Vendor selection strategy for IT outsourcing: the weighted‐criteria evaluation technique

Vendor selection strategy for IT outsourcing: the weighted‐criteria evaluation technique Purpose – Most firms select their information technology outsourcing (ITO) vendors based on the two methods of the weighted‐criteria evaluation technique – the “qualification score plus the lowest bid price for the highest price score (QS‐LBHPS)” and the “qualification score plus the average bid price for the middle price score (QS‐ABMPS).” This paper aims to understand whether these two methods provide the same or different results of vendor selection and how the proportional weights of a vendor's qualification and bid price affect the vendor selection results under the two methods. Design/methodology/approach –In total, 1,000 experimental tests were carried out using the developed spreadsheet template to examine vendor selection results of the two methods (QS‐LBHPS and QS‐ABMPS) and compare the vendor selection results under three conditions of vendors’ qualification and price weights. A correspondence analysis was also used to determine the proximal relationships among the selection results of the weighted criteria technique under the comparable methods. Findings – The results indicate that, when using the two methods of the weighted criteria technique for a vendor selection, the selection results are significantly correspondent. In addition, the proportions of qualification and price weights affect the selection results under the two methods. The different proportions of qualification and price weights under the two methods yield the same selection results rather than different results. Originality/value – This study fills the gap in ITO literatures concerning the vendor selection strategy. No empirical studies have been undertaken to compare the results of vendor selection under the two methods of the weighted‐criteria evaluation technique. The findings enable a firm's selection team to apply the weighted‐criteria evaluation technique effectively and realize that vendor selection results are altered based on the predefined proportions of qualification and price weights. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Enterprise Information Management Emerald Publishing

Vendor selection strategy for IT outsourcing: the weighted‐criteria evaluation technique

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Publisher
Emerald Publishing
Copyright
Copyright © 2014 Emerald Group Publishing Limited. All rights reserved.
ISSN
1741-0398
DOI
10.1108/JEIM-04-2012-0015
Publisher site
See Article on Publisher Site

Abstract

Purpose – Most firms select their information technology outsourcing (ITO) vendors based on the two methods of the weighted‐criteria evaluation technique – the “qualification score plus the lowest bid price for the highest price score (QS‐LBHPS)” and the “qualification score plus the average bid price for the middle price score (QS‐ABMPS).” This paper aims to understand whether these two methods provide the same or different results of vendor selection and how the proportional weights of a vendor's qualification and bid price affect the vendor selection results under the two methods. Design/methodology/approach –In total, 1,000 experimental tests were carried out using the developed spreadsheet template to examine vendor selection results of the two methods (QS‐LBHPS and QS‐ABMPS) and compare the vendor selection results under three conditions of vendors’ qualification and price weights. A correspondence analysis was also used to determine the proximal relationships among the selection results of the weighted criteria technique under the comparable methods. Findings – The results indicate that, when using the two methods of the weighted criteria technique for a vendor selection, the selection results are significantly correspondent. In addition, the proportions of qualification and price weights affect the selection results under the two methods. The different proportions of qualification and price weights under the two methods yield the same selection results rather than different results. Originality/value – This study fills the gap in ITO literatures concerning the vendor selection strategy. No empirical studies have been undertaken to compare the results of vendor selection under the two methods of the weighted‐criteria evaluation technique. The findings enable a firm's selection team to apply the weighted‐criteria evaluation technique effectively and realize that vendor selection results are altered based on the predefined proportions of qualification and price weights.

Journal

Journal of Enterprise Information ManagementEmerald Publishing

Published: Feb 4, 2014

Keywords: IT outsourcing; Outsourcing vendor; Price assessment; Qualification assessment; Vendor selection; Weighted criteria

References

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