Understanding and Mitigating Service Provider’s Risks in Offshore Information Technology Outsourcing: A Conceptual Analysis

Abstract

Existing research on risks involved in offshore IT outsourcing focus overwhelmingly on risks that client firms face while contracting out their IT operations and measures to be undertaken for mitigating those risks. This study seeks to understand what risks service providers face in such outsourcing and how to mitigate them. Despite proliferation in number of offshore outsourcing providers in the field of IT,little attention has been placed on this topic. This study fills a knowledge gap by proposing a framework of offshore IT outsourcing providers’ risks and suggesting some mitigating measures to minimize those risks. From a comprehensive examination of past literature, published cases and documents, a number of potential risks have been identified. They have been categorized as two broad groups- a. project-specific risks, and b. relationship-specific risks. A qualitative approach is applied to conceptually analyze data which offers future researchers to formulate proposition and build theory. The insights that are generated through this qualitative synthesis of the literature will be valuable to the managers in the field of offshore IT outsourcing.The framework enlighten the scholars about the significance of understanding the providers’ risks for overall outsourcing success.