A Risk Management Model For Information Systems Outsourcing In Developing Countries

Information systems outsourcing is a business practice which largely dominates today’s global economy.Outsourcing is often defined as the“transfer of an organization’s business function to an external vendor”.There have been very high growth rates in this industry for more than two decades;however,there are very few studies related to information systems（IS）outsourcing in developing countries,most previous research focused mainly on developed and emerging countries.The main objective of this thesis is to study the phenomenon of IS outsourcing in developing countries in general,and in the East African Community（EAC）in particular,and to provide new insights on the practice of IS outsourcing from the developing countries’perspective.It contributes to reducing the gap between developed and developing countries in terms of IS outsourcing research.IS outsourcing has become a very important issue for strategic management.It has been labelled as one of the most powerful trends in modern management.The phenomenon of IS outsourcing is often studied at firm level;however,this thesis takes a different angle by studying the phenomenon at country level.The need for this distinction was evidenced by（Mann,Graham,&Friederici,2014）who stated that if clients are generally skeptical of a country’s sector,an individual enterprise will find it more difficult to obtain a chance at proving itself as a reliable service provider,thus the need to study IS outsourcing in developing countries at country level.There are many risks that come with IS outsourcing,such as the risks related to selecting the wrong provider,and if not properly dealt with,they can lead to outsourcing failure.This thesis proposes a PROMETHEE based risk management model adapted to the case of IS outsourcing in developing countries.The model is aimed at improving IS outsourcing provider selection based on a set of ten criteria which are appropriate for assessing the readiness of developing countries as IS outsourcing destinations.The model will help managers,practitioners,and researchers in making IS outsourcing decisions,especially for the case of developing countries.This work contributes therefore to enriching the area of model-driven decision support for information systems outsourcing.This study analyzes and compares the performances of 5 EAC countries for a period of five years,from the year 2012 to 2016,using a set of ten criteria.We begin by evaluating the countries’yearly performances,then a combined evaluation for the entire five years period is done.The results of the combined evaluation are compared with those of the yearly evaluation,and finally,a case study for the year 2014 is done to give a more detailed view of the evaluation process.The results show that throughout the five years period,Rwanda and Kenya got positive results and performed better that the remaining countries.Overall,Rwanda is the best ranked country for the entire 5 years period,and this finding contradicts with the usual expectation that Kenya is the best offshore IS outsourcing destination for East Africa.Rwanda is ranked 1^st for the years 2012 and2013 while Kenya is the best performing country for the years 2014,2015,and 2016.We conclude that Rwanda and Kenya are therefore ready to play a bigger role as offshore IS outsourcing destinations while Uganda,Tanzania and Burundi need to do more to improve their competitiveness on the IS outsourcing market.