Information systems outsourcing reasons and risks: a new assessment

Abstract

Purpose-Outsourcing is currently going through a stage of unstoppable growth. This paper makes a proposal about the main reasons which may lead firms to adopt Outsourcing in Information Systems services. It will equally analyse the potential risks that IS clients are likely to face. An additional objective is to assess these reasons and risks in the case of large Spanish firms, while simultaneously examining their evolution over time. This study of outsourcing reasons and risks has been carried out from the client's perspective.Desing/methodology/approach-In order to achieve these aims, a questionnaire was administered to the IS managers of the largest Spanish firms.Findings-Outsourcing gives the organisations the opportunity to have better IS services and the possibility to achieve technological improvements and, although cost savings in staff and technology are generally seen as very important, they do not emerge as priority reasons for outsourcing in the present study. Regarding risks, they are mainly associated with providers, with great concern being expressed about the lack of qualification among their providers' staff, the potential lack of compliance with contracts, and the inability to adapt to the New Technologies.Originality/Value-An important contribution made by this study is not only the specification of those reasons and risks but also the fact that they are considered important by the firms interviewed.

Information systems outsourcing satisfaction: some explanatory factors

“…Therefore, without actually recommending total outsourcing, it cannot be denied that a high degree of outsourcing in IS functions is not at all undesirable but even beneficial to their clients. Perhaps, the maturity of contracts together with the experience accumulated by providers and clients has made this practice previously regarded as risky (Gonzalez, Gasco & Llopis, 2010a) become increasingly controlled, allowing it to gain more and more supporters.…”

“…The literature review performed by Gonzalez, Gasco and Llopis (2010a) The aforelisted reasons were already verified in previous empirical studies which made it possible to reduce and summarise the benefits perceived through outsourcing into three groups: economic; technological; and strategic (Saunders, Gebelt & Hu, 1997;Rustagi, King & Kirsch, 2008;Han, Lee and Seo, 2008;Kim and Chung, 2003;Grover, Cheon and Teng, 1996) (see ANNEX).…”

Guidelines on security and privacy in public cloud computing

“…Outsourced computing services can, over time, diminish the level of technical knowledge and expertise of the organization, since management and staff no longer need to deal regularly with technical issues at a detailed level [Gon09].…”

Managing Security and Compliance Risks of Outsourced IT Projects

“…However, it is an option which must be managed properly as it brings risk, such as to security, contract violations, and the loss of technology skills for the organization [6], [8], [9]. Failure to manage these risks could lead to major issues not only in a particular project, but also for the entire organization or business [10].…”

“…Outsourcing is an attractive option for organizations, offering benefits including cost reduction and the opportunity to concentrate on core business activities [5], [6], [7]. However, it is an option which must be managed properly as it brings risk, such as to security, contract violations, and the loss of technology skills for the organization [6], [8], [9].…”