Abstract
This article aims to evaluate the driving forces of outsourcing strategies on the organizational performance of mobile network operators in mainland Tanzania. The objectives are to identify the driving forces of outsourcing and determine the challenges of outsourcing in telecommunication companies. The article adopted a descriptive cross-sectional survey. The selection of mobile companies is based on high market share and operation period. Findings show that customer needs for high-quality services, high-rated change in service, reduction of operational expenditure, and accessing the world’s capability are among the major driving forces for outsourcing. Dependability, loss of security, hidden costs, and selection of competent partners to mention a few are the challenges faced by telecom companies. It is noted that outsourcing enables network operators to advance their organizational performance in terms of operating cost, productivity, profitability, and market share. However, customer satisfaction suffers due to the inconsistency of the quality of service offered. Therefore, it is advised that mobile operators closely monitor outsourcing service providers to ensure that agreed service levels are met, thereby, safeguarding the reputation of the company to customers.
In Tanzania, the telecommunication sector was in control of Tanzania Post and Telecommunication Corporation (TPTC) up to 1993. Until the liberation policy took place, TPTC was split into three entities: Tanzania Posts Corporation, Tanzania Communication Commission, and Tanzania Telecommunication Company Limited. After 1997, more telecommunication companies came into the business. As of today, about seven mobile companies are operating in Tanzania’s mainland. With the marginal increase in mobile users, stiff competition among telecom companies is observed. Techniques such as reducing call and data tariffs, mobile money transfer transaction fees, and special offers for students on the campus are employed to attract more customers, thus, increasing company revenue.
Due to the competition in the economic atmosphere, the need for the finest existing technologies and the creation of value among others are the two objectives that the service firms cannot always reach by their means. Therefore, strategies for enhancing new systems of partnership with research centers or clients, through new ways of integration with suppliers and outsourcing an organization’s service are used.
Mobile network operators are facing external forces of increasing expenses due to increased salary and lower switching costs for the subscriber from one operator to another operator among other factors. Therefore, to overcome this competition and to have above-average earnings, mobile operators are seeking all possible ways to reduce their expenses. Through outsourcing, mobile network operators can eliminate various costs such as construction, maintenance, and transmission costs and make significant financial savings.1
Outsourcing strategy has been a vital tool for various companies due to global business and regulatory changes. The approach involves transferring service delivery from in-house to an external provider, and this results in significant organizational changes.2 These changes affect the organization positively or negatively as any business agreement always has risks involved.3
Generally, information technology (IT) and business process outsourcing (BPO) are the two major forms of outsourcing services.4 The former strategy aimed to improve the management of specific applications such as network administration, server management, and software development by an external service provider, while the latter strategy focused on call center outsourcing, financing, and accounting, human resource outsourcing as well as claims outsourcing.
The increase in competition among various business sectors has forced companies to explore strategies beyond traditional strategies to reduce costs.5 However, in Tanzania, there is a lack of information regarding strategic drivers of outsourcing, especially for the mobile network operators. Several studies have been conducted to examine the challenges and the motives of outsourcing strategy and its effectiveness. For instance, Kataza has researched the effect of outsourcing on organizational performance.6 Also, Mkumbo has done research in the aspect of business process engineering and looked at how it affects the quality of service.7 Despite the existence of various literature, to the best of the author’s knowledge, research on the performance implications of outsourcing strategies in telecommunications is less addressed. Therefore, this article is based on evaluating the driving forces of outsourcing strategies on the organizational performance of mobile network operators in Tanzania mainland. The rest of this article is organized as a literature review on outsourcing followed by the methodology. Afterward, we present the findings and discuss them. Finally, a conclusion is drawn and associated research limitations are presented.
