding mean value for the statement was 3.83 which was above average while the

standard deviation was 0.908 representing the number of respondents with varying responses.

Since the mean value obtained was above average, it shows that most respondents held the idea

that the IITA can implement its activities without support from donors.

The study further established to know if the IITA would remain in operation for more than 5

years from the time of the study (2018). To this, 28 (66.7%) of the respondents agreed, 8 (19%)

was not sure while 6 (14.3%) disagreed. The corresponding mean value for the statement was

3.67 while the standard deviation was 0.979, which showed that there were slight variations in

the responses obtained. Since the mean value obtained was above average, it implies that the

majority respondents held the idea that IITA would remain in operation from more than 5 years

from the time when this study was conducted.

When respondents were asked whether IITA activities are sustainable, 25 (59.5%) respondents

agreed while10 (23.8%) were not sure and 7 (16.7%) disagreed. The findings were further

verified with a mean value of 3.60 which was above average and the standard deviation of 1.106

which shows that there were slight variations in the responses obtained. Since the mean value

obtained was above average, it shows that most respondents held the idea that IITA activities are

sustainable.

4.6. Correlation coefficient matrix for outsourcing and service delivery

Table 4. 16: Pearson (r) correlation coefficient matrix of the component variables

Variables 1 2 3 4 5

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 Service delivery -1 1.000

Outsourcing Decision making -2 .621** 1.000

Supplier selection -3 .681** .774** 1.000

Contract management - 4 .806** .671** .869** 1.000

** Correlation is significant at the 0.01 level (2-tailed).

4.6.1 Outsourcing decision making and service delivery

The findings in table 4.16 above revealed that outsourcing decision making had a significant

relationship with service delivery because correlation is significant at the 0.01 level. The Pearson

correlation coefficient (r=0.621**) was above 0.5 which shows strong positive relationship with

service delivery. Therefore, outsourcing decision making has a statistically significant strong

positive relationship with service delivery at IITA. This means that improvement in outsourcing

decision making can lead to improved service delivery at IITA.

4.6.2 Supplier selection and service delivery

The findings in table 4.16 above revealed that supplier selection had a significant relationship

with service delivery because the correlation is significant at the 0.01 level. The Pearson

correlation coefficient (r=0.681**) was above 0.5 which shows strong positive relationship with

service delivery. Therefore, supplier selection has a statistically significant strong positive

relationship with service delivery at IITA. This means that improvement in the techniques of

supplier selection can lead to improved service delivery at IITA.

74
4.6.3 Contract management and service delivery

The findings in table 4.16 above revealed that contract management had a significant relationship

with service delivery because the correlation is significant at the 0.01 level. The Pearson

correlation coefficient (r=0.806) was above 0.5 which shows strong positive relationship with

service delivery. Therefore, contract management has a statistically significant strong positive

relationship with service delivery at IITA. This means that improvement in contract management

can lead to significant increase in-service delivery at IITA.

4.7 Multiple regression analysis for outsourcing and service delivery

In the table 4.17 below, the researcher presents the magnitude of outsourcing decision making,

supplier selection and contract management on service delivery. This was done to determine the

better predictor component of service delivery at IITA.

Table 4. 17: Regression Analysis of the component variables

Model Un standardized Standardized T Sig.

Coefficients Coefficients
B Std. Beta
Error
(Constant) .359 .377 .953 .347
Outsourcing Decision .206 .139 .207 1.482 .146
Making
Supplier selection .211 .208 .212 1.013 .317
Contract management .831 .185 .851 4.502 .000
R =0.818 R- square = 0.670 F= 25.661 Sig = 0.000
Source: Primary data (2018)

The table 4.17 above shows the components of outsourcing strategy that is; outsourcing decision

making, supplier selection and contract management which significantly predict improvement in

75
service delivery as shown by significance level (.000). The regression analysis showed that the

study variables had a strong positive relationship with service delivery. Thus the study variables

explain 67.2% of the variance in service delivery at IITA.

