Research On Schedule And Cost Control Of IT Outsourcing Based On Negotiation Mechanism

In recent years,IT plays an important role in business processing.In this process,IT service provider has emerged.The enterprises who outsource its IT project is called client and IT service provider is called vendor.The reason why client participating in the IT outsourcing is that IT outsourcing can reduce costs,improve the efficiency and focus on core competence.IT service outsourcing brings profit for client.At the same time,it also brings a lot of risk.Schedule delay and cost overspend have led to the failure of many IT outsourcing projects and has caused wide attention in recent years.There are many factors that cause the schedule delay and cost overspend including lack of communication,unreasonable schedule and cost.The main work of this paper is to determine the reasonable schedule and cost of the IT outsourcing project.The client and vendors should make an agreement on the schedule and cost before the start of the project.However,the preference of client and vendors is different and even conflict.They need to cooperate on the project but have conflict on the detail of contract.Negotiation theory and auction theory can solve the conflict between client and vendors.First,the partner relationship between client and vendors is considered.In this situation,client doesn't need to select the vendor.Negotiation theory is applied to describe the process that client and vendors making an agreement on schedule and cost.The negotiation framework has been designed including negotiation issues,protocol,decision-making model,concession strategy and evaluation function.Meanwhile,Multi-attributes utility theory is applied to describe their different preference.Multi-attributes utility theory is also applied to establish the decision-making model and evaluation function.A negotiation case is designed to analyze the impact of maximum negotiation rounds and concession strategy on the negotiation results.Secondly,the marketing relationship between client and vendors is considered.Client has to select the optimal vendor among all vendors.The English reverse-auction theory is applied to solve this problem.Auction protocol,decision-making model,evaluation function and utility adding function are designed accordingly.Auction protocol references the auction process of English reverse-auction.The evaluation function of client takes client's preference into account.Finally,an one-to-many auction case is designed in order to analyzes the impact of different utility adding function on the auction results.