A Decision Model for Information Systems Outsourcing: Using a Multicriteria Method

Abstract

An ever-increasing trend in today’s firms is to exploit outsourcing for those information systems (IS) functions deemed to be outside the company’s core competence. Given the multi-attribute nature of IS outsourcing decision, this paper argues that five factors, including, strategy, economics, risk, environment and quality, should be considered for IS out-sourcing decisions, and proposes the use of analytic hierarchy process (AHP) and improved ELECTREIII as aids in making IS outsourcing decisions. The AHP is used to analyze the structure of the outsourcing problem and determine weights of the criteria, and the improved ELECTREIII method is used for final ranking. It shows by means of an appli-cation that the hybrid method is very well suited as a decision-making tool for the IS outsourcing decision. Finally, po-tential issues for future research are presented.

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