Outsourced microfinance MIS systems : a decision guide for microfinance institutions

It identifies the key decision factors to consider, the main reasons to choose each option, pricing models for outsourced solutions, and it explores in depth two key issues for core banking systems: total cost of ownership and data security. There is an extensive list of tips and recommendations to guide MFIs in the vendor selection and evaluation process, starting with developing a request for proposal (RfP), and ending with tips for managing the vendor post-implementation. For this research, DAI interviewed two vendors of core banking solutions, one who provides solutions for the largest to the smallest financial institutions in the developed world, and another, IBM, who has just embarked on an initiative to build shared �processing hubs� for MFIs in Latin America and Africa. The interview summaries can be found in the Appendix. This Outsourcing Decision Guide is a companion document to "Microfinance Core MIS Systems -- The Business Case for Outsourcing". The Business Case document provides a summary of the business case for MFIs to outsource their core banking system, describes the research objectives, and defines terminology, so the reader should review the Business Case document before this Decision Guide. The Business Case includes three other case studies profiling the experience of three small financial institutions in the U.S.: one that outsourced from the first day in business, one that has a hybrid of in-house and outsourced systems, and one that chose to buy a package and host in-house. (Author abstract, modified)