The Effect of Outsourcing Strategy on SMEs Performance : An Empirical Study of Internet Services Providers in Egypt

The focus of this research is to investigate the effect of outsourcing strategy on the Egyptian SMEs' performance in internet services provider sector, SMEs have the same business goals as larger organizations, but may have more limited resources. Among these goals are delivering cost savings, raising customer satisfaction, achieving high performance, extending service offerings and having access to the best people, skills and technologies. The objectives of the study are to find out the types of activities outsourced by the organizations, the reasons for outsourcing and to evaluate the effects of the outsourced activities on the organizations performance, the methodology based on quantitative analysis by using a questionnaire tools to gather required data. The result also indicates that all four hypotheses were supported by model structural equation model analyses using AMOS Ver 24. The main conclusions drawn from this study are Outsourcing Strategy has significant positive effect on SMEs Internet Services Provider (ISP) performance. the study found that the success of strategic outsourcing depended strongly on the two factors - cost driven outsourcing and focus driven outsourcing. Finally, the study found that the need to focus on core competencies was a major reason why the company chose to outsource some of its activities