Literature Review
The research article is based on the agency theory, transaction cost analysis (TCA), and resource-based theory. Agency theory provides a foundation connection between the agent and the client. The client engaged the agent in some work for consideration, and a contract is required to control the relationship between the two.8 Agent theory applies to the analysis of internal organizations. Contract monitoring is expensive and ineffective, especially in an organization. As a result, it encourages self-interested behavior, particularly when it comes to shrewd opportunism. Opportunism is the practice of misleading customers to benefit the vendor financially. When an opportunity presents itself, agents seize it to further their interests. Morality and social norms somewhat reduce the risk of opportunism, but they cannot completely prevent all opportunistic action.9 Agent theory applies to the analysis of internal organizations and contract monitoring.10
The foundation of transaction theory is the idea that the company seeks to cut down on the expenses related to hiring new personnel.11 An approach to gauge site capacity is TCA. TCA can assess a transaction’s performance costs, the company’s capacity, and the expense of carrying out different types of transactions on the business. TCA is used to measure the organization’s capacity, and the results are then used to boost each system component’s capacity. Resource-based theory is a paradigm that helps businesses manage their resources, diversify their business, and take advantage of business opportunities.12 According to transaction cost theory, companies outsource their production and production processes to save costs, increase cost-effectiveness, and boost profits. This theory states that the key considerations for an organization to use outsourcing strategies are relative transaction costs and production costs related to the process and services.13
In concept a corporation is viewed as a coordinated collection of resources aimed at achieving its goals and strategic objectives. For a company to maintain a competitive advantage, it has been frequently used as a managerial framework to identify essential resources.14 The theory offers a crucial framework for deriving explanations and projections of the basic drivers of a firm’s performance and competitive advantage.15
With a limited number of full-time employed staff, organizations are considering external procurement functions such as accounts, transport, computer services, telecommunication tower operations, and purchasing. This not only improves organizational performance but also reduces operational costs and capital investment, brings about risk sharing, and the outsourcing strategy allows employees the time to perform their tasks to the company’s satisfaction.16 Outsourcing can be viewed as the management strategy by which organizations delegate their noncore functions to specialized external providers, enabling them to concentrate on core activities that add more value to the organization.17
To catch up with rapid advancement in technology, specifically in data communication and service provision, mobile network operators are forced to conduct several in-house trainings, which are generally costly and time-consuming.18 Changes in the business environment fuel and drive competitive market pressure in the market. This increased market pressure leads organizations to reconsider their business strategy and their position within the value chain. According to Juric, Ashfaque, and Saunders, mobile network operators decided to opt for outsourcing strategies due to the extensive scale of their network operations.19 Also, the strategy to manage large workforces (network operations) is a key consideration before implementing outsourcing strategies.
Quality of service offered is among the major reasons companies choose to outsource.20 Mobile network operators excel in managing their operations and networks, especially with capacity expansion and modernization efforts, therefore fulfilling customer expectations and maintaining high service quality. Quality services attract more subscribers, leading to increased market share. Technological changes enable mobile operators to differentiate themselves through quality thereby capturing market share. Mobile operators are now taking advantage of the situation by outsourcing the services such as customer care centers to the experienced outsourcing service provider.
Moreover, outsourcing enhances the efficiency of the company operations in various ways, such as accelerating the reimbursement process, which improves cash flow and overall performance (Kite 2013). Mobile network operators need to increase the efficiency of basic technical operations, which is very crucial for their success. However, it was found that oil companies, despite their large size, improved their flexibility through outsourcing, which in turn enhanced their operational efficiency.
Mobile network operators are also keen to reduce Operational Expenditure (OPEX), as it outlines the cost reductions leading to financial benefits. According to Lawson, Tyler, and Potter, reducing operational costs is vital for profitability, with strategies focusing on increasing sales while simultaneously cutting down costs.21 Outsourcing helps minimize various expenses, including administrative costs, fixed machinery costs, employee costs, insurance costs, and financing costs.
Moreover, stiff competition in the telecom industry has forced operators to seek new ways to reduce operational costs. Operations that require substantial capital and operating expenditure such as tower infrastructure management are frequently outsourced. This helps telecom operators optimize their capital expenditure.22 Utilizing the resources of outsourced service providers, mobile network operators can reduce investments in networking operations, warehousing, call centers, distribution, and maintenance by leveraging the resources of the outsourced service provider. Consequently, capital expenditure can be redirected toward developing new products, services, processes, and equipment.
However, the appropriate outsourcing strategy is necessary to ensure the company meets the desired performance target. Researchers in Quélin and Duhamel proposed a four-stage model for creating a solid outsourcing strategy.23 The model comprises outsourcing objective formulation, organizational capability assessment, external capability, competitor’s assessment, and formulating outsourcing policy.
On the other hand, the strategic outsourcing process includes three stages which are the strategic stage, transitional stage, and operational stage.24 In the first stage, the firm assesses its capabilities and selects activities that may find it necessary to outsource followed by looking for a qualified competitive outsourcing service provider. A contract negotiation process, project execution, and transfer of activities are carried on the second stage. The last stage includes the operational phase based on agreed objectives and performance measures.
