Logistics Outsourcing Services and Performance of Firms in the Tele-Communications Sector: A Case of Airtel Rwanda Ltd

Abstract

This study assessed the effect of out-sourcing services on performance of firms in telecommunication sector with reference to Airtel Rwanda Ltd. The specific objectives were to determine effect of financial systems, network monitoring tools services, and supplier network responsiveness outsourcing on organizational performance of Airtel Rwanda Plc the study provides useful data to management of Airtel to assist it in service delivery and quality performance for the outsourced services. The study targeted 65 senior managers and key employees at Airtel Rwanda Ltd and sampled 56 respondents using Yamane formula. Primary and secondary data collection techniques were both using through questionnaire and interview guide. Data was analyzed using Pearson’s correlation analysis to establish the relationship between variables. Results to the first objective show that the logistic process response to unexpected demand changes and the effectiveness in delivery of shipments both scored means of 4.597. These variables scored means of 4.376, 4.376 and 4.038 respectively. There was the significant correlation between rapidly adjusts warehouse capacity to address demand changes and project time (r=.206; p-value=.000). Results to the second objective that all respondents agreed that their company uses outsourcing in its operations and as a result, they indicated that the supply chain operating system responds rapidly to changes in product volume demanded by customers (mean 4.921). The grand mean of these factors was 4.498 showing that generally there was higher responsiveness of the supply chain systems to customer needs. For  the effect on responds rapidly to changes in product mix demanded by customers on quality, time cost, the study ascertained that responds rapidly to changes in product mix demanded by customers is statistically significant with quality (r=0.122*;p value=0.035). Results on effectively expedites emergency customer orders felt that it is significantly correlated with an increase of quality of services (r=0.123*; p value=0.034). Results to the third objective shows that the grand mean was 4.155. It was indicated that major suppliers consistently accommodated requests (mean of 4.712) and the major suppliers changed product volume in a relatively short time (Mean of 4.259). Results show that major suppliers consistently accommodate our requests was insignificant with the quality of services (r=0.080, p-value=.0169), and major suppliers consistently accommodate our requests was insignificantly correlated with efficient and effective use of cost (r=0.013, p-value=.822). Finally, the study found a significant correlation between Major suppliers consistently accommodate our requests and timely delivered of services to beneficiaries (r=0.105, p-value=0.071). All the correlations were statistically significant given that the p value was < 0.05 proposing that an increase in major suppliers consistently accommodate our requests was insignificant with the quality of services increase quality of services, timely delivered, efficient and effective use of cost allocated and vice versa. In conclusion, the study concludes that Airtel Rwanda Plc in Rwanda have outsourced financial system billing. Airtel Plc had outsourced networking monitoring tools which play a pertinent role to the organizational success. Airtel has masts/towers and fleet management that contribute to organizational performance.  Finally, the study recommends that to adopt masts/towers and fleet management in means, the government should revise competition policy, and contract duration for outsourcing activities. Future studies should consider conducting similar research in different types of companies for comparison of results with the aim of coming into consensus on the generalization of the results.

Keywords: Outsourcing, in-housing development, telecommunication, core business activities.