A MCDM approach for sourcing strategy mix decision in IT projects

Abstract

It is widely accepted that a business requires constantly evolving strategies that can not only adapt to external environmental change but also identify internal value-added activities and, even more effectively, achieve the goals of management. A sourcing decision about whether to keep IT functions in-house or contract with a third-party service provider is nevertheless entirely strategic and contingent upon organizational goals and contextual and project-specific factors. In order to adequately evaluate such sourcing decision and ensure that tasks can be assigned appropriately, this article proposes a Multi-Criteria Decision Making (MCDM) approach to achieve effective problem-solving by combining the following three methods: decision making trial and evaluation laboratory (DEMATEL), analytical network process (ANP), and zero-one goal programming (ZOGP). The final research results reveal that an organization can - simultaneously - not only take advantage of its internal or external resources to set priorities for task arrangements within the portfolio of sourcing decisions, but also optimize operating strategy and management despite limited resources after consulting with the expert panel. (C) 2009 Elsevier Ltd. All rights reserved.