Impact of BPO on firm performance is reported in Engáiro, Murrithi, and Njeri.25 It is argued that there is a strong relationship between motives for human resource outsourcing and improved business performance. The authors recommended mobile network operators to practice external human resource services as it provides higher quality of service than an in-house human resource team. The finding correlates with the study presented in Mahmud, Billah, and Chowdhury.26
Moreover, cost-saving analysis in services outsourcing on the performance of telecommunication industry is reported in Josee, Gongera, and Anyika.27 Researchers claimed that cost saving is relative to the time period in which outsourcing is performed. In the long run of the telecom company, outsourcing cannot be beneficial in terms of cost savings. However, in a situation that requires new skills for a short period of time, outsourcing can be advantageous to the organization.
Mbanje and Tefera investigated the drivers for and risks associated with BPO in telecom companies.28 It is reported that factors such as access to exceptional skills and talents needed for unique resources and reduction in capital investment drive firms to BPO. Yet, outsourcing risks such as loss of control over critical business processes, inconsistence quality of offered service, loss of confidential data, and deterioration of business-to-customer relationship are pointed out.
Material and Methods
Data Collection and Sampling
The article adopted a descriptive cross-sectional survey design aiming to investigate the drivers for and challenges of outsourcing strategies on the organizational performance of the selected mobile network operators. The survey data was captured from two giant mobile network operators. To adhere to ethical issues, the two mobile network operators can be termed Operator A and Operator B. The mobile network operator’s selection criteria are the operation period in Tanzania mainland and high market share. The article adopted the formula
where n = sample size, z = Z score, that is the critical value of normal distribution at a given confidence level. For this article, the confidence level is 95% and henceforth the Z score is 1.96. The population of the study consisted of 236 direct employees of both mobile network operators A and B. Furthermore, a sample of randomly selected 103 customers out of 157 respondents is used in this article. The employee respondents were stratified according to the population in their respective companies to come up with the sample of the article. Based on the above formula, a sample of 146 direct employees of operators A and B is drawn from the population. Stratified random sampling was further used to determine the sample size from each involved company as shown in Table 1, where ni = (Ni/N) * n where ni = sample size for stratum, Ni = population size for stratum i, N = total population size, and n = total sample size.
| Operator | Respondents (Ni) | Sample size (ni) |
| A | 139 | 86 |
| B | 97 | 60 |
| Total | 236 | 146 |
| Operator | Respondents (Ni) | Sample size (ni) |
| A | 139 | 86 |
| B | 97 | 60 |
| Total | 236 | 146 |
The article used the survey with open questionnaires having a five-point Likert Scale (Strongly Disagree (1), Disagree (2), Neutral or Not Sure (3), Agree (4), Strongly Agree (5) for employees and Excellent (5), Very Good (4), Good (3), Fair (2), and Poor (1)). The questionnaire was printed and distributed to 447 respondents, where 290 respondents were employees and 157 were customers. The feedback is collected from 236 employees and 103 customers. The response rates are about 81.3% and 65.6% for employees and customers, respectively.
Demographic Information
Demographic information of employees and customers of the respondents are given in Table 2. For the case of employees, males represent 54.8% of the total sample size, while females represent 45.2%. Most respondents were aged between 31 and 40, constituting 42.5% of all respondents. Both the 21 and 30 age group and those aged 41 and above had respondents 42 (28.8%). Moreover, the majority of the staff held a first degree, with 80 individuals making up 54.8% of the respondents. This was followed by the 29 staff members with a second degree (19.9%), and 37 respondents (25.3%) holding an ordinary diploma. These findings indicate that the employees in the mobile network operators are well educated.
