Drivers and risk of business process outsourcing in South African mobile telecommunication industry

Abstract

Mobile telecommunications service providers outsource various activities like logistics, assembly operations, manufacturing and design. However, little research has been conducted in Southern Africa to establish the actual drivers triggering mobile telecommunication companies to implement business process outsourcing (BPO) and the risks associated with implementation. This research aims to redress the existing knowledge gap and the limited body of literature by conducting research to establish the drivers and risks of implementing BPO. A structured, closed-ended questionnaire collected raw data from 210 employees. Descriptive statistics were conducted to establish the drivers triggering mobile telecommunication companies to implement BPO. Overall, the results concluded that some of the key drivers of implementing BPO by the telecom operators are reduction in capital investment, thereby freeing up limited capital funds more available for core areas, and the company can have access to unique resources skills and talents. The results also indicated that the risks of BPO implementation include the potential loss of control over critical functions and the difficulty of ensuring service quality and consistency from the service provider. The results will help the corporate management to make decisions about outsourcing based on quantifiable results instead of managerial estimates. While the study confined itself to the mobile telecommunications companies, more research can be conducted in other South African industries, most notably banks and learning institutions that are also important BPO hubs worthy of further examination.