Applying Fuzzy Decision Making Approach to IT Outsourcing Supplier Selection

The decision of information technology (IT) outsourcing requires close attention to the evaluation of supplier selection process because the selection decision involves conflicting multiple criteria and is replete with complex decision making problems. Selecting the most appropriate suppliers is considered an important strategic decision that may impact the performance of outsourcing engagements. The objective of this paper is to aid decision makers to evaluate and assess possible IT outsourcing suppliers. An axiomatic design based fuzzy group decision making is adopted to evaluate supplier alternatives. Finally, a case study is given to demonstrate the potential of the methodology. Keywords—IT outsourcing, Supplier selection, Multi-criteria decision making, Axiomatic design, Fuzzy logic.

[1]  Hsu-Shih Shih,et al.  Incremental analysis for MCDM with an application to group TOPSIS , 2008, Eur. J. Oper. Res..

[2]  Francisco Herrera,et al.  Multiperson decision-making based on multiplicative preference relations , 2001, Eur. J. Oper. Res..

[3]  R. Klepper,et al.  Outsourcing information technology, systems and services , 1998 .

[4]  C. Kahraman,et al.  Multi-attribute comparison of advanced manufacturing systems using fuzzy vs. crisp axiomatic design approach , 2005 .

[5]  Irem Ozkarahan,et al.  An integrated multicriteria decision-making methodology for outsourcing management , 2007, Comput. Oper. Res..

[6]  Nick Rich,et al.  Outsourcing competitive advantage: the use of supplier associations , 1998 .

[7]  Leslie P. Willcocks,et al.  Global IT outsourcing: search for business advantage , 2001 .

[8]  David C. Chou,et al.  Information systems outsourcing life cycle and risks analysis , 2009, Comput. Stand. Interfaces.

[9]  Weijun Xia,et al.  Supplier selection with multiple criteria in volume discount environments , 2007 .

[10]  Dan Remenyi,et al.  Information Technology Outsourcing Transactions—Process, Strategies, and Contracts , 1997 .

[11]  Hyun-Soo Han,et al.  Analyzing the impact of a firm's capability on outsourcing success: A process perspective , 2008, Inf. Manag..

[12]  P. C. Wright,et al.  A practical guide to successful outsourcing , 1998 .

[13]  Ravi Shankar,et al.  Selection of logistics service provider: An analytic network process (ANP) approach , 2007 .

[14]  David L. Olson,et al.  A simulation study of IT outsourcing in the credit card business , 2006, Eur. J. Oper. Res..

[15]  Richard V. McCarthy,et al.  Knowledge management and the competitive strategy of the firm , 2006 .

[16]  Cengiz Kahraman,et al.  Fuzzy axiomatic design-based performance evaluation model for docking facilities in shipbuilding industry: The case of Turkish shipyards , 2009, Expert Syst. Appl..

[17]  Petter Gottschalk,et al.  Maturity in IT outsourcing relationships: an exploratory study of client companies , 2008, Ind. Manag. Data Syst..

[18]  N. Venkatraman.  Beyond Outsourcing: Managing IT Resources as a Value Center , 1997 .

[19]  Leslie P. Willcocks,et al.  Intelligent It Outsourcing , 2003 .

[20]  Steve Caplin,et al.  Principles Of Design , 2011 .

[21]  John N. Pearson,et al.  The impact of purchasing and supplier involvement on strategic purchasing and its impact on firm’s performance , 2002 .

[22]  Osman Kulak,et al.  A decision support system for fuzzy multi-attribute selection of material handling equipments , 2005, Expert Syst. Appl..

[23]  Gülçin Büyüközkan,et al.  Application of a hybrid intelligent decision support model in logistics outsourcing , 2007, Comput. Oper. Res..

[24]  Jahyun Goo,et al.  Facilitating relational governance through service level agreements in IT outsourcing: An application of the commitment-trust theory , 2008, Decis. Support Syst..

[25]  Bandula Jayatilaka,et al.  Information systems outsourcing: a survey and analysis of the literature , 2004, DATB.

[26]  Fong-Yuen Ding,et al.  Using data envelopment analysis to compare suppliers for supplier selection and performance improvement , 2000 .

[27]  Tien-Chin Wang,et al.  Optimizing partners’ choice in IS/IT outsourcing projects: The strategic decision of fuzzy VIKOR , 2009 .

[28]  Leslie P. Willcocks,et al.  IT outsourcing configuration: Research into defining and designing outsourcing arrangements , 2005, J. Strateg. Inf. Syst..