Table 2 Demographic Information of Research Participants
| Employees | Customers | |||||
| Variable Gender | Description | Frequency | Percentage | Description | Frequency | Percentage |
| Male | 80 | 54.8 | Male | 55 | 53.4 | |
| Female | 66 | 45.2 | Female | 48 | 46.6 | |
| Age | ||||||
| 21–30 | 42 | 28.8 | 18–30 | 27 | 26.2 | |
| 31–40 | 62 | 42.4 | 31–40 | 45 | 43.7 | |
| 41 and above | 42 | 28.8 | 41 and above | 31 | 30.1 | |
| Educational level | ||||||
| Diploma | 37 | 25.3 | Diploma | 25 | 24.3 | |
| First degree | 80 | 54.8 | First degree | 43 | 41.7 | |
| Second degree | 29 | 19.9 | Second degree | 23 | 22.3 | |
| Others | Others | 12 | 11.7 | |||
| Working experience | ||||||
| 0–5 years | 36 | 24.7 | Less than 1 year | 3 | 2.9 | |
| 6–10 years | 61 | 41.8 | 1–3 years | 4 | 3.9 | |
| 10 years and above | 49 | 33.6 | 3–5 years | 15 | 14.6 | |
| 5–10 years | 27 | 26.2 | ||||
| 10 years and above | 52 | 52.4 | ||||
| Employees | Customers | |||||
| Variable Gender | Description | Frequency | Percentage | Description | Frequency | Percentage |
| Male | 80 | 54.8 | Male | 55 | 53.4 | |
| Female | 66 | 45.2 | Female | 48 | 46.6 | |
| Age | ||||||
| 21–30 | 42 | 28.8 | 18–30 | 27 | 26.2 | |
| 31–40 | 62 | 42.4 | 31–40 | 45 | 43.7 | |
| 41 and above | 42 | 28.8 | 41 and above | 31 | 30.1 | |
| Educational level | ||||||
| Diploma | 37 | 25.3 | Diploma | 25 | 24.3 | |
| First degree | 80 | 54.8 | First degree | 43 | 41.7 | |
| Second degree | 29 | 19.9 | Second degree | 23 | 22.3 | |
| Others | Others | 12 | 11.7 | |||
| Working experience | ||||||
| 0–5 years | 36 | 24.7 | Less than 1 year | 3 | 2.9 | |
| 6–10 years | 61 | 41.8 | 1–3 years | 4 | 3.9 | |
| 10 years and above | 49 | 33.6 | 3–5 years | 15 | 14.6 | |
| 5–10 years | 27 | 26.2 | ||||
| 10 years and above | 52 | 52.4 | ||||
On the other hand, customer respondents are covered by 53.4% of males and 46.6% of females. The age between 31 and 40 accounts for 43.7% of respondents, 30.1% are above 41 years of age, and 26.2% are between 18 and 30years old. The education level of the customer indicates that the majority are educated. The findings showed that out of 103 targeted customer respondents, the majority, 52 individuals (52.4%), have more than 10 years of experience with mobile services, 27 respondents (26.2%) have between 5 and 10 years of experience, and 15 respondents (14.6%) respondents have between 3 and 5 years of experience. A smaller number of customer respondents, 4 (3.9%) and 3 (2.9%), have less than 1 year and between 1 and 3 years of experience, respectively.
Research Findings and Discussion
The employees were asked if the organization is undertaking outsourcing and the nature of outsourced services. The majority of respondents agreed that their organizations employ outsourcing in services such as tower management, call center (customer care), sales, marketing, and advertisement. Table 3 depicts responses from interviewed employees.
Table 3 Response from Employee
| Statement | Operator Name | |||
| A | B | Total | ||
| Is your company practicing outsourcing? | Yes | 61 | 85 | 146 |
| Total | 61 | 85 | 146 | |
| Statement | Operator Name | |||
| A | B | Total | ||
| Is your company practicing outsourcing? | Yes | 61 | 85 | 146 |
| Total | 61 | 85 | 146 | |
Drivers for Outsourcing
The general knowledge of driving forces toward outsourcing in their working business firm is captured statistically. The findings are elaborated based on responses of the employees on provided questionnaires.
High-Rated Change in Services
According to Claussen, Kretschmer, and Oehling, up to 2009 networks of 50 mobile network operators were still managed in-house, with only a portion of the network operations being outsourced.29 Consequently, mobile network operators must continually update their services to keep pace with technological advancements, meet stakeholders’ requirements, and improve their organizational performance. The rapid advancement in technology forces network operators to seek alternative ways to stay aligned with these changes. Table 4 illustrates the research findings that 52.7% of the employees strongly agreed that an organization’s decision upon services outsourcing is motived by a high-rated change in services, 42.5% agreed, and then 4.8% of employees are not sure if a high-rated change in service can be a driving fuel for outsourcing.
