Risk Management Determinants in Vendor Selection of IT Tender Evaluation Process

This study reports on the determinants of Information Technology tender activity focusing on vendor selection process. The evaluation process in the selection of vendors is crucial because this is the phase where risks occur frequently. A survey is conducted among government agencies, government-linked companies and private sectors which are involved in IT procurement. Sixty percent of the population responded. A factor analysis is performed and four risk categories are extracted with a total of 11 determinants identified. The four categories of risks are vendor financial stability, hazards, operation and strategic. Determinants for vendor financial stability include pricing and the determinants for operation are performance, and deliverable. Meanwhile, reporting, customer demand, business enabler and supply chain are the determinants for strategic and agreement, security and support are the determinants for hazard. This study contributes towards new knowledge by proposing a risk management model for vendor selection in IT Tender Evaluation process.