Industrial Management Studies

Current Issue

By Issue

By Author

By Subject

Author Index

Keyword Index

About Journal

Aims and Scope

Publication Ethics

Indexing and Abstracting

Related Links

FAQ

Peer Review Process

Journal Metrics

News

Memorandum of Understanding between the Quarterly and the Iranian Management Sciences Association

Article Writing Guide

Files

Reviewer1404

Reviewer1403

Publons

Evaluation and prioritization of service outsourcing projects based on an integrated balanced scorecard and fuzzy SWARA-ARAS approach

Document Type : Research Paper

Authors

Department of Industrial Engineering, Najafabad Branch, Islamic Azad University, Najafabad, Iran

Abstract

Nowadays, outsourcing is considered one of the most critical strategies across various industries and sectors. A proper selection of activities for outsourcing results in organizational efficiency and enhances the ability to focus on competitive advantages, while an improper choice can lead to significant challenges. In this research, a comprehensive model is proposed for ranking outsourcing options in the service sector. The model calculates the weights of evaluation criteria based on different domains and can be applied across various job sectors. Initially, 285 outsourcing decision-making criteria were identified. Using a structured questionnaire and the Lawshe method, these criteria were reduced to 25 key indicators, and their content validity was confirmed. Subsequently, the finalized criteria were categorized into the four perspectives of the Balanced Scorecard (BSC) using a fuzzy questionnaire. The criteria were then weighted using the Fuzzy SWARA method, and finally, the outsourcing alternatives in the case study, Amir al-Momenin Hospital, were ranked using the fuzzy ARAS method. The results showed that restaurant, pharmacy, IT and technical support, and finance and accounting activities are prioritized for outsourcing with a desirability of 96%, 82%, 63%, and 36%, respectively. By providing a scientific and flexible approach, this model helps decision-makers in the service sector to make effective decisions for outsourcing by considering comprehensive indicators and appropriate weighting, thereby improving organizational productivity.
Introduction
Outsourcing has become one of the most effective strategic tools for improving organizational efficiency and focusing on core competencies. In service-based organizations—particularly in healthcare—determining which activities to outsource is a critical decision that directly affects cost, performance, and service quality. Incorrect outsourcing decisions may lead to inefficiency, increased expenses, and service deterioration. Despite its importance, many organizations lack a comprehensive and integrated framework that considers both financial and non-financial dimensions for evaluating outsourcing alternatives.
This study aims to develop a comprehensive and systematic model for ranking outsourcing options in the service sector. The model integrates the Balanced Scorecard (BSC) framework with fuzzy multi-criteria decision-making (MCDM) methods to provide a structured, data-driven basis for managerial decisions. The research applies this integrated model to a real case study in the Amir al-Momenin Hospital in Isfahan, Iran, where several service areas were evaluated for potential outsourcing.
Methodology
The research adopted a quantitative and descriptive-analytical approach. Initially, 285 decision criteria related to outsourcing were identified through literature review and expert interviews. Using the Lawshe method and content validity ratio (CVR), these criteria were reduced to 25 key indicators.
The validated indicators were classified according to the four perspectives of the Balanced Scorecard (BSC), financial, customer, internal processes, and growth and learning.
To determine the relative importance (weights) of each criterion, the Fuzzy Step-wise Weight Assessment Ratio Analysis (Fuzzy SWARA) technique was applied. This approach allows experts’ qualitative judgments to be expressed as fuzzy numbers, capturing uncertainty in human assessment.
After obtaining the weights, the Fuzzy Additive Ratio Assessment (Fuzzy ARAS) method was used to evaluate and rank the outsourcing alternatives. The model was implemented in Amir al-Momenin Hospital, where four key service areas were analyzed: 1- Catering and restaurant services, 2- Pharmacy services, 3-IT and technical support, and 4- Financial and administrative services.
Expert questionnaires and interviews were conducted among hospital managers and key staff familiar with operational performance and outsourcing processes.
Findings
The fuzzy SWARA analysis revealed that financial and process-related indicators carried the highest importance, reflecting the hospital’s priority for cost-effectiveness and efficiency improvement. The subsequent ranking through the Fuzzy ARAS method produced the following results:

Catering and Restaurant Services achieved the highest preference value (0.96),
Pharmacy Services ranked second (0.82),
Maintenance and Technical Support ranked third (0.63),
Financial and Administrative Services ranked last (0.36).
These findings indicate that outsourcing catering services would yield the most significant operational and financial benefits, while maintaining internal control over financial management is more suitable for the organization.