| Response | Frequency | Percent |
| Strongly agree | 77 | 52.7 |
| Agree | 62 | 42.5 |
| Neutral | 7 | 4.8 |
| Disagree | 0 | 0 |
| Strongly disagree | 0 | 0 |
| Total | 146 | 100.0 |
| Response | Frequency | Percent |
| Strongly agree | 77 | 52.7 |
| Agree | 62 | 42.5 |
| Neutral | 7 | 4.8 |
| Disagree | 0 | 0 |
| Strongly disagree | 0 | 0 |
| Total | 146 | 100.0 |
The mean and standard deviation of findings revealed that the majority of the respondents “strongly agreed” that (mean = 4.48; standard deviation = 0.590) the high-rated change in service is a key reason for the organization to embark on outsourcing. These findings align with a study by Juric, Ashfaque, and Saunders, which observed that mobile network operators decided to employ an outsourcing strategy due to the large scale of network operations.30 Furthermore, the ability to manage a large workforce involved in network operations is always considered before implementing outsourcing strategies.
| Response | Frequency | Percent |
| Strongly agree | 83 | 56.8 |
| Agree | 49 | 33.6 |
| Neutral | 14 | 9.6 |
| Disagree | 0 | 0 |
| Strongly disagree | 0 | 0 |
| Total | 146 | 100.0 |
| Response | Frequency | Percent |
| Strongly agree | 83 | 56.8 |
| Agree | 49 | 33.6 |
| Neutral | 14 | 9.6 |
| Disagree | 0 | 0 |
| Strongly disagree | 0 | 0 |
| Total | 146 | 100.0 |
High Customer Need for Quality Services
The need for improved quality of services is highlighted as among the driving forces for outsourcing.31 The findings showed that 83 employees strongly agreed that high demand for quality services from the customer motivates their organization to outsource. Additionally, 49 respondents agreed, while 14 respondents were uncertain whether this factor influenced their organizations’ preferences for outsourcing strategies. This variable had a mean score of 4.59 and a standard deviation of 0.583.
Desire to Improve Operational Efficiency
From the findings in Table 6, 59.6% of the respondents agreed that the desire to improve operational efficiency is among the driving forces that propel mobile network operators to outsource. In total, 32.9% of the respondents agreed with that factor, while 4.8% of the respondents were not sure. It is also noted that 2.7% of the respondents disagreed with the statement. The research variable has a mean score of 4.67 and a standard deviation of 0.486.
| Response | Frequency | Percent |
| Strongly agree | 87 | 59.6 |
| Agree | 48 | 32.9 |
| Not Sure | 7 | 4.8 |
| Disagree | 0 | 0 |
| Strongly disagree | 4 | 2.7 |
| Total | 146 | 100.0 |
| Response | Frequency | Percent |
| Strongly agree | 87 | 59.6 |
| Agree | 48 | 32.9 |
| Not Sure | 7 | 4.8 |
| Disagree | 0 | 0 |
| Strongly disagree | 4 | 2.7 |
| Total | 146 | 100.0 |
The findings are supported by the research conducted by Kivuva, who revealed that oil companies improved their flexibility due to outsourcing which, in turn, improved their operational efficiency.32 Both mobile network operators A and B embarked on managed services by establishing several customer service centers to simplify voucher distribution, new customer registrations, and mobile money services. This in turn leads to the improvement of their operational efficiency.
Accessing the World Capability
The research by Abdulkader highlighted that outsourcing allows organizations to access the skills and techniques from the global talent pool at lower costs.33 Moreover, small startup businesses can greatly benefit from outsourcing, as it enables them to delegate activities to service providers with advanced technologies and guaranteed data security. This research found that 56 (38.4%) respondents strongly agreed that the need to access global capabilities was the key factor for their organization to pursue outsourcing, while 63 (43.2%) agreed, 17 respondents (11.6%) were unsure, 8 respondents (5.5%) strongly disagreed, and 2 respondents (1.4%) disagreed on that factor. The responses yielded a mean of 4.17 and a standard deviation of 0.920. The findings are illustrated in Figure 1.
Figure 1 Employee responses on the need to access world capability.
Outsourcing Challenges
Apart from the several discussed advantages of employing outsourcing in the organization, there are several challenges such as hidden costs, loss of privacy, proper partner selection, procurement delay, and dependability to mention a few. In this article, employee responses toward challenges for outsourcing are captured and presented.
