Analysis Of Risk Factors For IT Outsourcing On Principal-agent Theory Perspective

After 1990s, the fierce market competition and changing market demand forced businesses to find all kinds of available resources to short delivery time, improve quality, lower costs. It resulted the "outsourcing". Because of the characteristics of information technology, IT outsourcing was the fastest growing one of many kinds outsourcing. With the strength of the Chinese enterprises themselves, Many Chinese enterprises have begun to use IT outsourcing to enhance core competitiveness. But there were many risks in IT outsourcing. This paper is aimed to study the risks existed in IT outsourcing.First, on the depth theoretical basis, the paper choice the principal-agent theory as the theoretical research perspective, and define the relationship between enterprises and outsourcing as the relationship between client and agent. Study all the process of IT outsourcing including decision, selection and management, the paper put total 13 risk factors and described and analyzed every factor. Then, design a questionnaire about these 13 risk factors and select some state-owned, private and foreign-funded enterprises in Shanghai and Jiangsu Province to collect data. Then the data was analysed by SPSS tool. The conclusions in paper as follow: There 13 risk factors are really going to increase the risk in IT outsourcing; Incomplete contract, covert acts, adverse regulatory, concealed information and inflexible contract are the main factors in all. Principal component analysis of risk factors dropped 13 factors to four-dimensional integrated risk factors. The final paper has put forward a number of measures to prevent the risk of IT outsourcing.