Abstract:
Outsourcing may be a powerful strategic tool to chop price, improve performance, and refocus
on the core business functions. However, the outsourcing practice of CBE is confronted with
challenges such as; lack of support from internal stakeholders and top management, lack of
well-defined service level agreement, difficult to measure the service like that of tangible
products and unable to get committed outsourced staffs. This Study aims to assess the challenges
and prospects of outsourcing practices the activities in commercial bank of Ethiopia. The study
areas CBE branches under Ambo district by focusing outsourcing administrative office. The
population of the study was the management members in the outsourcing management office,
district, branch managers and customer service managers in each branch’s. Data were collected
through questionnaires, interview and internal documents of the Bank. The research is a
descriptive study applying both quantitative and qualitative approach to analyze the data.
Interpretation is made on the mean, frequency, and percentage of data. The study used primary
and secondary data. The finding of the study shows that outsourced service assist commercial
bank of Ethiopia to focus more on core functions and strategic areas, to save management time,
to reduced cost and expand its branch assertively. On the other side, difficult to measure service
quality, low employee belongingness, conflict of interest among outsourced and low quality of
employee were the major challenges of the bank due to outsourcing. Finally supported the
finding, the researcher suggested that observance and analysis system have to be compelled to
be place in situ for timely corrective action before time elapses and rectification becomes thus
tough. When it is used in a calculated and well-designed method; outsourcing may bring legion
edges to the client organization. If applied while not correct assessment of the capacities of
service suppliers, it should involve irreparable damages within the short-range and will draw
innumerable risks that will disturb time-honored structure culture. Hence, any type of
outsourcing is probably going needed maximizing edges and minimizing risks.
