A Decision support model for the selection of information technology outsourcing service providers by small and medium enterprises in Uganda

Abstract

Information Technology Outsourcing (ITO) can help Small and Medium Enterprises (SMEs) address many of their challenges such as lack of skills and capital, poor infrastructure, and management competencies. ITO also provides benefits to SMEs such as cost savings, focus on core competence, improved operational efficiencies, and access to technology among others. Selecting the right ITO service providers is key for the SMEs to realize the benefits of ITO. Organisations including SMEs find ITO decision-making complex, lengthy, and time-consuming due to several competing factors to consider such as data privacy and security, compatibility, cost, and tribality, among others, requiring the dedication of human resources over a long period of time to make an outsourcing decision which is impractical for SMEs. The objective of this study was to develop a decision support model to guide the selection of information technology outsourcing (ITO) service providers for SMEs in Uganda. This study used the Design Science Research approach to develop a decision support model. In this model, the Technology, Organisation, Environment, User (TOEU) model was adopted to identify ITO decision factors that influence ITO service provider selection and the Analytics Network Process (ANP) model was used to facilitate the decision-making process and testing of the model. The developed model was tested and validated by using it on a scenario to select an ITO service provider in three SMEs. The model provided consistent and comparable results across all three SMEs and the research participants were satisfied with the model. The results from this study showed that the model could be used to guide the selection of ITO service providers in SMEs in Uganda. The model is meant to be generalizable to other developing countries context like that of Uganda. This study contributed to the body of knowledge by identifying new ITO decision factors namely endorsement by the government, ESG initiatives by the ITO service providers, and ability to honor contracts. It also contributed to the Multi-Criteria decision-making practice by applying the Analytic Network Process (ANP) model to the ITO decision-making in SMEs in a developing country context