A Validation of Measures Associated with the Risk Factors in Information Technology Outsourcing

Abstract

In recent years, many firms have adopted outsourcing as a means to govern their informationtechnology (IT) operations. While outsourcing is associated with several important benefits, it also entails risk. The main purpose of this study was to validate measures of the risk factors associated with outsourcing IT operations. Insights from transaction costs theory suggest that risk factors are inherent in the transaction itself, the supplier and the client. A survey of 132 senior IT executives was conducted to assess the measures, and reliability and validity assessment was performed using PLS.

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