The results validate the proposed model’s capability to handle multiple, often conflicting criteria in a fuzzy environment, ensuring a robust and reliable decision-making process.
Discussion and Conclusion
The findings emphasize that outsourcing decisions in service fields should be made by a logical method and consider both financial and non-financial perspectives. The integration of BSC, Fuzzy SWARA, and Fuzzy ARAS provides a holistic and flexible framework that aligns strategic goals with operational realities.
This study contributes to the literature by presenting a practical decision-support model that can reduce uncertainty and subjectivity in outsourcing evaluations. In practice, hospital managers can apply this model to identify optimal outsourcing opportunities, balance efficiency and service quality, and enhance transparency in decision-making.
The proposed model can also be adapted for other service-oriented organizations. Future research may focus on extending this framework by integrating sustainability indicators, dynamic weighting mechanisms, and sensitivity analysis to strengthen the decision-making process further.

Keywords

Main Subjects

References
  1. Abdel-Basset, M., Gunasekaran, M., Mohamed, M., & Chilamkurti, N. (2019). A framework for risk assessment, management and evaluation: Economic tool for quantifying risks in supply chain. Future Generation Computer Systems, 90, 489–502. https://doi.org/https://doi.org/10.1016/j.future.2018.08.035
  2. Akhtar, M. (2023). Logistics services outsourcing decision making: a literature review and research agenda. International Journal of Production Management and Engineering, 11(1), 73–88. https://doi.org/10.4995/ijpme.2023.18441
  3. Alawadi, J. f., Abbasi, G. Y., & Al-Refaie, A. (2023). Prioritization of factors influencing outsourcing maintenance decisions in thermal power plants – A case study. Journal of Quality in Maintenance Engineering, 29(4), 863–876. https://doi.org/https://doi.org/10.1108/JQME-07-2022-0040
  4. Alrwashdeh, M., Adaileh, M. J., & Ali, H. (2022). THE IMPACT OF OUTSOURCING ON OPERATIONAL PERFORMANCE: A FIELD STUDY IN INDUSTRIAL COMPANIES IN JORDAN. Journal of Management Information & Decision Sciences, 25.
  5. Alshraideh, M., Ababneh, S., Gunay, E. E., & Al-Araidah, O. (2021). A fuzzy-TOPSIS model for maintenance outsourcing considering the quality of submitted tender documents. Eksploatacja i Niezawodność, 23(3). https://doi.org/http://dx.doi.org/10.17531/ein.2021.3.5
  6. Alyodya, H. B., Runtuk, J. K., & Ng, P. K. (2023). Implementation Of The Best-Worst Method For Supplier Selection Of Products Transportation Service In A Pharmaceutical Company. International Journal on Robotics, Automation and Sciences, 5(2), 33–42. https://doi.org/https://doi.org/10.33093/ijoras.2023.5.2.4
  7. Aragão, J. P. S., & Fontana, M. E. (2022). Outsourcing Strategies in Public Services under Budgetary Constraints: Analysing Perceptions of Public Managers. Public Organization Review, 22(1), 61–77. https://doi.org/https://doi.org/10.1007/s11115-021-00517-5
  8. Bolumole, Y. A., Frankel, R., & Naslund, D. (2007). Developing a theoretical framework for logistics outsourcing. Transportation journal, 35–54.
  9. Charles, M., & Ochieng, S. B. (2023). Strategic outsourcing and firm performance: a review of literature. International Journal of Social Science and Humanities Research (IJSSHR) ISSN 2959-7056 (o); 2959-7048 (p), 1(1), 20–29. https://doi.org/http://dx.doi.org/10.61108/ijsshr.v1i1.5
