A review of key systemic risks in outsourcing

Abstract

Risk management in outsourcing is now being considered to be a key competitiveness differentiator in an outsourcing project management's success (Hutchins and Gould 2004; Kliem 2004). Risk management of outsourcing attempts to reduce the possibility of negative outcomes on the outsourcing project, which in turn could increase the likelihood of an improvement in the end product quality; thus giving the organization a competitive advantage. This paper reviewed the relevant literature in outsourcing risk management to identify ten key risks in outsourcing. The paper shows that risks can increasingly originate from multiple sources, affect multiple agents with divergent perspectives and thus become a systemic cycle.