Challenges of Information TechnologyOutsourcing in Developing Countries - An ExploratoryInterpretive Case Study in Malaysia Suppliers' Perspective

Information technology outsourcing (ITO) practices in developing countries have come
with numerous problems ranging from organisational setup, absence of mutual trust
between IT suppliers and clients, inconsistent policies and lack of deployable ITO model.
Malaysia is not an exception in these problems. Therefore, this research took an in-depth
look into various challenges facing Malaysia's ITO industry especially from suppliers'
perspective and presents a theoretical model that could be a possible solution to the
identified problems. The research looked at problems facing ITO practices in the light of;
mutual trust, government policy, cost of service and ITO model. This qualitative research
used interpretive and exploratory approach for it analysis and suggested a modified
performance and result/outcome-based pricing model based on industrial and academic
alignment of the findings. This is a multiple case studies research with five different ITbased
organisations; four IT suppliers and one government agency for IT development all
within Malaysia. MAXQDA data analysis tool and constant comparative analysis (CCA)
method were used to analyze the data. This research contributes to the IS/IT research on
ITO from qualitative research paradigm and at the same time succeeded in developing a
theoretical model for ITO success in Malaysia through four phases.