The findings further revealed that contract management (Beta= .851, Sig. < .000) was a better

predictor of service delivery. This indicates that a unit improvement in contract management

leads to improvement in service delivery at IITA by 0.851 units or percent, and thus,

statistically significant. This is in line with (Ahimbisibwe, 2009) who contends that proper

contract management facilitates the achievement of improved delivery while defining details of

quality, efficiency, timing, and method of delivery of the corresponding inputs and out puts requ

ired from both parties to support the outsourced process. However, supplier selection (Beta

= .212, Sig. < .317) and out sourcing decision making with (Beta= .207, Sig. < .146) were not

significant predictors of service delivery at IITA. This is contrary to (Lindsay, 2001) who

contends that outsourcing decisions can lead to competitive advantage to the business entity.

Similarly, (Ahimbisibwe,2009) states that organizations are increasingly adopting outsourcing

as a strategy to cost reduction, increase efficiency and customer satisfaction. This however has

not been the case in some instance as some organization have not been able to realize these

objectives of outsourcing due to poor management of the outsourcing relationship.

Based on the findings, the policy implications are that more effort or priority in outsourcing

should be put mostly on contract management whose effects on service delivery is statistically

significant with Beta=0.851 (at P=0.000). An improvement in contract management by 1% leads

to a statistical significant improvement in service delivery at IITA.

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77
 CHAPTER FIVE

SUMMARY, DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS OF THE

STUDY

5.0. Introduction

This chapter presents the summary and discussion of findings while making reference to other

available literature. The research has drawn conclusions from study findings and made

recommendations for possible further studies. The general objective of this study was to

examine the effects of the outsourcing strategy on service delivery.

5.1. Summary of major findings

The study findings indicated that only contract management has a positive significant effect on

service delivery. However, outsourcing decision making, and supplier selection did not

significantly influence service delivery at IITA. This is because proper contract management

facilitates the detailed attention to quality, efficiency, timing, and method of delivery of the corre

sponding inputs and outputs required from both parties to support the out sourced process and

services, which makes service providers more efficient in providing required services.

5.1.1. The effect of out sourcing decision making on service delivery

Pearson’s correlation coefficient for outsourcing decision making and service delivery was r =

0.627** way above 0.5, and significant at 0.01 level (2-tailed) which shows a strong positive

relationship between out sourcing decision making and service delivery at IITA.

The regression analysis gave R2 value indicated how much of the dependent variable, service

delivery at IITA could be explained by the independent variable outsourcing decision making. In

78
this case, 0.394 could be explained, which is moderate. The standard error of the estimate

is .53989 and the adjusted R square value is 0.378. This explains how Outsourcing decision

making predicts 37.8% variation in service delivery at IITA, which implies that service delivery

is explained by outsourcing decision making by 37.8%. The Beta value = .207 and significance

value of .146 imply that outsourcing decision making has a weak insignificant effect on service

delivery at IITA.

The study also revealed that adequate planning before outsourcing IT service, setting goals and

staff involvement in decision making about outsourcing of the IT services, significantly

contributed to improved service delivery. Staff members are involved in decision making about

IT services because they are the end users of the IT services. All procurements are made on

adhoc arrangements and assessed on case by case basis. IITA seeks views of staff members

before deciding to outsource IT services because staff members from the user Units have to

request for quotation (RFQ), after which the quotations are evaluated to select the supplier based

on affordability within available budget.

5.1.2. The effect of supplier selection on service delivery

Pearson’s correlation coefficient for supplier selection and service delivery r = 0.678** was

above 0.5, and significant at 0.01 level (2-tailed) which shows a strong positive relationship

between supplier selection and service delivery at IITA. The regression analysis gave R2 value

which indicated how much of the dependent variable, service delivery can be explained by the

independent variable supplier selection. In this case, 0.457 could be explained, which is

moderate. The standard error of the estimate is .51073 and the adjusted R 2 value is 0.444.

