Towards an outsourcing decision framework for analytics projects in small and medium-sized enterprises

Small and medium-sized enterprises (SMEs) face unique challenges in leveraging data and analytics for business value. Resource constraints, skill shortages, and uncertainty often complicate the decision of whether to develop in-house capabilities or outsource analytics projects. This paper develops an initial decision framework tailored to SMEs, bridging established make-or-buy theories with the specific requirements of analytics adoption. Drawing on a literature review and 24 expert interviews, we identify key triggers and influencing factors across four dimensions: criticality, capability, cost, and compatibility. The resulting framework provides structured guidance for navigating outsourcing decisions, balancing strategic importance and data sensitivity against resource limitations, cost trade-offs, and vendor risks. For practice, the framework supports SME managers in moving beyond ad hoc decisions towards more transparent and strategic choices. For research, it contributes an empirically grounded foundation for future work on analytics sourcing and capability building in SMEs. • An initial four-stage framework guides analytics outsourcing decisions in SMEs. • Strategic importance and data sensitivity influence internal development. • Skill gaps and limited resources often lead SMEs to outsource. • Cost trade-offs drive decisions, especially for short-term projects. • Vendor fit and long-term risks shape final sourcing choices.