Risk mitigation in IT outsourcing strategy revisited: longitudinal case research at LISA

Abstract

The origins and history of a single case study of large-scale Information Technology (IT) outsourcing in the 1994–99 period is investigated in the United Kingdom Defence sector. Such deals are high risk and the paper describes types of risk and how the client organization sought to mitigate these. These risks and mitigation approaches are then analysed against a distinctive risk framework formulated for IT outsourcing. Risks emerging in terms of type and scope of outsourcing, vendor selection criteria and process, the role of the contract, retained capabilities and management processes, and partnering and relationship dimensions are then assessed against prior research findings. Two additional distinctive risks are identified from the case history arising from the public sector context and supplier long-term market strategy. A contribution of the paper is the revised risk framework for analysing IT outsourcing that is then presented. Finally, the implications of these findings for future research and practice are highlighted.