Prioritization of outsourcing risks from a systemic perspective

Abstract

Purpose

The purpose of this research is so that project managers can use a systemic approach to prioritizing the risks of outsourcing including an understanding of the external factors that could affect the prioritization.

Design/methodology/approach

A survey was designed by the authors and distributed to 2,500 outsourcing professionals from different organizations and the hypotheses were tested using the data from these surveys. The logic for forming the hypothesis is discussed for each hypothesis and so are the demographics of the respondents

Findings

External factors such as the type of technology involved, type of market targeted, location of outsourcing and the amount of experience the outsourcing professional had, did affect the prioritization of the outsourcing risks. Furthermore, trends were identified among the ranking of the outsourcing risks.

Research limitations/implications

One of the constraining factors of this research, as in the majority of empirical research initiatives, was the limited sample size, which could potentially affect the rating. An increased sample size could have also provided the researchers with a more detailed insight into the interrelationships between the various outsourcing risks.

Originality/value

For the first time, the outsourcing risks have been prioritized using a systemic approach. The systemic approach has been used in the financial industry while analyzing risk but the authors have applied it to prioritization of outsourcing risks. This includes understanding the interrelationships between the risks and also the effect that external factors can have on the prioritization of those risks.

Citation

Jimmy Gandhi, S., Gorod, A. and Sauser, B. (2012), "Prioritization of outsourcing risks from a systemic perspective", Strategic Outsourcing: An International Journal, Vol. 5 No. 1, pp. 39-71. https://doi.org/10.1108/17538291211221951