  10. Dabiri, M., Oghabi, M., Sarvari, H., Sabeti, M. S., Kashefi, H., & Chan, D. W. (2021). Assessing the post-earthquake temporary accommodation risks in Iran using fuzzy Delphi method. The Open Construction & Building Technology Journal, 15(1). https://dx.doi.org/10.2174/1874836802115010093
  11. Díaz, R. F., & Sanchez-Robles, B. (2023). Outsourcing of research and development and efficiency: a DEA non-parametric analysis of the contract research organisations industry. Economic research-Ekonomska istraživanja, 36(3). https://doi.org/https://doi.org/10.1080/1331677X.2022.2153374
  12. Dubinsky, A. J., & Loken, B. (1989). Analyzing ethical decision making in marketing. Journal of Business Research, 19(2), 83–107. https://doi.org/https://doi.org/10.1016/0148-2963(89)90001-5
  13. Edvardsson, I. R., Durst, S., & Oskarsson, G. K. (2020). Strategic outsourcing in SMEs. Journal of small business and enterprise development, 27(1), 73–84. https://doi.org/https://doi.org/10.1108/JSBED-09-2019-0322
  14. Ejechi, J. O., & Oshodin, E. A. (2019). Business Process Outsourcing Strategy on Competitive Advantage and Organizational Performance. INTERNATIONAL JOURNAL OF ACADEMIC RESEARCH IN BUSINESS AND SOCIAL SCIENCES, 9(6). https://doi.org/http://dx.doi.org/10.6007/IJARBSS/v9-i6/5987
  15. Flannery, B. L., & May, D. R. (2000). Environmental ethical decision making in the US metal-finishing industry. Academy of Management journal, 43(4), 642–662. https://doi.org/https://doi.org/10.5465/1556359
  16. García-Vega, M., & Huergo, E. (2019). The role of international and domestic R&D outsourcing for firm innovation. Journal of Economic Behavior & Organization, 157, 775–792. https://doi.org/https://doi.org/10.1016/j.jebo.2018.11.009
  17. Hanafizadeh, P., & Zareravasan, A. (2020). A systematic literature review on IT outsourcing decision and future research directions. Journal of Global Information Management (JGIM), 28(2), 160–201. https://doi.org/10.4018/JGIM.2020040108
  18. Heeks, R., & Arun, S. (2010). Social outsourcing as a development tool: The impact of outsourcing IT services to women's social enterprises in Kerala. Journal of International Development: The Journal of the Development Studies Association, 22(4), 441–454. https://doi.org/https://doi.org/10.1002/jid.1580
  19. Heinis, S., Bamford, D., Papalexi, M., & Vafadarnikjoo, A. (2022). Services procurement: A systematic literature review of practices and challenges. International Journal of Management Reviews, 24(3), 352–372. https://doi.org/https://doi.org/10.1111/ijmr.12281
  20. Hernandez, D. F., & Haddud, A. (2018). Value creation via supply chain risk management in global fashion organizations outsourcing production to China. Journal of Global Operations and Strategic Sourcing. https://doi.org/https://doi.org/10.1108/JGOSS-09-2017-0037
  21. Hoseinpour, Z., Kheirkhah, A. S., Fattahi, P., & Taghipour, M. (2020). The problem solving of bi-objective hybrid production with the possibility of production outsourcing through meta-heuristic algorithms. Management, 4(2), 1–17. https://doi.org/https://doi.org/10.31058/j.mana.2021.42001
  22. Huang, H., Liu, F., & Zhang, P. (2021). To outsource or not to outsource? Warranty service provision strategies considering competition, costs and reliability. International Journal of Production Economics, 242, 108298. https://doi.org/https://doi.org/10.1016/j.ijpe.2021.108298
