Risk
Management in I.T Outsourcing Projects in Pakistan
Muhammad Nauman Rashid
Department of Computer Science, Government
College University Faisalabad,
Pakistan
Abstract:In today's global economy, outsourcing has become a very common
phenomenon. Many large organizations have outsourced some or all of their IT
functions. Factors such as lower costs, improved productivity, improved
quality, increased customer satisfaction, time to market and ability to focus
on core areas are some of the benefits of outsourcing. However, there are many
challenges and risks associated with outsourcing. Aspects behind outsourcing
are Cost and Efficiency Savings, Develop Internal Staff, Continuity & Risk
Management, Focus On Core Activities, Reduced Overhead, Operational Control,
Staffing Flexibility the study is attributed to remove some involved risk
factors i.e., Possibility of week management, Inexperience staff, Business
uncertainty, Outdated technology, Hidden cost, Endemic certainty, Lack of
organization learning, Loose of innovative capacity, Danger of an eternal
triangle, Technology invisibility. While keeping in mind
study will evaluated all given parameters in this context both by qualitatively
and quantitatively and produce a safe standard model for multidimensional
organizations. Thesis investigates the important steps
of the decision-making and risk management outsourcing. Due to the complexity
of the decision-making process, especially in the outsourcing companies do not
achieve their expected goals. The main objective of this thesis is, therefore,
necessary to explain this type of outsourcing decision-making and risk
management steps of the main problems associated with factors to make a
decision, and she has two main exposures. As a secondary source of information,
books and from previous research on this topic in order to give a better
understanding of some of the documents used in the thesis topic. Gather
relevant empirical data, a questionnaire was sent to a number of Pakistani
companies. Report thesis, effective IT outsourcing is a decision and a clear
view of the problem, and shows the impact of the need to take him to a
decision.
Keywords:Risk Management,
Pakistan, Analysis of Decision to outsource, Selection of Service Provider,
Contract Management, On-Going Monitoring. IT Outsourcing.
Objective
of this study is to propose a frame work or model for in IT out sourcing
projects for the organizations how outsource their I.T project partially or
fully from other organizations. Risk management is a crucial part of any
project that is going to be started if you cannot manage the risk timely the
ultimately hinders the project and pave it to the failure. Risk is generally
defined as the possibility of loss or injury. Project risk management is
generally concerned with the (1) Risk Identification (2) Risk response plan(3)
Risk monitoring and control (4) Prioritization of risks (5) Risk Analysis
(Qualitative & Quantitative) [4] and proposed the knowledge management
infrastructure will help in improving the implementation of project risk
management. Project risk management is the systematic and responding to project
risks and the knowledge based framework provides the ability for the pattern
analysis and the knowledge reuse for the previous projects. The proposed
paradigm will facilitate in reducing the human involvement in project risk
management and less experienced project managers may benefit from this proposed
elucidation. The objective of risk management in I.T outsourcing for software
is to identify, address and eliminate risks before undesirable outcome occur.
It minimize the chance of project failure keeping view of different factors
such as delay of delivery the product and cost increase etc. The basic purpose
of knowledge management is to enable an organization to leverage the knowledge
and in turn improve productivity. Outsourcing is a stage background; the reader
is given an overview of the importance and outsourcing decisions. Explains all
the steps related to the theoretical part of the outsourcing decision.
Outsourcing and what problems they face by outsourcing this section also
explains why the decision. Swedish companies and outsourcing-related
information on the Pakistanis have been used for the questionnaire process. In
the early 2000s, outsourcing, researchers, scholars had great importance.
