ITO Risks Preliminary Analysis Model of IT Outsourcing Corporations in China

Abstract

With the development of the computer technology and international specialization, a growing number of companies consider outsourcing as an effective method to improve the operation environment, reduce the cost, and enhance the efficiency. Despite of the many advantages comes with it, the risk in the outsourcing process should not be overlooked-for instance, the risk of invisible transactional cost escalation and unsatisfactory services from incompetent outsourcing suppliers. In this paper we propose a risk analysis model, which is based on factor analysis, for the ITO's in China. This model is also proven to be feasible and practical through an empirical analysis.