Risk Analysis And Controlling Of IT Outsourcing Implementation

Following the arrival of the"information net works era",outsourcing has been developing much more rapidly.According to a report from the American magazine "Fortune"on July 20th 1998, worldwide companies whose income were above 50 m -illion U.S.dollars had commonly carried out operational outsourcing.Outsourcing contains many aspects, such as administrative outsourcing,client service outsourcing,financial outsourcing, human resources outsourcing, assets and factory outsourcing,sales and marketing outsourcing, logistics outsourcing delivery outsourcing, transportation outsourcing and information technology outsourcing w- hich is the most rapidly developing area in outsourcing field. It is estimated that the size of world information technology (IT) service market has already risen from 32 -70 hundred million dollars in 1997 to 6300 hundred million dollars in 2002. Ameri -can software and the IT outsourcing industry's market size was 2000 hundred milli -on dollars in 2003, the disembark part amounted to 200 hundred million dollars fo -r 10% of the total quantity, India obtained 60% of the market share.However, in many information technology outsourcing cases, many of them failed as a result of risk factor. So how to solve risk problem in the information technology outsourcing has become a urgent topic. Generally, the enterprise can make the outsourcing demand analysis correctly in the strategic stage, through the technical panel's repeated analysis, even the third party assistance. And the service provider market is developed rapidly, there are many service providers of different size the enterprises can choose, generally the enterprise can choose an appropriate provider through public bidding. Therefore, risks in the strategic stage the enterprise basic can control generally, but uncertainty of implementation stage is very big, because both sides may meet many kinds of problems resulting in outsourcing activity risks. And whether these risks can be controlled directly decids whether the outsourcing can be done triumphantly. Based on this background, this article analyzes the risk in the implementation process of IT outsourcing comprehensively, holding the"win-win"principle and draws up the corresponding regulatory measures.There are already massive literature researching the IT outsourcing risks from each angle, butthere is a universal problem, the majority of research is from a main body, the enterprise or the service provider, very few literature stood both in the enterprise and the service provider. And the IT outsourcing and the IT outsourcing service constituted the IT outsourcing activity, therefore only research from the bilateral angle, in which way we could reduce the IT outsourcing risk in the true sense.This article standing in"win-win"angle divides the sisks of IT outsourcing im -plementation process into three origins: The customer enterprise, the service provi -der, the transaction. So this article proposed controlling measures through analyzi- ng the risk factors of each origin, deriving a kind of"win-win"contract with qualit- ative analysis and quantitative analysis together, which has thefeasibility function t- o the customer enterprise and the service providers.Firstly, this article analyzed the risks of IT outsourcing implementation in overall, and from two master lines: one is a phase line, another is the risk line. Namely, dividing the implementation process into contract signing and the carrying out of the contract these two small stages, then analyzing each stage separately from three origins: the enterprise, the service provider, the transaction, and analyzing the risk factors of each origin. So this article has analyzed the risks of IT outsourcing implementation comprehensively.Next, Nash equilibrium been carried on the enterprise and service provider's sides, analyzes balanced through Nash, through which we derive that in the Nash equilibrium state, both sides adopt the strategy just for maximization payment in individual angle, thus causes non-Pareto optimum. Therefore, even if the enterprise strategy is correct, but as a result of respective rational latent, if both sides have not restriction beforehand, both sides would choose the contract strategy for their maximizational profit, which will result in the service provider's congenial behavior and the enterprise's non-satisfactory, all of these mean the fail of outsourcing. Thus proves inevitability and the important meaning of"win-win"system. Then obtains"win-win"system's necessity, then according to risk analysis of the third chapter, this article proposed the corresponding regulatory measures.Finally, with the method proposed, this article analyzed case about risks contr- olling of IT outsourcing implementation process of JingWei TextileMachinery C- o.,Ltd, YuCi branch. Firstly, analyzing the present situation, then pointing out the i- nsufficiency and the atonement method.The risk analysis and control method in IT outsourcing implementation process this article proposed has the guidance significance no matter to the enterprise or the service providers, so may be used in the practical application.