Using a hybrid multi-criteria decision aid method for information systems outsourcing

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 six factors, including economics, resource, strategy, risk, management and quality, should be considered for outsourcing decisions, and proposes the use of analytic hierarchy process (AHP) and preference ranking organization method for enrichment evaluations (PROMETHEE) 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 PROMETHEE method is used for final ranking, together with changing weights for a sensitivity analysis. It shows by means of an application that the hybrid method is very well suited as a decision-making tool for the IS outsourcing decision. Finally, potential issues for future research are presented. (c) 2006 Elsevier Ltd. All rights reserved.