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Risk/Cost Valuation of Fixed Price IT Outsourcing in a Portfolio Context

Title data

Fridgen, Gilbert ; Müller, Hanna-Vera:
Risk/Cost Valuation of Fixed Price IT Outsourcing in a Portfolio Context.
2009
Event: 30th International Conference on Information Systems (ICIS) , 15.-18.12.2009 , Phoenix, USA.
(Conference item: Conference , Paper )

Official URL: Volltext

Abstract in another language

By optimizing its outsourcing strategy, a company faces the opportunity to lower the overall costs of its IT project portfolio. Without considering risk and diversification effects appropriately, companies make wrong decisions about how much of a project is reasonable to outsource. In this paper, we elaborate a model to identify a project’s optimal degree of outsourcing at a fixed price, considering both, costs and risks of software development, as well as diversification effects. We also examine optimal outsourcing degrees in an IT portfolio context. To date, it is common practice to decide on the implementation of projects first and then decide on outsourcing. We provide a model that enables companies to determine an optimal outsourcing strategy which minimizes the total risk adjusted costs of an IT project portfolio by considering the portfolio decision and the selection of outsourcing degrees simultaneously. This model is then evaluated by simulation using real-world data.

Further data

Item Type: Conference item (Paper)
Refereed: Yes
Keywords: Outsourcing, IT Sourcing Portfolio Management, Portfolio Selection, Software Development Projects, Risk/Cost Valuation, Decision Model
Institutions of the University: Faculties > Faculty of Law, Business and Economics > Department of Business Administration
Faculties > Faculty of Law, Business and Economics > Department of Business Administration > Professorship Business Informations Systems and sustainable IT management
Faculties > Faculty of Law, Business and Economics > Department of Business Administration > Professorship Business Informations Systems and sustainable IT management > Professorship Business Informations Systems and sustainable IT management- Univ.-Prof. Dr. Gilbert Fridgen
Research Institutions
Research Institutions > Affiliated Institutes
Research Institutions > Affiliated Institutes > Fraunhofer Project Group Business and Information Systems Engineering
Research Institutions > Affiliated Institutes > FIM Research Center Finance & Information Management
Faculties
Faculties > Faculty of Law, Business and Economics
Result of work at the UBT: No
DDC Subjects: 000 Computer Science, information, general works > 004 Computer science
300 Social sciences > 330 Economics
Date Deposited: 01 Apr 2015 11:24
Last Modified: 19 Dec 2018 13:09
URI: https://eref.uni-bayreuth.de/id/eprint/7860