Outsourcing & Offshoring: Some Key Factors Guiding the Academic & Research Questions. Risk Identification, Analysis & Management Research & Instructional Opportunities. Abstract.
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Risk Identification, Analysis & Management
Research & Instructional Opportunities
Academic inquiry using industrial organization theories from economics, law and strategy have developed some useful conceptual frameworks for the study of outsourcing and the design of related research streams. Provisionally, outsourcing is the sub-contracting by organizations to external component suppliers for product supply or service organizations for expertise or work that is either unavailable internally or where internal capacity is planned for elimination. Offshoring is the outsourcing of various services, including IT, to nations outside the organization's host country.
Significant research questions are raised by domestic outsourcing and these are further complicated by offshore outsourcing. This presentation examines the identification and valuation of transactions cost risks attendant to outsoruce agreement negotiations. Research issues are discussed concerning due diligence failures, service level performance metrics, dispute resolution risks, ownership and control of data and intellectual property as well as risks in maintenance of confidentiality and the protection of privacy. In practice, there are inevitable difficulties triggered by widespread ignorance of key cultural and infrastructure differences that increase the risk of these transactions.