  23. Ishizaka, A., Bhattacharya, A., Gunasekaran, A., Dekkers, R., & Pereira, V. (2019). Outsourcing and offshoring decision making. In: Taylor & Francis.
  24. Jaukovic Jocic, K., Jocic, G., Karabasevic, D., Popovic, G., Stanujkic, D., Zavadskas, E. K., & Thanh Nguyen, P. (2020). A novel integrated piprecia–interval-valued triangular fuzzy aras model: E-learning course selection. Symmetry, 12(6), 928. https://doi.org/https://doi.org/10.3390/sym12060928
  25. Kant, C., Higashino, T., & von Bochmann, G. (1996). Deriving protocol specifications from service specifications written in LOTOS. Distributed Computing, 10(1), 29–47. https://doi.org/https://doi.org/10.1007/s004460050022
  26. Kazancoglu, Y., Lafci, C., Berberoglu, Y., Upadhyay, A., Rocha-Lona, L., & Kumar, V. (2023). The effects of globalization on supply chain resilience: outsourcing techniques as interventionism, protectionism, and regionalization strategies. Operations Management Research, 1–18. https://doi.org/https://doi.org/10.1007/s12063-023-00429-1
  27. Khalatur, S., Kuprina, N., & Kurbatska, L. (2021). New business strategies formation of enterprises and outsourcing development as a condition for increasing competitiveness in the markets of Europe and Ukraine: comparative analysis. Baltic Journal of Economic Studies, 7(4), 203–213. https://doi.org/https://doi.org/10.30525/2256-0742/2021-7-4-203-213
  28. Khan, G. M., Khan, S. U., Khan, H. U., & Ilyas, M. (2022). Challenges and practices identification in complex outsourcing relationships: A systematic literature review. PloS one, 17(1), e0262710. https://doi.org/https://doi.org/10.1371/journal.pone.0262710
  29. Khosravizadeh, O., Maleki, A., Ahadinezhad, B., Shahsavari, S., Amerzadeh, M., & Tazekand, N. M. (2022). Developing decision model for the outsourcing of medical service delivery in the public hospitals. BMC Health Services Research, 22(1), 1–9. https://doi.org/https://doi.org/10.1186/s12913-022-07509-1
  30. Kim, T. J., Lee, J. H., & Hong, J. S. (2017). Supply Network Analysis of Second and Third Outsourcing Firms with E-Invoice at Automobile Parts Industry: Focused to Brake Manufacturing Firms. Journal of Society for e-Business Studies, 21(3).
  31. Kocev, D. (2021). Outsourcing strategy: outsourcing the finance and accounting function by smes. International Journal of Economics, Management and Tourism, 1(1), 52–61. https://doi.org/https://doi.org/10.46763/IJEMT2111052k
  32. Kocot, D., & Kocot, M. (2023). OUTSOURCING IT IN THE CONDITIONS OF MARKET GLOBALIZATION. Globalization, 2, 32.
  33. Koval, V., Olczak, P., Hakova, M., Bilyi, M., Kretov, D., & Laktionova, O. (2023). Analysis of financial outsourcing management in regional environmental systems. Sustainability, 15(15), 11966. https://doi.org/https://doi.org/10.3390/su151511966
  34. KUZMENKO, V., KOROTKYKH, A., VAITSEKHOVSKA, O., KOSTENKO, V., & KUTSOVOL, K. (2023). Topicality of outsourcing as one of prospective employment forms. Revista Jurídica Portucalense, 295–320.
  35. Lastrucci, V., Romolini, A., Giusti, M., & Persiani, N. (2023). The impact of outsourcing operating theatre support services on hospital performances: the case of the largest university hospital of the Albania. Economic research-Ekonomska istraživanja, 36(1), 2199–2214. https://doi.org/https://doi.org/10.1080/1331677X.2022.2097102