Supplier selection predicts service delivery at IITA. It implied that service delivery is explained

79
supplier selection by 44.4%. The Beta value = .212 and significance value of .317 imply that

supplier selection has a weak insignificant effect on service delivery at IITA.

Further the study revealed that attaching a lot of importance to the supplier before selection,

adherence to the criteria of selecting suppliers and ensuring that the outsourced supplier has a

shared vision with IITA significantly contributes to improved service delivery. There is

transparency in the selection of suppliers because all applicants are evaluated on merit to narrow

down the scope about specifications and budget affordability. The quotations are evaluated in

consultation with the end users for collective decision making, upon which a purchase order is

issued and delivery made. IITA selects suppliers basing on their competencies in line with the

different areas of operation, and the criterion for selecting suppliers is clearly followed. It

commences with identification of need, making specification, request for Quotations (RFQ),

evaluation and approval, based on which issuance of a purchase order considering the lowest

bidder is followed. IITA often considers the reliability of potential suppliers to ensure that they

are competent enough and can be relied on to supply the required goods and services. Their

reliability is determined by their performance in any previous contract handled, expertise and

financial status.

5.1.3 Contract management and service delivery

Pearson’s correlation coefficient for contract management and service delivery r = 0.806** was

above 0.5, and significant at 0.01 level (2-tailed) which shows a strong positive relationship

between contract management and service delivery at IITA. The regression analysis gave R2

value which indicated how much of the dependent variable, service delivery can be explained by

the independent variable contract management. In this case, 0.649 could be explained, which is

very large. The standard error of the estimate is .41075 and the adjusted R 2 value is 0.640.

80
contract management predicts service delivery at IITA, implying that service delivery is

explained by contract management by 64.0%. The Beta value = .851 and significance value

of .000 imply that contract management has a strong positive significant effect on service

delivery at IITA.

The study also revealed that clear definition of the arbitration process in outsourcing contract,

clear statement of the feedback process in the contract for IT services as well as clear definition

of the evaluation process in IT contracts significantly contribute to improved service delivery. It

was established that the roles of the service provider are normally clearly stipulated in contract in

order to facilitate outsourcing of the required goods and services. The guidelines stipulate the

terms and conditions which suppliers must abide by in order to perform the contract of goods and

services required.

5.2. Discussion

5.2.1. The effect of outsourcing decision-making process on service delivery

Study findings revealed that staff members at IITA-Uganda are involved in decision making

about outsourcing of the IT services because they are the end users of the IT services. This is in

line with (Mushega, 2010) who asserted that, the involvement of team members in decision

making during the outsourcing process leads to improved quality goods and services. However,

in spite of involving staff members in decision making about outsourcing at IITA-Uganda, there

are instances where the goods and services received do not meet the required quality. This shows

that involving staff members in decision making is not enough to guarantee quality service

delivery. This is because, there are several other factors such as contract monitoring which

influence service delivery. The results also contradict Gibbons (2005) who noted involving a

focused team of members at different levels of decision making levels is of paramount

81
importance during contract implementation for better service delivery. However, findings from

this study revealed that involving team members is not sufficient to ensure improved service

delivery. Rather, organizations ought to make adequate planning to ensure adequate financial

resources and conduct enough market research in order to procure the required items with the

right specifications.

Whereas the available literature supports team involvement of end users and adequate planning

of procurement (Ahimbisibwe, 2009), findings from this study revealed that IITA does not carry

out adequate procurement planning before establishing the need for goods and services. The

organisation largely employs the adhoc practice of outsourcing for goods and service as revealed

during the interviews. Therefore, this means that an organisation may not engage in planning

practices but obtain the required goods and services on an adhoc basis. While IT support services

are adequately planned and supported by a service agreement, other IT related goods and

services such as acquisition of anti-virus keys, and Backup Drives are on adhoc basis. Much as

end users are involved in decision making, this practice in a way slows down services delivery

because there could be delays in process approvals and therefore delivery of goods by outsourced

Suppliers may also delay as compared to a prior planned process. This is contrary to

Ahimbisibwe (2009) who states that outsourcing requires planning and strategic decision taken

in view of long term perspective enhances service delivery. The main objective of Outsourcing

being reduced costs, increased efficiency and improved service delivery, an organization may not

realize the full potential of outsourcing relationships and efficiency benefits perceived if

adequate planning is not deliberated on.

