A decision model for IS outsourcing

Information systems outsourcing has been one of the critical issues facing IS management recently, but it still stays in the stage of conceptual discussion about how to outsource the IS activities. The determinants used so far, for instance, transaction costs and strategic or commodities characteristics, are too narrow to help the end users determine if their system should be outsourced. This paper argues that five factors, including management, strategy, economics, technology and quality, should be considered for outsourcing decisions, Furthermore, the paper proposes a decision model, which uses the analytic hierarchy process (AHP! method to help users in structuring the outsourcing problems. The decision model generates numeric values for users to decide whether they should adopt the outsourcing strategy for each IS systems under consideration. (C) 2000 Elsevier Science Ltd. All rights reserved.