Companies that do not have internal IT technology and the whole experience can
be outsourced their IT function they also reduce costs and focus, regardless of
their core activities and are outsourcing some of their activities. Companies
are not large enough IT knowledge and experiences. Therefore, these companies
adopted outsourcing as a solution for the development and maintenance of IT
applications. The method companies in the capacity, flexibility and cost
reduction in order to achieve short and long term perspective, the outsourcing
of use. However, many companies do not benefit from outsourcing. The decision
is difficult for any organization and management of outsourced IT services. IT
outsourcing could be considered because they are not delivering the expected
value of the projects, according to a new report from research firm Gartner,
half failed. Outsourcing is a difficult decision. The most important steps to
successful outsourcing suppliers provisioning option, you need to know.
Outsourcing provides an overview of the most important steps in this thesis.
Because of the globalization of the business world it has become increasingly
competitive in recent decades. Almost all companies are not only competing with
other companies in the same region anymore, but also with companies around the
world. In addition, the customer demands to be provided with more diversified
and customized products and live time product decreases as a result of rapidly
developing technology. To respond to these changes, academics suggest companies
to determine their core competencies and concentrate on them, “top executives
were judged on their ability to restructure, deciliter, and retarder their
corporations. Depending on the type of area, there are different kinds of
possibilities to resolve this issue and one often used is outsourcing, which
will be the main topic of this thesis. It is defined as change operation of a
transaction previously governed internally to an external provider through a
long-term contract, which involves the transfer to the supplier." The main
idea behind this is to let a non-core area done by an outside vendor, who has
specialized in this. Therefore, in theory, it is carried out better the area, for
example, lower costs or with higher quality. A common example for the
outsourcing process is the transport of goods usually carried out by freight
companies " therefore, the term of outsourcing was first used in the 19s
by manufacturing executives; However, it was certainly can use the concept of
outsourcing long before. However, outsourcing did not become prominent until
the 2000s, when companies were searching for a solution to overcome a severe
resection the US economy was facing.4 Today, it is a tool often used for
businesses. In describing the advantages of outsourcing in the background
chapter, outsourcing sounds promising for each company.
In
fact, a 2001 survey, asking managers 1000, revealed that only 5% of them
believe that outsourcing has given the high profits they expected the causes of
the problems have to be determined, resulting from changes due to outsourcing.
The theory provides us with a wide variety of sources for this topic, but this
Bachelor Thesis focuses only on changes in the planning environment due to
outsourcing and the resulting effects for the planning method. The reason for
this is that only a thorough and detailed analysis of a specified area leads to
gain additional knowledge. Moreover, as there are several types of outsourcing,
it is reasonable to limit to race this project to a specific one, as the
resulting effects on the environment planning are very different, when you
outsource a single component or a whole part of the production. This thesis
will deal with the outsourcing of production of a module that is deployed on
each end product of the company. The main driver of this outsourcing is to
reduce costs. Moreover, the focus is only set in a manufacturing company,
regardless of its suppliers and its customers. Knowledge has been identified as
a vital source for innovative companies a competitive advantage and value
creation. It's like a key to the development of basic skills dynamic ingredient
and, in general, as a determinant for companies with global ambitions factor to
meet the challenges. Companies are now required to organize projects and
structures. Many of them rely on their own resources or external to fulfill
their objectives and be better prepared for the changes in their environment
resources. Moreover, companies face risks every day several types due to
changes in the global environment that could introduce new risks. The source of
risks differs from internal or external environment. Environmental uncertainty
and behaviors that influence on problems in monitoring the results of
cooperation on the level and investment risk. If this risky environment is not
properly managed, it could have a negative impact on business today and
tomorrow. For this reason, administrators need to consider the risks that can
affect and have to minimize their impact on the organization. One of the
essential functions of governance information technology (IT) is risk
management, which aims to provide a safe environment for e-commerce and IT
projects are characterized by a high degree of risk. The rapid transformation
in information technology combines changes in business processes to create
amazing changes in cost, cost-benefit ratio, and the feasibility of doing
specific things in a certain way. In support of various IT organizations,
concerned with standards they have published different methods of risk
management. These methods have been partially or fully adopted by the companies
use IT to identify, analyze, and minimize risks to their IT activities. The
risks facing IT projects are not essentially financial risks. By understanding
these fundamental problems in real terms, rather than through its financial
impact, project managers, IT can move more quickly to resolve problems before
they become major problems that jeopardize the project objectives. Most IT
professionals understand that there is different financial risk of the project
risks. risk IT projects, consists of financial resources, technology, security,
information, people, business processes, management, external, and even the
risk of success (which occurs when the project is so well done that attracts
more transactions expected and not to scale requirements overload).
