INFORMATION SYSTEMS OUTSOURCING VERSUS SYSTEMS DEVELOPMENT: A COMPARATIVE STUDY OF THE PREFERRED CHOICES OF THE DIFFERENT BANKS IN NAKURU TOWN

Abstract

Information systems outsourcing and Information systems development are two options available to most banks operating at this age of technology. Outsourcing may not be a new thing in organizations. In the ancient Roman Empire, tax collection was outsourced. With the emergence of highly developed technology, organizations have the option to use their own experts; systems analysts, systems designers and programmers and systems administrators, who are regularly trained to keep pace with the dynamic technology or make an arrangement with an external entity for the provision of goods and services tosupplement or replace internal efforts. This study sought to find out  why the cases are different: to reveal the general underlying difference which generates or allows such a variation. The target population in this study was banks operating in Nakuru Town, Kenya. The research instruments were questionnaires that were administered to a sample frame consisting of systems users (employees), experts and the managers. Interview schedules were also used. Chi square method of data analysis wasused. Like cases are treated alike, and different cases are treated differently; the extent of difference determined how differently the two cases were treated. The findings of the study indicate that Information Systems outsourcing is favoured by a majority of banks in Kenya and this is informed by  the availability of competent providers of  this core business and the tremendous cost of staff training and retention.