82
The study also established that the IITA has a clear vision and mission to conduct agriculture

research that makes it necessary to outsource IT services and that the objectives at IITA are clear

to staff members. This is substantiated by Fritsch et al., (2002) who asserted that outsourcing

should be aligned to organisational objectives. This can be further strengthened by seeking views

of staff members before deciding to outsource services because staff members from different

Organizational Units are the end users and have to participate in drawing of specifications and

request for quotation (RFQ), on the basis of which evaluations are made in regard to supplier

competence and IITA, affordability within available budget. Similarly, Gibbons (2005) states

that during the process of outsourcing, the requirements of the organization should be aligned

with supplier’s competencies, at the time of negotiating for services so that a contract is

developed with a shared idea. On the contrary findings revealed that sometimes, the goods and

services procured do not meet the right specifications, in spite of aligning the organizations’

requirements with supplier’s competencies. Therefore, supplier competence does not guarantee

the provision of quality services.

According to findings from this study, outsourced company is considered in service delivery

before outsourcing processes at IITA, and that management identifies internal service

capabilities before outsourcing. This is consistent with Eger et al., (2002) who noted that

outsourcing resulting from good decision making, will provide an organization with successful

benefits. However, there are instances where the quality of services provided is below the

expected standards, not achieving value for money, despite considering internal service

capabilities before outsourcing. It was noted that IITA usually sets objectives before outsourcing

and that management considers the contribution of outsourcing on service delivery before

83
deciding to outsource. This is in agreement with Goldsmith, (2000) who noted that management

needs to evaluate the effect of outsourcing on operations, strategic, structural, functional

requirement, and implementation levels to ensure improved service delivery, increased efficiency

and reduction in costs. This thought is supported by the Transaction Cost Theory (TCT) which

supported the study. The Theory argues that outsourcing is the alternative through which

organizations use external Service Providers to reduce internal transaction cost. Jongerius and

Sie, (2010). The TCT theory further emphasize that transaction costs will determine whether an

Organization uses internal staff to perform a service or outsources depending on the impact of

costs on Internal transactions promotes transparency and quality service delivery.

5.2.2. Supplier selection and service delivery

Study findings revealed that selection of suppliers at IITA was based on merit. Applicants are

evaluated on merit and on basis of their competence to narrow down the scope in reference to

specifications and budget affordability. This is in agreement with Lever (1999) who recommends

that evaluation and analysis suppliers should be based on merit and core competencies of

applicants to promote transparency and quality service delivery. Whereas IITA selects suppliers

based on their competencies, clearly following the criterion of selecting suppliers of IT services

as established during the study, the quality of service delivery is sometimes poor evidenced by

inefficiency and delays in completion of assignments. This is contravenes (Mclvor, 2000) who

stated selection of suppliers based on competency and following the right criterion leads to

quality service delivery. Therefore, suppliers can be selected based on their competency and

following the right criterion but still offer substandard services especially if they are not properly

facilitated like releasing the required financial and other material resources on time.

