Business Process Outsourcing and Firm Performance of Selected Real Estate Firms in Nairobi City County, Kenya

Abstract

Today’s ever-increasing competitive environment requires firms to seek for better ways to create value. In the organization era, firms continue to face tougher competition in the business environment and business process outsourcing is a critical strategy that improves a firm’s competitive capabilities by delivering value to customers. Business process outsourcing has emerged as a widely adopted strategy among firms in various sectors. The general objective of the study was to establish the effect of business process outsourcing on organizational performance of real estate firms in Nairobi City County. The specific objectives of the study were to determine the effect of Information Technology Outsourcing, Knowledge Process Outsourcing, Administration Support Systems and Project Management Skills Outsourcing on performance of selected real estate firms in Nairobi City County. The study was founded on Transaction Cost Economics, Resource-Based View and Contingency Theory. The population of interest in this study comprised of 245 real estate firms in Nairobi City County registered in accordance with the Estate Agents Act while the respondents of the study comprised of the real estate manager. The study used primary data that was obtained using questionnaires administered to real estate firm managers. Statistical Package for the Social Sciences will be used qualitative and quantitative data analyses. The findings of the study showed that real estate firms in Nairobi City County outsource information technology outsourcing, knowledge process outsourcing, administrative support systems outsourcing and project management skills to a great extent. The study concluded that Information Technology Outsourcing, Knowledge Process Outsourcing, Administration Support Systems and Project Management Skills Outsourcing positively and significantly influence performance of selected real estate firms in Nairobi City County. The study recommended that in order for real estate firms in Nairobi City County to improve their performance, there is need to outsource information communications and technology (ICT) infrastructure such as IT support services, software applications, computer network infrastructure, IT security infrastructure and IT training consultancy. The study also recommended real estate firms to outsource knowledge processes including managing performance and legal obligations, contract management and law, business and market research, building and research as well as research and development.