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The Role of Risk and Return in Information Technology Outsourcing Decisions

The Role of Risk and Return in Information Technology Outsourcing Decisions This paper views information technology (IT) outsourcing decisions as classical make-or-buy decisions. In essence, these decisions consist of finding an acceptable balance between benefits and risks. The principal contribution of this paper is the development of a model that describes the relationship between outsourcing benefits and risks. It draws on work from two streams of research: transaction cost theory and modern financial theory. The model can assist managers in determining whether outsourcing or in sourcing is a better choice for a particular IT function and in evaluating and comparing competing vendor proposals. The model can also serve as a framework for future research in IT governance issues. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Information Technology SAGE

The Role of Risk and Return in Information Technology Outsourcing Decisions

Journal of Information Technology , Volume 10 (4): 9 – Dec 1, 1995

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References (39)

Publisher
SAGE
Copyright
© 1995 Association for Information Technology Trust
ISSN
0268-3962
eISSN
1466-4437
DOI
10.1177/026839629501000404
Publisher site
See Article on Publisher Site

Abstract

This paper views information technology (IT) outsourcing decisions as classical make-or-buy decisions. In essence, these decisions consist of finding an acceptable balance between benefits and risks. The principal contribution of this paper is the development of a model that describes the relationship between outsourcing benefits and risks. It draws on work from two streams of research: transaction cost theory and modern financial theory. The model can assist managers in determining whether outsourcing or in sourcing is a better choice for a particular IT function and in evaluating and comparing competing vendor proposals. The model can also serve as a framework for future research in IT governance issues.

Journal

Journal of Information TechnologySAGE

Published: Dec 1, 1995

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