Validating measures of information technology outsourcing risks factors

Posted by / 27-May-2020 13:38

Validating measures of information technology outsourcing risks factors

However, most of approaches to date need to further adapt to the particular complexity of IT outsourcing risk for either falling short in subjective bias, inaccuracy, or efficiency.This paper proposes a dynamic algorithm of risk assessment.Namely, in each phase of the outsourcing lifecycle, both the likelihood and the loss of each risk factor and those of each risk are acquired through solving equation group with real data of risk consequences collected.In this “reverse” way, risk assessment becomes a responsive and interactive process with real data instead of subjective estimation, which improves the accuracy and alleviates bias in risk assessment.In this way, risk assessment is no longer merely relying on assessors’ subjective estimation.Instead, it becomes a responsive and interactive process with real data, which improves the accuracy and alleviates bias of risk assessment.

The paper is organized as below: Section 3 will illustrate the framework briefly, Section 4 will explain the algorithm in detail, Section 5 will give a complete numerical case and discussion, and Section 6 will summarize the work in this paper and instruct future study perspective.The second layer is four main risks or scenarios that can be associated with outsourcing: “lock-in,” “costly contractual amendments,” and “unexpected transition and management costs,” as well as “disputes and litigation.” The third layer is risk consequence: “cost escalation” and “service debasement.” The mechanism corresponds to those identified in the literature on the IT outsourcing risk and provides a deep insight into IT outsourcing risk.However, there are some other factors worthy of consideration too.Besides the framework, the risk exposure in ITO is assessed based on TCT [16].Another paper has assessed ITO models in terms of faithfulness and concluded that the models hardly capture all the essential elements of TCT [17].

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