Information Technology Outsourcing is embraced by Malaysian government and the world for the objectives of becoming information developed societies. Therefore, it is important to investigate the challenges faced by IT outsourcing companies (MDEC & MSC, 2011). The aim of this research is to investigate the challenges faced in IT outsourcing. This study is empirical, and it applied quantitative research method. Data were collected from 107 respondents using questionnaire. The IT managers or employees with good knowledge in IT outsourcing were the respondents. Data were analyzed using descriptive statistics. The findings show that lack of highly skilled IT employee, lack of experience in outsourcing relationship, security issue, unspecified cost in the outsourcing contract, low management capacity, inadequate resource for human and technological change and ethnic difference are the IT outsourcing challenges faced by MSC IT outsourcing companies in Selangor of Malaysia.
