Risk Identification And Control Of Service Outsourcing

Recently, with the rapid development of the economic globalization and information technology, the service outsourcing industry has experienced a remarkable booming period. Many factors drive the rapid development of service outsourcing, which include: to enhance the core competitiveness of enterprises, to improve product quality and the organizational structure of enterprise, to improve the management level and help enterprises to win a competitive advantage in the competition. Besides a huge number of advantages of outsourcing, there are still many risk factors in the procedure of outsourcing. This paper focuses on those risks happened in the progress of outsourcing, figure out a appropriate mechanism to identify, evaluate and control the risks.Based on the methodology and theory of risk management, this paper followed a clear researching route, which starts from the basic risk analysis and identification, and ended with the risk assessment and risk control. This article first introduced some related basic knowledge of service outsourcing; meanwhile, point out three kinds of risks in outsourcing based on the principal-agent theory, which includes the decision-making risk, the risk of asymmetric information and managing risk. Secondly, by taking advantage of risk matrix, this article figure a way to evaluate the risk and to rank the importance order for those risks involved in the service outsourcing. Lastly, pointing out four main measures to control the risks, which include: to establish a rational evaluation system to access the action of vender, to carry out a Multi-sourcing strategy, to construct a sound supervision, incentive mechanism and effective relationship management strategy. These strategies provide a reliable suggestion for the buyer to make a more rational decision in service outsourcing.