A Novel Dynamic Algorithm for IT Outsourcing Risk Assessment Based on Transaction Cost Theory
With the great risk exposed in IT outsourcing, how to assess IT outsourcing risk becomes a critical issue. However, most of approaches to date need to further adapt to the particular complexity of IT outsourcing risk for either falling short in subjective bias, inaccuracy, or efficiency. This paper...
Saved in:
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Wiley
2015-01-01
|
| Series: | Discrete Dynamics in Nature and Society |
| Online Access: | http://dx.doi.org/10.1155/2015/325890 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1849407780649172992 |
|---|---|
| author | Guodong Cong Tinggui Chen |
| author_facet | Guodong Cong Tinggui Chen |
| author_sort | Guodong Cong |
| collection | DOAJ |
| description | With the great risk exposed in IT outsourcing, how to assess IT outsourcing risk becomes a critical issue. However, most of approaches to date need to further adapt to the particular complexity of IT outsourcing risk for either falling short in subjective bias, inaccuracy, or efficiency. This paper proposes a dynamic algorithm of risk assessment. It initially forwards extended three layers (risk factors, risks, and risk consequences) of transferring mechanism based on transaction cost theory (TCT) as the framework of risk analysis, which bridges the interconnection of components in three layers with preset transferring probability and impact. Then, it establishes an equation group between risk factors and risk consequences, which assures the “attribution” more precisely to track the specific sources that lead to certain loss. Namely, in each phase of the outsourcing lifecycle, both the likelihood and the loss of each risk factor and those of each risk are acquired through solving equation group with real data of risk consequences collected. In this “reverse” way, risk assessment becomes a responsive and interactive process with real data instead of subjective estimation, which improves the accuracy and alleviates bias in risk assessment. The numerical case proves the effectiveness of the algorithm compared with the approach forwarded by other references. |
| format | Article |
| id | doaj-art-42e959bb226d47c48b55c575960351bd |
| institution | Kabale University |
| issn | 1026-0226 1607-887X |
| language | English |
| publishDate | 2015-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Discrete Dynamics in Nature and Society |
| spelling | doaj-art-42e959bb226d47c48b55c575960351bd2025-08-20T03:35:57ZengWileyDiscrete Dynamics in Nature and Society1026-02261607-887X2015-01-01201510.1155/2015/325890325890A Novel Dynamic Algorithm for IT Outsourcing Risk Assessment Based on Transaction Cost TheoryGuodong Cong0Tinggui Chen1School of Tourism and City Administration, Zhejiang Gongshang University, Hangzhou 311018, ChinaCollege of Computer Science & Information Engineering, Zhejiang Gongshang University, Hangzhou 311018, ChinaWith the great risk exposed in IT outsourcing, how to assess IT outsourcing risk becomes a critical issue. However, most of approaches to date need to further adapt to the particular complexity of IT outsourcing risk for either falling short in subjective bias, inaccuracy, or efficiency. This paper proposes a dynamic algorithm of risk assessment. It initially forwards extended three layers (risk factors, risks, and risk consequences) of transferring mechanism based on transaction cost theory (TCT) as the framework of risk analysis, which bridges the interconnection of components in three layers with preset transferring probability and impact. Then, it establishes an equation group between risk factors and risk consequences, which assures the “attribution” more precisely to track the specific sources that lead to certain loss. Namely, in each phase of the outsourcing lifecycle, both the likelihood and the loss of each risk factor and those of each risk are acquired through solving equation group with real data of risk consequences collected. In this “reverse” way, risk assessment becomes a responsive and interactive process with real data instead of subjective estimation, which improves the accuracy and alleviates bias in risk assessment. The numerical case proves the effectiveness of the algorithm compared with the approach forwarded by other references.http://dx.doi.org/10.1155/2015/325890 |
| spellingShingle | Guodong Cong Tinggui Chen A Novel Dynamic Algorithm for IT Outsourcing Risk Assessment Based on Transaction Cost Theory Discrete Dynamics in Nature and Society |
| title | A Novel Dynamic Algorithm for IT Outsourcing Risk Assessment Based on Transaction Cost Theory |
| title_full | A Novel Dynamic Algorithm for IT Outsourcing Risk Assessment Based on Transaction Cost Theory |
| title_fullStr | A Novel Dynamic Algorithm for IT Outsourcing Risk Assessment Based on Transaction Cost Theory |
| title_full_unstemmed | A Novel Dynamic Algorithm for IT Outsourcing Risk Assessment Based on Transaction Cost Theory |
| title_short | A Novel Dynamic Algorithm for IT Outsourcing Risk Assessment Based on Transaction Cost Theory |
| title_sort | novel dynamic algorithm for it outsourcing risk assessment based on transaction cost theory |
| url | http://dx.doi.org/10.1155/2015/325890 |
| work_keys_str_mv | AT guodongcong anoveldynamicalgorithmforitoutsourcingriskassessmentbasedontransactioncosttheory AT tingguichen anoveldynamicalgorithmforitoutsourcingriskassessmentbasedontransactioncosttheory AT guodongcong noveldynamicalgorithmforitoutsourcingriskassessmentbasedontransactioncosttheory AT tingguichen noveldynamicalgorithmforitoutsourcingriskassessmentbasedontransactioncosttheory |