Abstract:

IT outsourcing business tends to be the domain of large companies. However, with increased saturation of outsourcing market among large companies, the under exploited SME market emerges as a potentially lucrative playground for vendors. SMEs, confined by limited resources, can benefit from having external services. A review of the literature shows that there is a lack of outsourcing research among SMEs in Malaysia. Thus, this paper aims to explore and examine IT outsourcing decisions and practices of Malaysia SMEs. Data was collected from five SMEs in the manufacturing and service sectors. The research findings are valuable to SMEs and vendors. To SMEs, understanding outsourcing arrangements of other firms with similar size gives them the opportunity to compare and contrast their practices against others, and potentially learn from good practices. To vendors, understanding of Outsourcing practices among SMEs can help them to better formulate their future marketing and service strategies in an effort to attract new clients as well as retain existing clients.