Outsourcing has gained popularity as several large U.S. companies in the 1980 s began delegating IT work to foreign firms. In outsourcing, one party (customer) asks another party (vendor) to do a particular job. Outsourcing has its own advantages, like reducing the cost and time and increasing performance and satisfaction. This study has focused on the critical success factors in information technology outsourcing for the emerging market and has considered the perspectives of the vendor. A snowball sampling technique was used to generate quantitative data among the respondents inside Kathmandu valley and variables were drawn from the available literature. Respondents included outsourcing vendors, freelancers, consultants and policymakers. Data were properly tested for reliability using Cronbach's Alpha and results were validated using convergent and discriminant validity. The analysis included Structured Equation Modeling and Estimation was done using maximum likelihood and partial least squares. The study identified 21 critical success factors for the emerging market under seven categories: System quality, communication quality, service quality, system use, satisfaction, individual benefit and organizational benefit which is the main contribution of the paper. It is suggested that IT outsourcing vendors focus on these factors, policymakers implement new strategies to establish their presence in global outsourcing industries and researchers incorporate these variables in their future research.

Many businesses are collaborating on joint service initiatives in order to cut operational costs and compete for profits. Outsourcing is a cost-reduction strategy used to carry out tasks by service providers or vendors that are typically handled within the company. This research is focused on outsourcing strategies on vendor’s point of view, as many emerging markets continue to struggle to establish a foothold in the international market. The success of IT outsourcing is largely dependent upon the vendor's internal strength, industry-specific environmental factors, and country-specific policies. The respondents were chosen using a snowball sampling technique, and variables were selected from literature review and consulting with industry experts. The survey was conducted within the Kathmandu valley, and quantitative data were collected for the study. Respondents were outsourcing agencies, freelancers, outsourcing consultants and policy makers. The analysis included Structured Equation Modeling and identified six key strategic factors for emerging market: banking priority, growth capacity, intellectual property, country specific specialization, foreign direct investment, and the HR Structure of the vendor. It is suggested that policy makers and IT outsourcing vendors utilize these factors to further strengthen their position in the global outsourcing industry.

Outsourcing is described as the strategic use of external resources to carry out tasks that have traditionally been performed by internal staff and resources. It is considered to be the best-known phenomena of modern times and business strategy to drive the global economy.  Outsourcing offers enormous benefits to companies only if the outsourcing decision is correct and factors that affect the outsourcing decision are adequately considered, otherwise irreparable harm may be caused. A study to identify the critical success factors of IT outsourcing in Nepal from the vendor's perspective has been initiated. This study examines different models about the effectiveness of outsourcing for the reason. All these models have their own advantages and drawbacks, so a careful review is important to reach at conclusions for the organizations that wish to follow such models. This article is based on4 comprehensive literature review of the success factors for outsourcing that led to the discovery of six different outsourcing models. The study has reviewed Leavitt’s model, McKinsey 7-S framework, The Nadler-Tushman Congruence Model, Technology Acceptance Model, DeLone and McLean's IS-Success Model and IS-Impact Model. Revised DeLone and McLean Model of Information Systems Success, however, are widely debated and considered to be the most promising.

Nepal has not been able to harness its growth potential on information technology outsourcing on the borders of two of the world's largest outsourcing providers – India and China – due to prolonged political instability. The IT outsourcing industry plays a major role in driving socio-economic growth. The success of IT outsourcing is largely dependent upon the vendor's internal strength, industry-specific environmental factors, and country-specific policies. This research is focused on outsourcing strategies on vendor’s perspective, as many emerging markets continue to struggle to establish a foothold in the international market. A snowball sampling method was used to collect quantitative data among the respondents inside Kathmandu valley and respondents were outsourcing companies, freelancers, consultants, and policymakers. Variables were drawn from the the expert's input and literature review. Data were properly tested for reliability using Cronbach’s Alpha, and results were validated using convergent and discriminant validity. The analysis included descriptive analysis followed by structural equation modelling. The study identified six key strategic factors for emerging market: banking priority to IT outsourcing industry, growth capacity of the service provider, intellectual property, country specific specialization, foreign direct investment, and the HR structure of the vendor. It is suggested that policymakers of emerging nations include IT outsourcing in an economic strategy and prepare baseline framework incorporating these success factors.