Outsourced Microfinance MIS Systems: A Decision Guide for Microfinance Institutions

The choices of banking management information systems (MIS) for a resource-constrained MFI can be confusing. Outsourcing is based on a new business and pricing model in most developing countries, making it difficult for MFIs to compare against other solutions. However, custom development can easily take six to nine months, and commercial-off-the-shelf (COTS) package software requires a large up-front investment and may not meet all the requirements. MFIs driving through this roundabout of decisions need to know which road to take.

MicroREPORT #115, a decision guide, seeks to help MFIs break through the “analysis-paralysis”. 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.