Outsourcing is becoming
a trend nowadays. Pakistan also took this opportunity and embraces IT outsourcing.
As a result, Pakistan as well, India and China are the most attractive
destination for outsourcing is in place. Despite the growing number of
companies involved in outsourcing, it should be noted that outsourcing is not a
panacea. It comes with risks. Losses, uncontrolled failure can lead to
outsourcing. Although it has been adopted in other parts of the material risk
management, outsourcing risk management application is very accomplished. Risk
Management Outsourcing may interfere with the smooth flow and to prevent or
reduce the impact of losses if they occur, to foresee the risks, outsourcing
should be carried out. It should be carried out at an early stage and should be
performed regularly until the end of the outsourcing life cycle. Outsourcing
risk management process framework, as well as the outsourcing of risk
management to be carried out at each stage of the lifecycle will cover the
principle. Outsourcing computing is everywhere in the world. The rapid
development of this sector with great potential for development and the
potential for increased productivity Rapid technological change has been
accompanied by many changes in the way it looks and is managed by institutions.
Reflects the trend towards outsourcing of the group of experts believe that the
maturity of the computer world. The main outsourcing companies to focus on
their core competencies and to find out other functions seen as advantageous.
The most common processes outsourced IT outsourcing, software, system hosting
and system management are the expansion. For decades, many companies are
outsourcing their business using IT outsourcing strategy for all the servers,
software upgrades and network, etc. for a specific application, which operates
as a third party. However, the system management support, implementation, and
technology infrastructure, business development progress of banking and
insurance software development, system management, basic household systems and
hosting services have adopted the systems used by most of the information
technology outsourcing policy. Economically, it is estimated that due to the
immediate reaction to the whole or part of the security will be useful for a
company that wants to outsource. Highly tested security assessments are
performed periodically, to staff cuts, the costs of personnel to carry
throughout the year or just a section, allocate resources elsewhere. Thinking
about outsourcing, but also the information technology requirements of modern
organizations outsources functions, respectively Evolution (IT) should be
considered. The reason for that; In recent years, many companies have adopted
information technology outsourcing. Special application of information
technology outsourcing and related servers, networks and software as a third
party to manage the contractor to perform upgrades. They have all of their
information technology outsourcing, global sourcing jobs in the outsourcing
market stands out from the rest by taking almost 28% are outsourcing. Instead of performing the function of a company
is a service company that hires an IT function that occurs when the IT
outsourcing. "" It will define outsourcing "Turn It provides
services for a long time, it is a third-party provider, a company decision or
companies outsourcing IT assets, people, and / or selling operations" from
one company to another, "Information systems and information technology
services or business processes, which is to transfer outsourcing is defined as
the transfer of a function / TI is already home to a third party provider.
