Title: The risks of business process outsourcing: a two-fold assessment in the German banking industry

Authors: Heiko Gewald, Jochen Franke

Addresses: Strategy & Change Practice, IBM Deutschland GmbH Wilhelm-Fay-Straße 30–34, 65936 Frankfurt am Main, Germany. ' Johann Wolfgang Goethe University, Frankfurt, Germany

Abstract: This paper tackles the question of whether the risks inherent in Business Process Outsourcing (BPO) differ significantly from the risks of Information Technology Outsourcing (ITO), and subsequently investigates which are the most salient risks inherent in BPO. By applying structured expert interviews and a quantitative survey among Germany|s 200 largest banks, it turns out that the risk categories relevant to ITO and BPO are fundamentally the same, but differ in magnitude. Digging deeper into the risks associated with BPO, and using Perceived Risk Theory as a theoretical framework, we found that financial risks are most important to decision makers, followed by strategic and performance risks.

Keywords: outsourcing; risks; business process outsourcing; BPO; information technology outsourcing; ITO; Germany; banking; electronic finance.

DOI: 10.1504/IJEF.2007.012897

International Journal of Electronic Finance, 2007 Vol.1 No.4, pp.420 - 441

Published online: 21 Mar 2007 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article