Identifying Areas for Risk Sharing in IT Outsourcing

Risk management is of great importance to outsourcing deals. While the traditional outsourcing focuses on risk management by one partner (typically the outsourcer), this paper proposes a risk sharing approach. Such an approach requires the identification and prioritization of risks from both the outsourcer's and the service provider's perspective to identify areas of shared interest. The analysis then continues to define mitigation actions and map them to the most important areas. This paper reports on two cases of action research undertaken in large Swiss companies and their outsourcing partners, where this approach was successfully tested.