Title: Assessing the risk exposure in IT outsourcing for large companies

Authors: Lazar Rusu, Georg Hodosi

Addresses: Department of Computer and Systems Sciences, Stockholm University, Isafjordsgatan 39, Forum 100, SE-16440 Kista, Sweden. ' Department of Computer and Systems Sciences, Stockholm University, Isafjordsgatan 39, Forum 100, SE-16440 Kista, Sweden

Abstract: The decision process for companies to outsource information technology (IT) or not is a substantial business change and in many cases the competence to take such decisions is limited and has major consequences for the company|s future performance. In this context, the paper is presenting the design of an information technology outsourcing (ITO) tool that includes a procedure based on transaction cost theory (TCT) for assessing the risk exposure in ITO. The ITO tool presented in this paper is a useful and effective instrument for the IT decision-makers in support of decisions to outsource IT or not. In the development of the ITO tool, we have approached two large companies in Sweden with more than 20 years experiences in ITO that helped us in the improvement and evaluation of the usability and effectiveness of this tool.

Keywords: information technology outsourcing; IT outsourcing tools; transaction cost theory; TCT; risk exposure; IT decision making; large companies; Sweden; risk assessment.

DOI: 10.1504/IJITM.2011.037760

International Journal of Information Technology and Management, 2011 Vol.10 No.1, pp.24 - 44

Published online: 27 Dec 2010 *

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