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Managing Risks in Information Systems Outsourcing: An Approach to Analyzing Outsourcing Risks and Structuring Incentive Contracts
Department of Information Systems, The Information Systems Research Institute, Virginia Commonwealth University, 1015 Floyd Avenue, Richmond, VA 23284, United States.
School of Information Technology Management, Ryerson University, Canada.
2006 (English)In: European Journal of Operational Research, ISSN 0377-2217, Vol. 174, no 1, 245-264 p.Article in journal (Refereed) Published
Abstract [en]

Information systems outsourcing is now almost standard practice for many companies. Outsourcing the information processing activities is a complex issue that entails considerable implications for the strategy of the firm. An important mechanism for managing the performance of outsourcing vendors is incentive contracts. But to develop an outsourcing contract the IS manager must quantify risks and benefits. However methods and tools for analyzing and quantifying outsourcing risks that IS managers have at their disposal are rudimentary. In this paper we offer a method and some mathematical models for analyzing risks and constructing incentive contracts for IS outsourcing. We are aware that most managers do not like to use mathematical models, consequently we have minimized the technical discussion and have illustrated how this model could be implemented using spreadsheet software for ease of use.

Place, publisher, year, edition, pages
Amsterdam: Elsevier, 2006. Vol. 174, no 1, 245-264 p.
Keyword [en]
Incentive contracts, Information systems management, Outsourcing, Risk management
National Category
Information Systems
Identifiers
URN: urn:nbn:se:hh:diva-20906DOI: 10.1016/j.ejor.2005.01.060ISI: 000239252600018Scopus ID: 2-s2.0-33845261805OAI: oai:DiVA.org:hh-20906DiVA: diva2:587149
Available from: 2013-01-14 Created: 2013-01-14 Last updated: 2013-01-15Bibliographically approved

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Ngwenyama, Ojelanki K.
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CiteExportLink to record
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