Outsourcing of information technology services: a decision-making framework

Summary form only given. The present paper identified an important decision making problem in IT outsourcing. Firms that operate in a multi-vendor environment have been exploring twin objectives of achieving effective cost control and greater process capabilities. Vendors offer firms several viable options for project execution both at onsite and offshore with varying levels of staff involvement in each venture. An onsite project execution model with "total ownership" entrusted to a vendor, an offshore model with vendor teams working seamlessly both at onsite and offshore, and an in-house team of firm could form a set of alternatives for evaluation by a firm. The staffing of projects and engaging services of a vendor-in full or in part-would depend on a plethora of factors ranging from availability of requisite skills to business criticality of a project. The main emphasis of the paper dwells on developing a comprehensive methodology for dealing with project planning issues in IT outsourcing arena. The paper demonstrates through a case study that decisions pertaining to selecting the best mode of project execution can be quantitatively modeled and rationally analyzed-thereby achieving consensus among IT managers.