Outsourcing
is the definition of a student, after analyzing the various ranges of
"third-party organization IT for a specific time to make a deal when
providing services. The term “Outsourcing” is the process of shifting or
externalizing tasks and services previously performed in-house to outside
vendors (Beaumont and Sohal 2004 cited in Beaumont 2006). In its strongest form
it means, passing ownership and control of functions previously performed
in-house to an outside contractor (Beaumont and Sohal 2004 cited in
Goonetilleke 2012). “Outsource” is also
known as “external source”. It is a management approach that allows delegates
to an external agent the operational responsibility for processes or services
previously delivered by an activity. It can be defined as “the purchase of a
good or a service”. The two main actors of outsourcing processes are the
“outsourcee” and the “outsourcer”. The “customer”, outsources his/her
requirements, while the second, the enterprise, delivers outsourced services (similar
to the terms supplier or vendor) (Franceschini et al, 2003 cited in
Goonetilleke 2012, p. 13). “Outsourcing refers to the use of an external
provider of goods or services instead of having recourse to internal resources
to provide the same goods or services” (radu and Ramona, 2010, p.80).“In the IT
world, outsourcing means turning over a firm’s computer operation, network
operations, or other IT functions to a provider for a specified time” (McNurlin
and Sprague, 2006, p.8). It reflects the use of external agents to perform one
or more organizational activity (Kehal and Singh, 2006), and it is not specific
to IS. As a result, numerous definitions for the term “outsourcing” have been
stated in the past. However, outsourcing in its most basic form was conceived
as, contracting out the procuring of service or products from an outside
supplier or manufacturer rather than having them provided by in-house
facilities (Aubert et al. 2008).
Correspondingly,
precise definitions of IS outsourcing differs in the literature; traditionally
it referred to the conditions under which the organization’s data were
processed at an external computer service bureau (Fink 2004 cited in Gulla and
Gupta 2009) Now, however, it can mean much more and the current state of
outsourcing is vastly different from its traditional forms. Factor (2001), has
given a good overview between traditional (legacy) and modern IS outsourcing
paradigms. Figure 2.1 is shown
However, though there are small different aspects
considered in all the definitions, there seems to be a general agreement about
outsourcing is a process of carrying out of IT functions by third parties To
list a few of them: Information systems outsourcing, or IS outsourcing, is the
practice of turning over part or all of an organization’s IS functions to
external service providers (Grover and Cheon 2006 cited in Li and Li 2009, p.
3) “Information System (IS) Outsourcing means that the physical and/or human
resources related to one organization’s Information Technologies (ITs) are
supplied and/or administered by an external specialized provider” (Enrique et
al, 2002, p. 3). “Information system (IS) or information technology (IT)
outsourcing can be defined as the transferring of an IS/IT function that was
previously carried inhouse, to a third party provider” (Mulat, 2007, p. 24). In
addition to these definitions of outsourcing, many authors also describe
various outsourcing arrangements or options. For example, based on how many
clients and vendors are involved in the outsourcing relationship, Gallivan and
Oh (2009) identified four classes of outsourcing relationships, which is
summarized in the following table 1;
Other
authors have also categorized the variety of outsourcing contact options.
Pandey
and Bansal (2003) used the following taxonomy to capture the range of
outsourcing contact options:
(a) In-sourcing- organizations use their own IT
department to take the responsibility.
(b) Value-added outsourcing- the organizations
enter into a close and strategic alliance with the
supplier.
(c) Short-term outsourcing- the activity is
outsourced for a short period
(d) Long-term outsourcing- the activity is
outsourced to a vendor for a long period of time.
- III.MATERIALS
AND METHODS
The risks facing IT
projects are, in essence, financial risks. The financial measures are only
indicators of underlying problems. By understanding these underlying problems
in real terms, rather than through its financial impact, project managers, IT
can move more quickly to resolve problems before they become major problems
that jeopardize the project objectives. Most IT professionals understand that
there is different financial risk of the project risks. risk of IT projects is
divided into nine categories, including financial risk, technological risk,
security risk, information risk, the risk of people, the risk of business
processes, risk management, external risk, and even the risk of success (which
occurs when the project is so well done that attracts more transactions than
expected and cannot scale requirements overload . anecdotes, surveys and field
research established that many IT projects fail. managers leave some of these
systems fail. Other projects are over budget or delay ultimately result in
useful systems Such as building construction projects and states that the main
causes of failure of IT projects are the use of technologies rapidly changing,
its long development times in general and volatility user expectations about
what will produce the project. Because projects generally include all these
features, which are likely to fail, cost overruns and schedule delays
Organizations need to keep IT projects on time and costs under control.