84
According to findings of this study, outsourced suppliers have a shared vision with IITA. Their

reliability is usually considered before outsourcing. Selection of suppliers whose vision is similar

to the contractor enhances service delivery. Findings further revealed that IITA considers the

reliability of potential suppliers to ensure that they are competent enough and can be relied on to

sustainably supply the required goods and services. The reliability of suppliers is determined by

their previous performance in any previous contract handled, expertise and financial status. This

argument is substantiated by Zhu et al., (2001) who note that core competencies and the track

record of potential service providers should be considered. Simialrly, (Mclvor, 2000) further

states that determining the reliability of suppliers encompasses assessment of their financial

stability. This was found to be in agreement with (Zhu et al., 2001) who noted that outsourcing

process should consider the track record of the service providers, commitment and recognition

within the particular industry, in relation to customers’ satisfaction levels and the Service Level

Agreements (SLA).

Further still, findings from this study revealed that IITA attaches a lot of importance to the

suppliers before selection and their performance is regularly monitored. This is corroborated by

(Lever, 1999) who noted that contractor’s performance should be evaluated and also includes

seeing the contractors at work to observe the working environment and learn about their staff

retention and turn-over, IT systems, equipment, management processes and quality assurance

procedure. Hence, the importance attached to suppliers is paramount in determining the quality

of service delivery. In the same vein, findings from this study revealed that outsourced suppliers

are carefully examined and evaluated to assess whether the process leads to cost saving as an

objective of outsourcing.

85
5.2.3. Contract management and service delivery

Findings from this study revealed that, for proper contract management, IITA clearly defines the

roles of service providers and states the procedure to guide outsourcing. The procedures as well

as terms and conditions are clearly stipulated within the contract to facilitate efficient

outsourcing of the required goods and services. The findings are corroborated by Baily, et al.

(2005) who asserted that terms and conditions of the contract should clearly indicate the rights

and obligations of both parties. However, findings from this study revealed that there are times

when suppliers supply goods short of the intended specifications and quality, despite being

clearly stipulated in the contract. This shows that stipulating procedures and terms and conditions

governing the contract is not enough to ensure quality service delivery. Rather, management out

to ensure regular contract monitoring to ensure that service providers offer services that are in

line with the requirements as stated in the contract.

Whereas findings from this study further revealed that IT service contracts at IITA clearly define

Service Level Agreements (SLA), on the basis of which evaluations on service are made,

sometimes, the contracted service providers fall short of fulfilling the agreements and offer

services of poor quality. This contravenes Willococks and Lester (2007) who emphasized that

during outsourcing, both parties ought to adhere to service level agreements. On the contrary,

Barthelemy and Geyers (2004) observed that SLA do not cover important aspects such as the

contingencies of the contract that may arise. Therefore, contingencies which are not covered in

the SLA affect services delivery at IITA because they are not catered for by the services

providers.

86
Findings from this study revealed that the evaluation procedure at IITA is clearly defined in the

IT service contract to ensure proper service delivery. This is in agreement with (Misra, 2004)

who stated that outsourcing organizations are required to choose and evaluate procedures which

lead to desired performance by outsourced parties and that the contract should be evaluated

objectively (Misra, 2004). Therefore, clear definition of the evaluation procedure contributes to

improved service delivery. It was further established that the IT service contract states out

monitoring level by the end users. The IT contract is monitored on a continuous basis and the IT

team is always at the station to provide the necessary support. This is in line with Tsao et al.,

(2004) who asserted that the achievements of outsourcing objectives are only possible under

formal outsourcing investments, monitoring and evaluations as well as under methodologies that

evaluate quantifiable and tangible objectives such as ensuring response time, availability,

reliability leading to end user satisfaction.

Study findings further revealed that the process of arbitration in outsourcing is clearly defined for

proper contract management. This is in agreement with (Baily, et al., 2005) who states that the

supplier’s terms and conditions ought to be set to protect the supplier while the buyers’ terms and

condition also protect the buyer. However, despite protecting the interest of both IITA and the

contracted service providers, sometimes, the quality of services provided does not meet the set

standards. This shows that protection of service providers does not guarantee efficient service

delivery. To ensure quality service delivery, feedback process needs to be clearly stated in the

contract for IT services. This is in line with Lin and Pervan (2003) who agrees that volumes of

notices, feedback and consents required for contract performance control in an outsourcing

agreement ought to be observed. Through notices, both parties are able to receive feedback

87
which facilitates improved service delivery. Whereas this study established that outsourced

services are easily accessed, outsourced contract delivers quality services and the cost efficiency

achieved through outsourcing of IT services, (Ahimbisibwe, 2009) who asserted that contract

performance standards needs to focus at the achievement of minimum standards with, emphasis

on maximizing service delivery at minimal costs.