Hidden Costs
Hidden costs from consultation fees to expertise on how, when, and with whom to engage in outsourcing agreements are often forsaken by telecom network operators during the initial planning stage. Responses from the employees regarding whether their organization faced hidden costs as a challenge in outsourcing are summarized in Table 7. The findings revealed that 66 respondents (45.2%) “strongly agree” that hidden costs were an issue in their outsourced services. In total, 37 respondents (25.3%) agreed with the statement, while 36 (24.7%) were not sure. Only 7 respondents (4.8%) disagreed, indicating that they believe there are no hidden costs associated with their outsourced services.
| Response | Frequency | Percent |
| Strongly Agree | 66 | 45.2 |
| Agree | 37 | 25.3 |
| Neutral | 36 | 24.7 |
| Disagree | 7 | 4.8 |
| Strongly Disagree | 0 | 0 |
| Total | 146 | 100.0 |
| Response | Frequency | Percent |
| Strongly Agree | 66 | 45.2 |
| Agree | 37 | 25.3 |
| Neutral | 36 | 24.7 |
| Disagree | 7 | 4.8 |
| Strongly Disagree | 0 | 0 |
| Total | 146 | 100.0 |
The mean and standard deviation computed from the findings are 4.12 and 0.924, respectively. The obtained results concur with Patil and Patil, who showed that hidden cost arises from expenses and time spent in in-house discussions for determining the services to be outsourced, preparing the required paper or the contract, and consulting charges.34 Furthermore, contract amendments, traveling, and requirement changes costs can be encountered.
Loss of Security
Customer privacy plays an important role in business, as it not only safeguards the user’s information but also the content shared between users. With the increasing adoption of digital technology, customer information such as location and mobile money transaction details can be used by third parties to gain business advantage. Moreover, a conflict of interest can occur when an outsourced partner serves more than one mobile network operator. The collected data shows that 23 respondents (15%) “strongly agreed” that there are security issues with their outsourced services, 39 respondents (26.7%) “agreed” to the statement, 77 (52.7%) respondents were “not sure,” and 7 respondents (4.8%) “disagreed.” This variable has a mean score of 3.53 and a standard deviation of 0.807. The captured responses are presented in Table 8.
| Frequency | Percent | |
| Strongly Agree | 23 | 15.8 |
| Agree | 39 | 26.7 |
| Neutral | 77 | 52.7 |
| Disagree | 7 | 4.8 |
| Strongly Disagree | 0 | 0 |
| Total | 146 | 100.0 |
| Frequency | Percent | |
| Strongly Agree | 23 | 15.8 |
| Agree | 39 | 26.7 |
| Neutral | 77 | 52.7 |
| Disagree | 7 | 4.8 |
| Strongly Disagree | 0 | 0 |
| Total | 146 | 100.0 |
Dependability
Kivuva observed that a company’s excessive dependence on external sources can affect its performance, as the organization may become partially under the control of a business partner.35 This situation could be due to delays in taking appropriate measures or poor quality of the service offered. Employee responses as shown in Table 9 indicate that 23 respondents (15.8%) “strongly agreed” that dependability is a challenge their company faces due to outsourcing, while 82 respondents (56.2%) “agreed,” and 14 respondents (9.6%) were “not sure” whether dependability is the challenge. In total, 18 respondents (12.3%) “Strongly disagreed” with the statement, and 9 respondents (6.2%) “disagreed.” The results are given in Table 9.
| Frequency | Percent | |
| Strongly Agree | 23 | 15.8 |
| Agree | 82 | 56.2 |
| Neutral | 14 | 9.6 |
| Strongly Disagree | 18 | 12.2 |
| Disagree | 9 | 6.2 |
| Total | 146 | 100.0 |
| Frequency | Percent | |
| Strongly Agree | 23 | 15.8 |
| Agree | 82 | 56.2 |
| Neutral | 14 | 9.6 |
| Strongly Disagree | 18 | 12.2 |
| Disagree | 9 | 6.2 |
| Total | 146 | 100.0 |
Selection of Partner
Mobile network operators must carefully choose their outsourcing partners to meet their objectives and goals. Selecting inappropriate partners for outsourced services can lead to poor performance and even a decline in the customer base due to substandard service quality from an unqualified partner. Disappointments in outsourcing often result from outsourcing practices that neglect the strategic operations, financial standing, and quality standard of the outsourcing service provider.36 The biggest challenges in IT outsourcing are the selection of the right vendor and deciding which functions to outsource and which to keep in-house.