  36. Lo, H.-W., Wang, L.-Y., Weng, A. K.-W., & Lin, S.-W. (2024). Assessing Supplier Disruption Risks Using a Modified Pythagorean Fuzzy SWARA–TOPSIS Approach. Journal of Soft Computing and Decision Analytics, 2(1), 169–187. https://doi.org/https://doi.org/10.31181/jscda21202440
  37. Lou, Y., Feng, L., He, S., He, Z., & Zhao, X. (2020). Logistics service outsourcing choices in a retailer-led supply chain. Transportation Research Part E: Logistics and Transportation Review, 141, 101944.
  38. Lu, F., Yan, T., Bi, H., Feng, M., Wang, S., & Huang, M. (2022). A bilevel whale optimization algorithm for risk management scheduling of information technology projects considering outsourcing. Knowledge-Based Systems, 235, 107600. https://doi.org/https://doi.org/10.1016/j.knosys.2021.107600
  39. Marrone, M., Gacenga, F., Cater-Steel, A., & Kolbe, L. (2014). IT service management: A cross-national study of ITIL adoption. Communications of the association for information systems, 34(1), 49. https://doi.org/https://doi.org/10.17705/1CAIS.03449
  40. Masharipov, M., Umirzakov, D., Ozodboeva, Z., Bekmurodov, S., & Asatullayeva, N. (2023). PROMOTING OUTSOURCING SERVICES IN HIGHER EDUCATION. Interpretation and researches, 1(12).
  41. Matytsin, D. E., Dzedik, V. A., Markeeva, G. A., & Boldyreva, S. B. (2023). “Smart” outsourcing in support of the humanization of entrepreneurship in the artificial intelligence economy. Humanities and Social Sciences Communications, 10(1), 1–8. https://doi.org/https://doi.org/10.1057/s41599-023-01524-1
  42. Mavi, R. K., Goh, M., & Zarbakhshnia, N. (2017). Sustainable third-party reverse logistic provider selection with fuzzy SWARA and fuzzy MOORA in plastic industry. The International Journal of Advanced Manufacturing Technology, 91, 2401–2418. https://doi.org/https://doi.org/10.1007/s00170-016-9880-x
  43. merriam webster site-outsourcing definition.
  44. Modak, M., Ghosh, K. K., & Pathak, K. (2019). A BSC-ANP approach to organizational outsourcing decision support-A case study. Journal of Business Research, 103, 432–447. https://doi.org/https://doi.org/10.1016/j.jbusres.2018.01.040
  45. Mtsweni, P., Mokwena, S. N., & Moeti, M. N. (2021). The impact of outsourcing information technology services on business operations. South African Journal of Information Management, 23(1), 1–7. https://doi.org/https://doi.org/10.4102/sajim.v23i1.1361
  46. Ngoc, P. T. B., Tien, P. T. H., Long, P. D., & Vu, H. Q. (2023). Total factor productivity and outsourcing: the case of Vietnamese small and medium sized enterprises. Fulbright Review of Economics and Policy, 3(2), 138–150. https://doi.org/https://doi.org/10.1108/FREP-04-2023-0015
  47. Osagie, O. E., Emeka, O. F., & Beatrice, E. (2023). Outsourcing benefits and complications. BW Academic Journal, 9–9.
  48. Rahman, H. U., Raza, M., Afsar, P., & Khan, H. U. (2021). Empirical Investigation of Influencing Factors Regarding Offshore Outsourcing Decision of Application Maintenance. IEEE Access, 9, 58589–58608. https://doi.org/https://doi.org/10.1109/ACCESS.2021.3073315
  49. Reyna, V. F. (2008). A theory of medical decision making and health: fuzzy trace theory. Medical decision making, 28(6), 850–865. https://doi.org/https://doi.org/10.1177/0272989X08327066
  50. Skipworth, H., Delbufalo, E., & Mena, C. (2020). Logistics and procurement outsourcing in the healthcare sector: a comparative analysis. European Management Journal. https://doi.org/https://doi.org/10.1016/j.emj.2020.04.002
  51. Sloniec, J. (2023). Risk Factors Determining the Benefits of It Outsourcing–a Structural Model. https://doi.org/https://www.preprints.org/manuscript/202311.0736