5.3. Conclusions

5.3.1. Outsourcing decision making and service delivery

According to study findings, 78.6% of the respondents agreed that end users were involved in

decision making in relation to outsourcing process at IITA, 14.3% were not sure while 7.1%

disagreed. These two, later categories represent 21.4% of the study respondents. Much as the

study results revealed that outsourcing decision making positively and significantly affects

service delivery, the responses of the minority at 21.2% should not be ignored by IITA,

especially in light of operating without a pre-qualified list of service providers which implies that

due to lack of adequate planning, the procurement process is not fully understood by the entire

organization. This therefore leads to conclusion that this weakness in procurement though in

small percentages, may lead to some inefficiencies in service delivery, which requires that both

the organization and end users should be fully involved in the affairs of procurement decision

making.

5.3.2. Supplier selection and service delivery

Study findings concluded that supplier selection has significant positive impact on service

delivery. Therefore, it leads to a conclusion that proper suppliers selection based on their

technical competence which the organization can use to cover up for lack of internal capacity or

88
supplement, available competencies leads to increased efficiency and improved service delivery.

This combined with proper choice of bidding methods, evaluation and competence of suppliers

as well as their reliability in the industry will contribute to reduction of transaction costs and lead

to efficiency and improved service delivery.

5.3.3. Contract management and service delivery

The study established that improved service delivery significantly depends on proper formulation

of service contracts in the procurement of goods and services that aid service delivery. It is

therefore concluded that proper definition of procurement objective, setting service level

agreement and establishment of a clear feedback system in contract performance, clearly

defining roles and responsibilities of each party, stating monitoring and evaluation stages,

contributes to improved service delivery.

5.4. Recommendations

Since study findings revealed that most procurements are made on adhoc arrangements without

prior procurement plans, it is logical recommended that IITA should always prepare procurement

plans advance before outsourcing of goods and services. This will save the organization from

making hasty decisions in the process of outsourcing, thus improving the quality of service

delivery.

The study further recommends that IITA should always plan procurement, pre-qualify suppliers

from whom to select service providers throughout an agreeable period of time say a year. This is

derived from study findings which revealed that IITA has no procurement plan and pre-qualified

Suppliers. This will make it easy for IITA to trace record of performance for the pre-qualified

89
suppliers and always select those with a good track record of performance as far as service

delivery is concerned.

In order to improve service delivery at IITA, contract management must be improved via regular

monitoring to ensure that outsourced companies adhere to the terms and conditions agreed up on.

As seen in the research findings, the criteria of selecting a supplier of IT is sometimes not clearly

followed due to adhoc outsourcing. Therefore, this study recommends that IITA should always

adhere to and follow the criteria of selecting suppliers for IT and all other services. The criteria

such as open bidding and selection of supplier based on merit and competency should always be

respected in order to ensure quality service delivery.

5.5. Area for further research

Further research may be conducted on how different outsourcing strategies affect service

delivery at IITA-Uganda. In addition, further study may be carried out on the effect of contract

monitoring on service delivery. Or the impact of outsourcing on quality of service in agriculture.

90
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 APPENDICES

Appendix I. Questionnaire for staff members

Dear Respondent,

My name is Janet Anyango, a graduate student of Procurement and Supply Chain Management

studies at UMI, I am carrying out a research study and my main focus is on outsourcing of IT

services and its contribution to Service delivery in None Government Organizations, a case study

of International Institute of Tropical Agriculture (IITA). Your views as a respondent/staff of

IITA will be considered as part and parcel of this Research study.

