Date of Publication :31st July 2023

Abstract: Artificial Intelligence (AI) refers to technologies that try to mimic various attributes of human intelligence, such as learning, understanding, problem-solving, and judgment. Therefore, AI can help businesses improve customers’ satisfaction and firms’ productivity, make smart decisions, etc. To optimize the efficient implementation of AI, firms have to consider all resources and options available. In the development and implementation of an AI technology, the first question is whether firms should outsource it to an AI vendor, or insource it. Once a firm decides that it wants to outsource the execution of an AI project, the selection of the best vendor is critical. Vendors must be evaluated and selected against some conflicting factors that may not be equally important. In this study, we first discuss how to (1) make a wise insourcing-outsourcing decision, and (2) determine the important criteria for vendors’ evaluation and selection. We then integrate the Analytic Hierarchy Process (AHP) and Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) that helps facilitate the accurate evaluation of the potential vendors. We also use numerical analysis to illustrate the accuracy and effectiveness of the proposed model.

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