The influence of outsourcing the core deliverables on the business performance at Eskom Distribution South Africa

Abstract

The execution of maintenance and repairs are the core business deliverables of the Power Plant Maintenance (PPM) department at Eskom Distribution South Africa (SA). However, external service providers are employed to similarly execute these deliverables. Given this background, this study aimed to determine the influence of outsourcing core deliverables on the performance of the PPM department at Eskom SA. This quantitative study sought to determine the prevalence of any statistically significant differences in the degree of respondents’ responses regarding outsourcing the core business deliverables of their respective PPM departments in terms of profile factors such as gender, marital status, age, education qualification, designation and length of service. The study was carried out in eight out of nine PPM departments. A total of 135 responses were attained from a possible 152 participants, providing a response rate of 89 percent.

The study was successful in the achievement of all the objectives. The results of the chi-square and regression tests revealed the presence of significant factors contributing to the outsourcing of core business deliverables, accomplishing the first objective. The results of the chi-square and correlation tests revealed that outsourcing did effect business performance, though this was not generally an enhancing effect, accomplishing the second objective. Results of the chi-square tests also highlighted significant effects on the motivation of internal employees when the repairs and maintenance of the power plant equipment are outsourced, accomplishing the third objective.

The results of the correlation and chi-square also highlighted the effect of managing the core business deliverables on the business performance, the motivation of internal employees, as well as the alleviation of significant risks resulting from outsourcing core deliverables. The coefficient of determination (R-squared) revealed only 33 percent of the variations in the dependent variable that were explained by the independent variables. Finally, there was an indication of statistically acceptable reliability for the variables of the study.