Kindly provide accurate information on the following issue to the best of your ability following

the instructions given after each section and kindly return your completed questionnaire to the

Researcher. The response given will be treated with utmost confidentially and shall not be used

for any other purpose whatsoever other than for this study. In order to emphasize this, do not

write your name or any identifying marks or initials on the questionnaire. Your cooperation will

be highly appreciated. Thank you

PART I.

Section I): Background Information about the respondents and his or her Unit (Please tick

the option which you consider the most appropriate to)

A. Respondents’ profile (please tick appropriately).

1. Gender: - Male___________. Female___________________

2. Age : (20-25)___________(26-35)_________(36-45)___________(46-55)_________

i
 3. Your highest level of Education

Primary_____, Secondary _____, Tertiary____, University_____, Others (Please specify)

____________________________________________________

4. Which IITA section do you work R4D ( ), R4D-CS( )

5. Your Job Title____________________________________________________________

6. Years spent in service at IITA: 1-5____, 6-10____, 11-15 ____, 16-20,____, 21 and

above_____

PART II

Section I): Outsourcing decision making Process on service delivery

1. (a) Instruction: For question 1-10 below, kindly indicate by ticking one option on a scale

of 1 – 5, to which extent you agree with the following experiences of IT services at

IITA. The options are: 5= Strongly agree(SA), 4=Agree (A) 3= Not agree (NA)

2=Disagree(DA), 1= Strongly disagree (SDA). Please do not select more than one

alternative for each statement.

S/N Statement 1 2 3 4 5

1 Staff are involved in decision making

about outsourcing of the IT services

2 IITA carries out adequate planning

ii
 before outsourcing IT service, which

makes it easy for decision making

3 IITA has clear Vision and Mission to

conduct Agriculture research that

makes it necessary to Outsource IT

Services.

4 The objectives for me at IITA are clear

and within achievable limits

5 IITA seeks views of staff member

before deciding to outsource IT

services.

6 Dependence on outsourced company is

considered in service delivery before

outsourcing process at IITA

7 Management identifies/assess internal

service capabilities before outsourcing

8 Objectives are usually set before

outsourcing

9 Management considers the

contribution of outsourcing on service

delivery before deciding to outsource

10 The final result of outsourcing

decisions are usually put into

iii
 consideration before outsourcing

(b). Briefly comment about decision making process in regard to outsourcing at IITA

________________________________________________________________________

________________________________________________________________________

_______________________________________________________________

c). what would you consider to improve decision making process at IITA regarding IT services.

___________________________________________________________________________

___________________________________________________________________________

__________________________________________________________________

d). Suggest 3 ways in which you think decision making can be improved.

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

Section II): Supplier selection process on service delivery

1 a). Instructions: For question 1-10, below kindly indicate by ticking one option on a scale of 1

– 5, to which extent you agree with the following experiences of IT services at IITA. The

options are: 5= Strongly agree (SA), 4=Agree. 3= Not agree (NA) 2=Disagree (DA), 1= strongly

disagree (SDA). Please do not select more than one alternative for each statement.

No. Question 1 2 3 4 5

1 Suppliers are evaluated and selected

through a transparent process

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 2 Suppliers are selected based on their

competencies

3 The criteria of selecting a supplier of

IT is clearly followed

4 Costs are evaluated prior to selecting

a supplier.

5 The outsourced supplier has a shared

vision with IITA.

6 Supplier reliability is usually

considered before outsourcing

7 A lot of importance is attached to the

supplier before selection.

8 Performance of Suppliers is regularly

monitored

9 Outsourcing suppliers are carefully

examined

10 IITA evaluates outsourcing to assess

whether the saved resources can re-

invested

(b). Comment briefly on the IT service provider selection

v
______________________________________________________________________________

______________________________________________________________________________

_____________________________________________________________________

(c). State what you would like improved

(d). Suggest 3ways in which you would wish IT service contracting improved.

