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IT Outsourcing Risk Management at British Petroleum

Author

Listed:
  • Benoit A. Aubert
  • Michel Patry
  • Suzanne Rivard
  • Heather Smith

Abstract

This paper reports the results of a study of three successive IT outsourcing contracts at British Petroleum (BP). We offer an operational definition of IT outsourcing risk and use it to assess the risk exposure associated with each contract. We then examine how the management at BP dealt with outsourcing risk. Our results show that careful and deliberate risk management can substantially attenuate the level of risk exposure, and that IT outsourcing risks can be managed. Ce document présente les résultats d'une étude de trois contrats d'impartition successifs. L'étude fut conduite chez British Petroleum. Une définition opérationnelle du risque d'impartition est donnée. Cette définition est ensuite utilisée pour déterminer le niveau de risque associé à chacun des contrats. Les mécanismes de gestion de risque sont également identifiés. Les résultats démontrent qu'une gestion active du risque permet de réduire sensiblement les niveau d'exposition au risque, notamment dans le cas de contrats d'impartition des technologies de l'information.

Suggested Citation

  • Benoit A. Aubert & Michel Patry & Suzanne Rivard & Heather Smith, 2000. "IT Outsourcing Risk Management at British Petroleum," CIRANO Working Papers 2000s-31, CIRANO.
  • Handle: RePEc:cir:cirwor:2000s-31
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    File URL: http://www.cirano.qc.ca/files/publications/2000s-31.pdf
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    References listed on IDEAS

    as
    1. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    2. Roll, Richard, 1986. "The Hubris Hypothesis of Corporate Takeovers," The Journal of Business, University of Chicago Press, vol. 59(2), pages 197-216, April.
    3. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    4. Barzel, Yoram, 1982. "Measurement Cost and the Organization of Markets," Journal of Law and Economics, University of Chicago Press, vol. 25(1), pages 27-48, April.
    5. Benoit A. Aubert & Michel Patry & Suzanne Rivard, 1998. "Assessing the Risk of IT Outsourcing," CIRANO Working Papers 98s-16, CIRANO.
    6. Langlois, Richard N. & Robertson, Paul L., 1992. "Networks and innovation in a modular system: Lessons from the microcomputer and stereo component industries," Research Policy, Elsevier, vol. 21(4), pages 297-313, August.
    7. David E. M. Sappington, 1991. "Incentives in Principal-Agent Relationships," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 45-66, Spring.
    8. John Anderson & Ram Narasimhan, 1979. "Assessing Project Implementation Risk: A Methodological Approach," Management Science, INFORMS, vol. 25(6), pages 512-521, June.
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    Citations

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    Cited by:

    1. Michel Poitevin, 2000. "Can the theory of incentives explain decentralization?," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 878-906, November.
    2. Aylin Seckin, 2000. "Consumption with Habit Formation," CIRANO Working Papers 2000s-39, CIRANO.
    3. Aylin Seckin, 2000. "Consumption with Liquidity Constraints and Habit Formation," CIRANO Working Papers 2000s-41, CIRANO.
    4. Aylin Seckin, 2000. "Consumption-Leisure Choice with Habit Formation," CIRANO Working Papers 2000s-40, CIRANO.
    5. Claudia Keser & Bodo Vogt, 2000. "Why Do Experimental Subjects Choose an Equilibrium which Is Neither Payoff Nor Risk Dominant?," CIRANO Working Papers 2000s-34, CIRANO.
    6. Aylin Seckin, 2000. "Habit Formation with Recursive Preferences," CIRANO Working Papers 2000s-43, CIRANO.
    7. Aylin Seckin, 2000. "Consumption with Durability," CIRANO Working Papers 2000s-38, CIRANO.

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