An Analysis On It Outsourcing Decision Based On Incomplete Contract Theory

Along with the rapid development of Information Technology (IT) outsourcing in China, IT outsourcing will act more and more important strategic role in management and development of enterprises, and more enterprises see IT outsourcing as an important strategic measure. IT outsourcing is a sword with two blades. Though the success on IT outsourcing can benefit enterprise much, an irrational implement will bring huge risks to enterprise. Therefore, the analysis on IT outsourcing decision has important practical meaning.Firstly, related concept of IT outsourcing are outlined, such as definition, causes, characteristics, risks, theoretical foundations, developing trends and so on. We define IT outsourcing based on IT infrastructures.Secondly, based on incomplete contract theory, we put forward judging standard, basic hypotheses and three fluctuation factors of the decision model and set up the frame of IT outsourcing decision. Combining with GHM model, we establish the IT outsourcing decision model, summarize eight extreme situations and draw nine meaningful conclusions.Finally, after analyzing four different kinds of IT infrastructures, we draw some useful conclusions which can advice the enterprises'IT outsourcing decision behavior. That is IT technology resources can be outsourced, IT human resources is suitable to outsource, IT services resources can properly be outsourced in limited range and extend and IT application resources should be integrated.Of course, despite of restraint of author's academic attainments, the study still has many limitations. At the end of this essay, we list several aspects in this research expected to improve in the future.