The findings as depicted in Figure 2 show that 23 respondents (15.8%) “strongly agreed” with the question posed, 30 respondents (20.5%) “agreed,” and 59 respondents (40.4%) were “not sure” whether the selection of partner was the challenge for their mobile network operator. In total, 18 respondents (12.3%) “strongly disagreed” and 16 respondents (11%) “disagreed.” The obtained response resulted in a mean score of 2.79 and a standard deviation of 1.244.
Figure 2 Employee responses on partner selection as the outsourcing challenge.
Customer Satisfaction
Evaluation of customer satisfaction on customer care services and network availability is vital as it reveals customer views toward offered service and may help the network mobile operator to act accordingly. In an era when mobile applications are used to offer a number of services via internet such as chat room, house renting and route planning for travelers, mobile gadgets are increasingly demanding more bandwidth. It is therefore important for a mobile network operator to invest in current technologies such as LTE and 5G that offer bandwidth improvement and reduce tariffs per bytes accessed to attract more customers. Another factor that can help in retaining and attracting customers is how fast their queries are handled. Research by Getrude Moragwa shows that it took more than 60 minutes for a customer call to be connected to the first call center agent. In this article, customer response toward network and call center service satisfaction is presented.37 The responses are given in Table 10.
Table 10 Respondent Views on Customer Satisfaction on Customer Care Service and Network Availability
| Customer Care Service | Network Availability | |||
| Frequency | Percentage | Frequency | Percentage | |
| Excellent | 3 | 2.9 | 8 | 7.8 |
| Very good | 27 | 26.2 | 18 | 17.5 |
| Fair | 18 | 17.5 | 30 | 29.1 |
| Good | 34 | 33 | 20 | 19.4 |
| Poor | 21 | 20.4 | 27 | 26.2 |
| Total | 103 | 100 | 103 | 100 |
| Customer Care Service | Network Availability | |||
| Frequency | Percentage | Frequency | Percentage | |
| Excellent | 3 | 2.9 | 8 | 7.8 |
| Very good | 27 | 26.2 | 18 | 17.5 |
| Fair | 18 | 17.5 | 30 | 29.1 |
| Good | 34 | 33 | 20 | 19.4 |
| Poor | 21 | 20.4 | 27 | 26.2 |
| Total | 103 | 100 | 103 | 100 |
Correlation and Regression Analysis
The data collected from the research questions are analyzed using Pearson’s correlation and multiple regression models to explore the relationship between the variables. Table 11 presents a correlation analysis between the main variables examined in the article.
Table 11 Correlation Analysis
| Drivers | Challenges | Organizational Performance | ||
| Drivers | Pearson Correlation | 1 | ||
| Sig. (2-tailed) | ||||
| N | 146 | |||
| Challenges | Pearson Correlation | –0.059 | 1 | |
| Sig. (2-tailed) | 0.476 | |||
| N | 146 | 146 | ||
| Organizational Performance | Pearson Correlation | 0.188a | –0.427b | 1 |
| Sig. (2-tailed) | 0.023 | 0.000 | ||
| N | 146 | 146 | 146 | |
| Drivers | Challenges | Organizational Performance | ||
| Drivers | Pearson Correlation | 1 | ||
| Sig. (2-tailed) | ||||
| N | 146 | |||
| Challenges | Pearson Correlation | –0.059 | 1 | |
| Sig. (2-tailed) | 0.476 | |||
| N | 146 | 146 | ||
| Organizational Performance | Pearson Correlation | 0.188a | –0.427b | 1 |
| Sig. (2-tailed) | 0.023 | 0.000 | ||
| N | 146 | 146 | 146 | |
aCorrelation is significant at the 0.05 level (2-tailed).
bCorrelation is significant at the 0.01 level (2-tailed).
The findings indicate that there is a linear relationship among the variables studied. Specifically, there is a weak correlation between drivers and challenges (r = –0.059), a weak correlation between drivers and organizational performance (r = 0.188), and a moderate correlation between challenges and organizational performance.
