The Role of Risk and Return in Information Technology Outsourcing Decisions

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.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 55 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.