However, organizations should also encourage managers to respond to changing
business needs and take advantage of technological opportunities before their
competitors do As for IT projects, risks may vary, if it is a software
development project, project safety, outsourcing project or task specific
programming. IT projects are known for their high failure rate. They were
carried out from in-depth interviews with IT professionals from leading
organizations in Western Australia to determine how IT risks are managed in
their projects. Respondents ranked 27 IT risks in terms of likelihood and
consequences of identifying the most important risks. The five major risks, in
order, are: lack of staff; project schedule and reasonable budget; Unrealistic
expectations; incomplete requirements; and the window of opportunity decreased
due to the delay in delivering software. Moreover, respondents mostly apply the
treatment strategy of risk reduction to manage these risks. In addition, these
strategies are primarily project management processes, rather than technical
processes. Therefore, this shows that project management is an RM strategy. In
particular, management's expectations of stakeholders are a specific risk
treatment that helps manage several key IT risks. Risk issues referring to the
software development process are not seen as essential object of discussion. On
the other hand, most organizations expect to successfully implement systems
while taking their regular business processes.
- Research
Questions and Research Objective
The
research questions in this study are:
- v What are the factors that influence organization
to outsource I.T Projects?
- v What type of risk organization faces during
outsources and what you are trying to solve?
- v What % of the work organization outsource?
- v What methodologies used by organization to
take decision to outsource I.T projects?
- v What methodologies used to manage the risks
existing solution?
- v What is the limitation of existing solutions?
The
aim of the study is to investigate project risk management as an amalgam with
the knowledge management from a very practical viewpoint with respect to the
software project industry. It also explores that to what extent the software
project based organizations are aware about knowledge management utilization,
focusing on how KM initiators foresee the implementation process and derive the
benefits about of it. The report will focus on investigation of the scope of
effective implementation of a KM approach in the project risk management.
To
be able to answer the research question, several objectives need to be
fulfilled. The objective of the study is to:
- Ø Identify the distinctive characteristics of
Software Project Management Risks processes, approaches and assisting tools and
techniques
- Ø Exploration of risk knowledge from past
projects be extracted from archives
- Ø The study will aim at providing assistance
to the user in deciding the appropriate content to
- re-use
- Ø Focusing on accommodating the evolution of
risk information and outcomes over the software project life cycle by the KM
content.
Identify
the implications and benefits of implementing a knowledge based risk management
process concurrent to the implementation of the core project management
processes.
Problem statement
Currently in the field of I.T
outsourcing, we have not found any solution focusing on the risk management
software project based organizations in Pakistan. We have found solutions from
the varying domains of the risk management and multiple knowledge areas have
been focused with respect to the knowledge domain. But our concentration will
be mainly on the aspects of KM as a complete solution for the risk management
ranging from the risk identification to the qualitative and quantitative risk
mitigation for the software project based organizations. Project risk
management is the systematic and iterative process of identifying, analyzing,
and responding to project risks and the knowledge based framework provides the
ability for the pattern analysis and the knowledge reuse for the previous
projects. The proposed paradigm will facilitate in reducing the human involvement
in project risk management and less experienced project managers may benefit
from this proposed elucidation.
The
objective of KM for project risk management is to identify, address and
eliminate risks before undesirable outcome occur. It protects intellectual
assets from decay, seeks opportunities to enhance decisions, services and
products through adding intelligence, increasing value and providing
flexibility.
- IV.RESULTS
AND DISCUSSION
The research involved ten organizations to
measure their risk management practices. The designation of the respondents are
Project Director, Principle Assistant Director, IT Manager, three System
Analysts and four IT/IS officers. From ten of the organizations, five involve
in services, three in health care, one in human resources and another one is a
law enforcer. Six organizations outsourced their application system development
functions, two organizations outsourced their ICT application maintenance, one
organization outsourced its ICT infrastructure and one organization outsourced
its strategic planning.
