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California Management Review
California Management Review is a premier academic management journal published at UC Berkeley
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Article Information
Today’s Solution and Tomorrow’s Problem: The Business Process Outsourcing Risk Management Puzzle
Shi, Yuwei
49
/
3
(
Spring
2007
):
27
-
44
Despite the boom in IT-enabled business process outsourcing (BPO), clients and vendors alike are struggling to grasp the impact of their relationship and the significance of the transfer of organizational assets between them. The limited attention to BPO risks is not surprising since over 90% of the outsourcing projects still handle IT infrastructure or business processes for what most companies regard as non-core activities, such as payroll, transaction processing, and billing. This article provides an overview of the different types of risks that a BPO client is faced with, including the damaging impact to client companies in areas such as customer services, overall operations costs, information security, business continuity, and other short-term market performance metrics. In an attempt to address this issue, this article introduces a mechanism by which BPO clients and vendors can work together to solve outsourcing project management problems and manage the organizational and market performance risks.