Regression Analysis
The purpose of conducting regression analysis is to demonstrate how the dependent variables are influenced by the independent variables. The Adjusted R Square is used to assess the predictive power of the study model, with a computed value of 0.198. This indicates that 19.8% of the variations in the organizational performance among mobile network operators are explained by the drivers and challenges of outsourcing strategies, while 80.2% remain unexplained. This suggests a need for further research to identify additional factors influencing the impact of outsourcing strategies on the organizational performance of mobile network operators in the country. The model summary is given in Table 12.
| Model | R | R Square | Adjusted R Square | Standard Error of the Estimate |
| 1 | 0.458a | 0.209 | 0.198 | 0.66663 |
| Model | R | R Square | Adjusted R Square | Standard Error of the Estimate |
| 1 | 0.458a | 0.209 | 0.198 | 0.66663 |
aPredictors: (Constant), Challenges, Drivers
With the help of ANOVA software, clarification on whether the model could predict organizational performance based on independent variables is conducted. The F statistic (F = 18.933) is significant at a 95% confidence level (Sig. F < 0.05), indicating that the model possesses predictive power. This confirms a statistically significant relationship between outsourcing drivers, challenges, and organizational performance of the mobile network operators. Table 13 depicts the coefficient of determinants findings from the computational tool.
Table 13 Coefficients of Determination
| L Model | Unstandardized Coefficients | Standardized Coefficients | T | Significance | |
| β | Std. Error | Beta | |||
| (Constant) | 4.884 | 0.750 | 6.510 | 0.000 | |
| Drivers | 0.299 | 0.136 | 0.163 | 2.194 | 0.030 |
| Challenges | –0.698 | 0.125 | –0.418 | –5.608 | 0.000 |
| L Model | Unstandardized Coefficients | Standardized Coefficients | T | Significance | |
| β | Std. Error | Beta | |||
| (Constant) | 4.884 | 0.750 | 6.510 | 0.000 | |
| Drivers | 0.299 | 0.136 | 0.163 | 2.194 | 0.030 |
| Challenges | –0.698 | 0.125 | –0.418 | –5.608 | 0.000 |
aDependent Variable: Organizational Performance
The established regression model for the article is:
where Y, D, and C are organizational performance, outsourcing drivers, and outsourcing challenges, respectively.
The regression equation suggests that if all factors (outsourcing drivers and outsourcing challenges) are held constant, the organizational performance of the mobile network operators would be 4.884. Furthermore, with all other independent variables at zero, a unit increase in outsourcing drivers would positively affect the organizational performance of the mobile network operators by 0.299, whereas, a unit increase in outsourcing challenges would negatively impact the organizational performance of the mobile network operators by –0.698. The results indicate that outsourcing challenges have a greater effect on the organizational performance of mobile network operators compared to outsourcing drivers.
Conclusion
Regarding outsourcing and organizational performance, the findings indicate that outsourcing helps mobile network operators enhance their organizational performance in terms of profitability, cost efficiency, productivity quality of service, and market share. However, the findings revealed inconsistency regarding the quality of service provided through outsourcing activities. Often, in cases, mobile network operators do not comply with some set of quality-of-service parameters set by regulatory bodies, despite claims of improved quality performance by employees.
Additionally, findings of regression analysis delineate that it is imperative for mobile network operators considering undertaking rigorous analysis of the outsourcing challenges as they mostly impact organization performance than the outsourcing drivers. This will help the firm to mitigate risks that would arise due to outsourcing strategy and improve its organizational performance.
Mobile network operators manage complex networks that rely on third-party power and transmission services. Therefore, they must closely monitor their outsourcing service providers to ensure that the service level agreement (SLA) is adhered to and all obligations are met. This will help mobile network operators avoid network outages, which can disturb customer usage, revenue, and the reputation of the company. To avoid risks and opportunisms, a multi-sourcing technique whereby multiple firms provide different services on behalf of network operators can be employed. This not only reduces the burden to a single outsourcing service provider, but it also provides a means for closely monitoring the firm performance on the agreed objectives.
Moreover, this research was confined to only two mobile network operators. Further studies should incorporate more mobile network operations to capture the broader picture of outsourcing strategies and their impact on the quality of service are vital. With the vast increase in mobile phone usage and the need for speedy broadband connectivity, research on how outsourcing impacts mobile network coverage and fosters introduction to new mobile network technologies such as 5G and beyond 5G can be eyed as a continuation of this work.
Notes
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