All
government agencies agreed that the reason they outsourced a particular
function is the resources and expertise are not available in-house.
Surprisingly, cost reduction is not the main reason to outsource a function in
government agencies. This might support the research where cost reduction is a
goal of traditional outsourcing and therefore might not be appropriate in
current environment.
Other
reasons to outsource include focusing on core business, to improve
productivity, to achieve higher quality, to achieve higher customer
satisfaction and government support. From the ten organizations surveyed, only
one organization involved the use of multi-vendor to complete the task. Six out
of ten organizations focused on selective outsourcing. Selective outsourcing is
the decision to outsource selected IT functions to service providers the rest
of the organization Factors practice in Analysis of Decision to Outsource Alpha
performed total outsourcing.
Six
of the organizations set up strategic partnership type of relationship. The
rest of the agencies set up buyer/seller relationship arrangement. All
organizations sign fee-for-service contract. Fee-for-service contract is
divided into four types, namely standards, detail, loose and mixed. From the
four types of contract, seven organizations signed detailed contract while the
rest Factors practice in Selection of Service Provider 10 0.874 Phases practice
in Contract Management 12 0.647 variables are consistent and reliable. Details
of the reliability analysis are as tabulated in Table 6. Based on the data
gathered from the questionnaire
The
questionnaire was sent to five companies in Pakistan. Two Pakistani companies
replied. Out of these 5 companies two Pakistani resorts to IT outsourcing.
However, the process of gathering information from businesses is a difficult
task because many companies have the ability to share data has proven to be a
violation of privacy.
Brief summary of
Pakistani responsive companies:
Pakistan
Petroleum Limited:
Pakistan
Petrolem Limited (PPL) is a leading Exploration and Production (E&P) Oil
Company in Pakistan. Its activities in this field dates back to the 1950s, half
a century Pakistan Petroleum Limited (PPL) at its inception in 1952, the Burma
Shell Pakistan Petroleum Limited (PPL) formed an exploration and production
company with became. Currently, all areas of the country, the company have 15
exploration licenses. Beyond the limits of its expanding their horizons by
getting involved in the oil business Pakistan has become synonymous with Gas
Company in Pakistan, namely Sui, owning the biggest gas field. PPL is a leader
in the browser and oil and gas producer in the country. Moreover, it is beyond
the country's borders to exploit oil and gas resources are intended to have a
major paradigm shift.
Mari Gas Company Limited:
Mari Gas Company
Limited (MGCL) is an Exploration and Production Company that started its
business in 1960. Currently MGCL is a leading exploration company in Pakistan.
The company's oil and gas production in the country Mari Gas Company
exploration and production company, and is actively involved in the
exploitation of natural resources Pakistan properly. MGCL the domestic sector
is one of the most important institutions. Currently, the company provides 15%
of the total production of hydrocarbons in the country.
Pakistan Petroleum Limited (PPL) IT outsourcing
Pakistan
Petroleum Limited is outsourcing IT activities for last 5 years. IT outsourcing
of software development and computer systems management is the main activities
of the PPL. The main reasons for outsourcing decisions, access to new
technologies and to focus on its core business, the company has started.
In
PPL, led by senior management in the department who are responsible for the
decision of outsourcing is part of a committee. In case of any emergency, an
outsourcing decision, to speed up the process and will be completed within a
month, it may take as long as two months. The primary criteria for selecting IT
service provider first, selective competent vendors are invited to the auction,
will be called. Once the auction is reached, and then performs the technical
and economic evaluation. The right provider can be selected on the basis of
technical capacity and financial stability.
