INFORMATION SYSTEMS OUTSOURCING DRIVERS AND SERVICE DELIVERY OF COMMERCIAL BANKS IN KENYA

Information system is key in the operations of commercial banks. The study was aimed at establishing IS outsourcing drivers and service delivery of commercial banks in Kenya. It was specifically aimed to establish ways that need for quality, cost, flexibility, access to technology and risk of obsolesce drives firms to adopt IS outsourcing drivers of commercial banks in Kenya. The study used descriptive research design in its methodology. The study was guided by Resource based view Theory and transactional cost theory. The study used primary data which was collected and was affected by use of structured questionnaires. Head of departments and the equivalents were the targeted population from the 44 commercial banks Kenya. These questionnaires were issued through drop and pick method, coded, keyed and analyzed using both descriptive and regression analysis. Information system outsourcing drivers which were cost, quality, flexibility, need to reduce obsolesce and access technology was the independent variables while service delivery was the dependent variable which was measured by number of new accounts opened, customer satisfaction, timeliness in service delivery. The study findings on objective one on the IS outsourcing drivers indicated that to a great extent cost was a driver of IS outsourcing as indicated by a mean value of 4.0, Flexibility to a moderate extent as indicated by a mean value of 3.7, focus on strategic issues indicated a mean of 3.8, access to technology indicated a mean value of 3.6, reduce risk of obsolesce to a moderate extent:3.6 and quality to a moderate extent:3.7. This indicated that to a moderate to a large extent all the IS outsourcing drivers had been implemented as IS outsourcing drivers of commercial banks in Kenya. The findings on objective two on the effect of IS outsourcing drivers on service delivery indicated that IS outsourcing drivers have a positive impact on service delivery of commercial banks in Kenya. 60 percent of variations in service delivery in commercial banks was affected by IS outsourcing drivers. The major limitation of the study is that it was based on commercial banks only. Other future academicians should research on IS outsourcing drivers in other firms. There is need to study on IS outsourcing drivers and performance of other sectors other than commercial banks.