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Data Envelopment Analysis for Measuring and Evaluating Efficiency on IT Outsourcing Operations

Data Envelopment Analysis for Measuring and Evaluating Efficiency on IT Outsourcing Operations
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Author(s): João Correia dos Santos (Instituto Superior Técnico, Portugal)and Miguel Mira da Silva (Instituto Superior Técnico, Portugal)
Copyright: 2017
Pages: 33
Source title: Enterprise Information Systems and the Digitalization of Business Functions
Source Author(s)/Editor(s): Madjid Tavana (La Salle University, USA)
DOI: 10.4018/978-1-5225-2382-6.ch015

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Abstract

During the last decades, the IT service sector has been one of the fastest growing segment in the global economy, consequently, Information Technology (IT) outsourcing providers face several challenges: contracts are based on a multi-service configuration; high degree of variance between clients; market dynamism through rivalry, accelerated innovation, client requisites and relationship management. As a result, service providers employ several tools and methods to find the best fit between standardization (mainly for productivity increase) and customization (primarily for client satisfaction), because IT outsourcing operational context display a multi-input and multi-output set of variables that need to be known and managed, thus efficiency measurement is essential to delivery optimised IT operations. The purpose of this work is to identify, describe, evaluate and present a model based on Data Envelopment Analysis (DEA), which is a linear programming technique able to manipulate multiple inputs and outputs. DEA allows the identification of the most efficient operation that enables providers to set the best operational strategy to follow. To develop our research, design science research was applied, and eighteen contracts were used to evaluate our model's utility the results show the importance of quantitative measures in a dynamic business environment like IT outsourcing. This work is a major contribution for measuring efficiency in IT outsourcing operations.

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