An Analytic Network Process Model for Selecting Vendors in Business Process Outsourcing

Business process outsourcing (BPO) has emerged as a major strategic management issue recently. Vendor selection is a very important step in BPO because it has a significant influence on the success of the outsourcing project. Although there exists some literature on BPO vendor selection, these studies merely consider the unilateral linearization relationship among criteria. In order to overcome the limitation of these extant methods, a new model based on ANP is proposed in this paper. This model not only considers comprehensive criteria for vendor selection in BPO, but also takes into account the nonlinear relationships such as feedback and interdependencies among the criteria. This study implies that ANP is a more effective methodology in dealing with complicated decision-making problems like outsourcing vendor selection.