  52. Sternberg, H., Mathauer, M., & Hofmann, E. (2023). Technology management in multi‐tier chains: A case study of agency in logistics service outsourcing. Journal of Operations Management, 69(4), 536–557. https://doi.org/https://doi.org/10.1002/joom.1219
  53. Tang, C.-H. (2020). Optimization for transportation outsourcing problems. Computers & Industrial Engineering, 139, 106213. https://doi.org/https://doi.org/10.1016/j.cie.2019.106213
  54. Tannor, O., Dordaa, F., & Akparep, J. Y. (2023). Agency problems in facility management (FM) outsourcing in the Ghanaian retail sector. Journal of Corporate Real Estate, ahead-of-print(ahead-of-print). https://doi.org/https://doi.org/10.1108/JCRE-12-2022-0041
  55. Testik, O. M., & Unlu, E. T. (2023). Fuzzy FMEA in risk assessment for test and calibration laboratories. Quality and Reliability Engineering International, 39(2), 575–589. https://doi.org/https://doi.org/10.1002/qre.3198
  56. Wang, X., Lee, H., Park, K., & Lee, G. (2024). The strategic role of R&D outsourcing practices and partners in the relationship between product modularization and new product development efficiency. Journal of Manufacturing Technology Management, 35(1), 185–202. https://doi.org/https://doi.org/10.1108/JMTM-03-2023-0098
  57. Wei, W., & Chen, X. (2024). Service Outsourcing and Government Fiscal Conditions: Do Market Competition, Bureaucrat Support, and Management Capacity Matter? The American Review of Public Administration, 02750740241232678.
  58. Williams, C., & Durst, S. (2019). Exploring the transition phase in offshore outsourcing: Decision making amidst knowledge at risk. Journal of Business Research, 103, 460–471. https://doi.org/https://doi.org/10.1016/j.jbusres.2018.01.013
  59. Yazdani, A. A., Keramati, A., Turetken, O., & Palanichamy, Y. (2023). Evaluation of cloud computing risks using an integrated fuzzy-ANP and FMEA approaches. International Journal of Applied Decision Sciences, 16(2), 131–164. https://doi.org/https://doi.org/10.1504/IJADS.2023.129477
  60. Zamani, M., Rabbani, A., Yazdani-Chamzini, A., & Turskis, Z. (2014). An integrated model for extending brand based on fuzzy ARAS and ANP methods. Journal of Business Economics and Management, 15(3), 403–423. https://doi.org/https://doi.org/10.3846/16111699.2014.923929
  61. Zarbakhshnia, N., Govindan, K., Kannan, D., & Goh, M. (2023). Outsourcing logistics operations in circular economy towards to sustainable development goals. Business Strategy and the Environment, 32(1), 134–162. https://doi.org/https://doi.org/10.1002/bse.3122
  62. Zarbakhshnia, N., Wu, Y., Govindan, K., & Soleimani, H. (2020). A novel hybrid multiple attribute decision-making approach for outsourcing sustainable reverse logistics. Journal of Cleaner Production, 242, 118461. https://doi.org/https://doi.org/10.1016/j.jclepro.2019.118461
  63. Zhang, Y., Deng, R. H., Liu, X., & Zheng, D. (2018). Blockchain based efficient and robust fair payment for outsourcing services in cloud computing. Information Sciences, 462, 262–277. https://doi.org/https://doi.org/10.1016/j.ins.2018.06.018
  64. Zhao, Q., Zuo, Y., Ai, L., & Liu, H. (2024). Integrated location and inventory planning in service parts logistics with last-mile delivery outsourcing. Computers & Industrial Engineering, 109998
Industrial Management Studies
Volume 23, Issue 79
November 2025
Pages 231-278
Files
Share
How to cite
Statistics