Information systems outsourcing decisions using a group decision-making approach

Abstract

Outsourcing refers to a company that contracts with another company to provide services that might otherwise be performed by in-house employees. Information system (IS) outsourcing policies define the criteria that organizations utilize to decide upon the scope and degree of reliance of their IS capabilities upon external sources. IS outsourcing is an innovative organizational tool for IS management in both private and public sector organizations. In this paper, an interactive group decision-making methodology is proposed to select/rank IS providers under multiple criteria. A measure for the consensus level of the group preferences is developed to satisfy an acceptable level of group agreement and reliability. The Spearman coefficients for both the aggregated rank order and each DM's rank order have also been calculated. The group and the individual evaluations are gathered through a fuzzy TOPSIS approach. The proposed methodology is applied in the largest office furniture manufacturer in Konya-Turkey. Eight alternative IS providers are evaluated based on seven criteria by five decision makers. Sensitivity analyses are also provided to see the effects of parameter changes on the final decision.