Information　systems　outsourcing　has　been　one　of　the　critical　issues　in　information　systems　management.　Various　strategies　to　IS　outsourcing　have　emerged.　Although　many　articles　have　appeared　on　outsourcing,　few　have　extended　the　discussion　beyond　simple　cost　and　benefit　analysis.　Vendor　selection　is　a　difficult　problem　which　includes　both　tangible　and　intangible　factors.　Until　now,　there　are　no　effective　quantitative　decision　models　which　can　help　outsourcer　to　choice　vendors.　In　this　paper,　an　IS　outsourcing　optimization　model　is　proposed　to　select　IS　providers,　while　considering　the　cost　and　the　risk　simultaneously.　Then　according　to　the　complicated　nonlinear　integer　programming　model,　a　modified　version　of　ant　colony　optimization　(ACO)　is　proposed　to　solve　it.　Finally,　the　computing　results　on　a　numerical　example　show　the　effectiveness　and　feasibility　of　the　model　and　algorithm.　©　2009　IEEE.