Managing the Risk of IT Outsourcing
AbstractWhile it can bring several benefits, IT outsourcing entails some risks. As it is the case in other types of investments or business ventures, the risk associated to an IT outsourcing project must be evaluated and managed. This paper proposes a framework for the management of IT outsourcing risk, and assesses the usefulness of the framework using data gathered about two cases of system development outsourcing. After providing a conceptual definition of risk and of risk exposure, the paper presents the proposed risk management framework. The two cases are then described along with the evaluation of the level of risk exposure of each, and the risk management mechanisms that were included in the contracts. The results of the study suggest that by charting the various items that contribute to risk exposure, and by specifically applying the appropriate mechanisms that can target the elements with the higher levels of risk exposure, outsourcing risk can be adequately managed. L'impartition des services informatiques, même si elle peut entrainer de nombreux bénéfices, implique un risque. Comme tout type d'investissement, ce risque doit être évalué et géré. Cet article propose un cadre d'analyse pour le risque d'impartition des services informatiques, et évalue ce cadre à l'aide d'une étude de cas. Ce cas présente deux décisions d'impartition de services informatiques, dans le domaine de l'assurance. Le niveau de risque de chaque décision est évalué et les mécanismes permettant de gérer ce risque sont présentés. Les résultats montrent que, en détaillant les facteurs de risque et les événenents correspondants, il est possible de cibler les éléments les plus risqués et de réduire le risque à un niveau acceptable.
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Bibliographic InfoPaper provided by CIRANO in its series CIRANO Working Papers with number 98s-18.
Date of creation: 01 Jun 1998
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Outsourcing of IS; IS risk management; agency theory; transaction cost economics; case study; Sous-traitance des systèmes informatiques; gestion du risque des systèmes informatiques; théorie de l'agance; économie des coûts de transaction; étude de cas;
Find related papers by JEL classification:
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
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