PPL
is the main problem, which is lack of access to suppliers the ability to face,
so often carried in the cost of the project, which in turn makes it difficult
for a company making healthy competition among the vendors out there will again
be a minimum number of vendors. PPL outsourcing success rate is 75%. PPL to
reduce labor costs in the future and to help increase the efficiency of IT
outsourcing
Mari
Gas Company Limited (MGCL) IT outsourcing
Mari Gas Company Limited (MGCL) is a leading
exploration company of Pakistan. MGCL involved in outsourcing for the past
three to five years. MGCL IT test systems and IT system management outsourcing
service providers are the main activities. The main reason for outsourcing to
focus on its core business and enable the company to gain access to new
technology
Senior
management, especially the CEO's are making outsourcing decisions. Decisions
typically require two or three weeks. Mari Gas Company Limited of some IT
services outsources. Therefore, the supplier is determined according to the
nature of the problem at hand. The main problem faced by the outsourcing LQAS
from a selection of the lack of competition in the market for a job. When
required the company to provide IT services MGCL faces the problem of finding
skilled providers. The success rate is similar to PPL of MGCL. MGCL of
outsourcing success rate is at 75%.
MGCL IT outsourcing allows you to increase
capacity in the future.
Analysis of empirical data with theoretical data
The
decision of the Pakistani companies outsourcing companies obtained evidence
that exposure to different reasons. These companies, which leads to the
assumption that this is the main reason for us mentioning the decision to focus
on the core business of the company The theoretical data, the research team
Robin Sood, Lynda M. Applegate and Elizabeth Sparrow benefits, including
reducing costs as the main reason for outsourcing, said that in order to show
the economic costs of capital and the cost of labor. Elizabeth Sparrow and
Robin Sood mention focus on the core business of the company are responsible
for the researchers (Brown, Douglas, Wilson, Scott and Sparrow), the third
group, the research team has stated that the main reason for outsourcing is to
gain access to technical expertise.
There
are different types of outsourcing risks. According to the results of the data
collection experience, the main risk facing the outsourcing companies that meet
the needs of all in finding skilled providers. Provide a description of the
risks to the subject of various studies. Especially Elizabeth Sparrow (research
group 1), the most important are the risks of security and privacy. Group 2
consists of research and lack of experience in outsourcing Warren Axelrod and
stated that the major threat to the bears. Research group 3 (Annette Brannemo,
Johan Falk and Jonas Hagman) is the main threat of loss of control that must be
taken into account.
- V.CONCLUSION
AND FUTURE WORK
Future Research
The results of this study are the
specific implications for future research. After purification, the
questionnaire distributed to gather information on the risk management
practices of outsourcing. The results of this study can be used to manage the
risks to the development of the framework of IT outsourcing. In this framework
to help organizations manage projects and outsourcing reduce the risks of
outsourcing, which increases the likelihood of success.
Conclusion
The art of delegating functions to
third parties; it is becoming a trend in many organizations. Insider
participation in the project will invite more risks. These risks are likely to
affect the company as compared to the service provider. The project will be the
likelihood of success, so, companies should be able to handle the risk.
Research on the effectiveness of risk management should be to increase the
success of outsourcing. Therefore, this work examines the practices of risk
management, IT outsourcing project filled in the gap and can be used to manage
the risk of outsourcing projects to suggest a conceptual framework. A survey was conducted to validate the
conceptual framework. The survey results did not follow the stages of risk
management as companies close to the late delivery, cost overruns; the quality
is not up to the expectation and has to face many problems. Consequently, five
out of ten respondents in the cases of termination of the contract before the
completion of the project until the termination clause of the project is
completed. Close to the risk management committee and risk management practice
began with the creation of three companies, the successful completion of the
outsourcing. Risk management practices to remain low due to the lack of
knowledge and skills. However, attempts to identify a risk management practice.
From the findings, it is the most successful IT outsourcing risks can be
controlled and mitigated by the practice of risk management and as a place to
run. Therefore, in the case of outsourcing of risk management to help
organizations in managing the risks of outsourcing projects will be developed.
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