___________________________________________________________________________

___________________________________________________________________________

__________________________________________________________________

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SECTION III: Contract Management by Service level agreements on Service delivery.

1. ( a). Instructions: For question 1- 12 below, kindly indicate by ticking one option on a

scale of 1 – 5, to which extent you agree with the following experiences of IT services at

IITA. The options are: 5= Strongly agree (SA), 4=Agree (A). 3= Not agree (NA)

2=Disagree (DA), 1= Strongly disagree (SDA). Please do not select more than one

alternative for each statement.

No Question 5 4 3 2 1

1 The contract that guides

outsourcing at IITA

clearly defines the roles of

the service provider

2 The IT service contract

clearly defines Service

level agreements

3 The evaluation process is

clearly defined in the IT

service contract.

4 IT Service contract has

stated out monitoring

level of the end user.

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 5 The process of arbitration

is clearly defined in

outsourcing contract

6 Feedback process is

clearly stated in the

contract for IT services.

7 Service delivery is

effective under outsourced

contract

8 Outsourced services are

easily accessed

9 Outsourced contract

delivers quality services

10 Cost efficiency has been

achieved through

outsourcing of It services

11 IITA has become efficient

in its service delivery after

outsourcing of IT services.

12 The quality of service

delivery has improved

with outsourced IT

services

(b). Briefly comment on management of IT contract at IITA

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______________________________________________________________________________

______________________________________________________________________________

_____________________________________________________________________

(c). Briefly state what you would wish to improve in IT service contract

(d). Briefly state 3 ways how you would wish to improve IT services Management

Service delivery Scale

Timeliness S A N D S

A S D

1. IITA has realized a reduction in time required to receive a 5 4 3 2 1

delivery of a good or service

2. IITA receives its deliveries within the expected time 5 4 3 2 1

3. IITA is affected by the delays in procurement of goods and 5 4 3 2 1

services

4 The goods and services received are of intended quality and 5 4 3 2 1

conformance

5 The goods and services procured are of the right 5 4 3 2 1

specifications

6 There is improved quality of goods and services 5 4 3 2 1

7 The goods and services received are worth the money paid 5 4 3 2 1

for them

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8 IITA can implement its activities without support from 5 4 3 2 1

donors

9 IITA will remain in operation for more than 5 year from 5 4 3 2 1

now

1 IITA activities are sustainable 5 4 3 2 1

x
 Appendix II: Interview Guide for Key Informants about Outsourcing of its services at

IITA.

A). Outsourcing Decision Making process on Service Delivery.

1. Please tell us some of the activities that are outsourced at IITA

2. What does the outsourcing decision making process at IITA involve?

3. Are you satisfied with the way how IT services are managed at IITA?

4. How has decision making process at IITA affected Service delivery?

5. Briefly state how you would wish to improve the quality in IT in service delivery at IITA

6. Briefly comment about efficiency of service delivery at IITA

B). Supplier Selection Process on Service Delivery

1. How is Supplier selection done at IITA?

2. Please briefly explain the supplier selection process at IITA.

3. Are you satisfied with the way suppliers are selected at IITA?

4. How has supplier selection affected service delivery at IITA.

5. How would you rate the supplier selection process at IITA?

6. Briefly explain the roles and responsibilities of supplier in IT services at IITA

C). Contract Management by Service Level Agreements on Service Delivery

1. Outsourced service delivery contracts are clearly defined for a particular purpose.

2. How would you rate the performance of IT contract obligations?

3. In your opinion, do you think IT service contract is clearly monitored?

4. Briefly explain how you wish feedback of IT services delivery should be handled

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5. How is service delivery at IITA affected by IT services?

6. Do you think that the Service level Agreement in IT service contracts have been clearly

defined?

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Appendix III: Introductory Letter

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Appendix IV: Field Research Letter

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Appendix V: Anti -Plagiarism Report