Title: Risk @ Outsourcing
Abstract: Risk is inherent to almost any business
decision. New product development, capital investments, and implementation
of state of the art technology are often used as examples of risky business
ventures; while they may lead to major benefits, they may also result in
important losses. Outsourcing decisions, and contractual arrangements of
the type required by an IT outsourcing deal, are another example of a risky
business endeavor. While it can lead to lower costs, economies of scale,
access to specialized resources, and new business ventures, outsourcing can
have unwanted outcomes such as escalating costs, diminishing service levels,
and loss of expertise, to name a few. This is not to say that outsourcing
is bad in itself. It only means that, as in other risky business ventures,
risk assessment and risk management are important contributors to the success
of an IT outsourcing venture. During the past couple of years, a number of
studies have been conducted on IT outsourcing in general and on IT outsourcing
risk management in particular. In this paper we try to research on the associated
risks on IT outsourcing and their risk management that we learned over the
years. The paper first defines the concepts of risk and type of risk exposures
and then various types of associated risks and the possible mitigation measures
to avoid them.
Authors: Vivek
Khurana and Peeyush Agarwal