Outsourcing Of Facilities Management Services In Commercial Banks In Ghana ; A Conceptual View On Potential Risks And Threats

Ghana’s banking system has experienced interesting developments in the past two decades. Products such as international funds transfer, consumer/hire purchase loan and travelers’ cheque, personal computer banking, telephone banking, internet banking, branchless banking, SMS banking have been developed (Abor, 2005). Automated teller machines (ATMs) have become common, giving clients the freedom to transact business at their own convenience (Abor, 2005; Hinson, Amidu and Ensah, 2006). The development of these products has brought fierce competition within the banking industry; as a result, the financial sector has to rethink the way business is carried out, because of this competitive edge. Such competitive edge is driven by business and technological factors especially improvement in telecommunication networks and advancement in computer technology in Ghana (Hinson, Amidu and Ensah, 2006). In business today, the power balance has shifted from supply to demand push. Technological factors; especially developments in information technology are as much a cause as an effect of the transformation to new ways of doing business (Beulen, Ribbers & Roos, 2006). As a result of these developments, traditional value chains are being unbundled (Parker, 1999). One may ask whether such contemporary ways are evident in the Ghanaian banking sector as well? Commercial banks in Ghana are no exception to these changing business trends. Consequently, outsourcing of services has now become paramount to banks in Ghana. IT outsourcing is a major part of outsourcing decisions in commercial banks in Ghana. In Abstract: Ghana’s banking sector is currently faced with swift competition due to the increasing number of players in the market. Over the past ten (10) years, the number of commercial banks in the country has doubled. Banks are faced with the challenge of developing innovative products and services, and also expand rapidly. Facilities management support services are critical to this trend of development. Commercial banks need to make a delicate choice between make or buy of these support services (use-in-house expert or outsource). Unarguably, the need for banks to concentrate on their core business of banking and finance and outsource other non-core services to enhance shareholders wealth cannot be over emphasized. Although outsourcing has gained global recognition, the practice is quite new to commercial banks in Ghana. In recent times, commercial banks have outsourced numerous non-core services such as ICT, janitorial services, security, and even part of bank’s human resources. Whereas outsourcing might come with some comparative advantages for the banks, there are still fears of some uncertainties. Focusing on literature on outsourcing and authors own perspective from the banking sector in Ghana, this paper present the key risks likely to come with outsourcing and what future directions ought to be if such risk are to be reduced to its barest minimum. The paper presents a theoretical framework for outsourcing, a platform for further research on outsourcing and for improvement of knowledge.