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Authors: Tarcio Bezerra 1 ; Seth Bullock 2 and Antao Moura 3

Affiliations: 1 Federal University of Campina Grande, Brazil ; 2 University of Southampton, United Kingdom ; 3 Federal Universisty of Campina Grande (UFCG), Brazil

Keyword(s): IT Outsourcing, IT Capabilities, Risk Management, System Dynamics Simulation.

Related Ontology Subjects/Areas/Topics: Decision Support Systems ; Dynamical Systems Models and Methods ; Formal Methods ; Risk Analysis ; Simulation and Modeling

Abstract: IT Outsourcing (ITO) is the practice to delegate organizational IT functions to a third party. However, this practice introduces important risks for customer organizations. We have developed a system dynamics simulation model to support ITO decision making that considers a dynamic and integrated view of capabilities management and benefits management. Two IT capabilities are modelled: Contract Monitoring (on the customer's side) and Service Delivery (on the supplier's side). In this paper the proposed model is used to assess the risks presented by a deficit in these capabilities. The results of our experiments indicate that the lack of contract monitoring capability in ITO contracting organizations directly impacts on service conclusion time and influences the cost of contract management, which is an important risk factor related to exceeding the ITO budget. It was also found that low levels of service delivery capability in the supplier most significantly impact the cost of rework a nd the number of penalties. These factors influence the profitability of the supplier and may induce it to abandon the contract prematurely. (More)

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Paper citation in several formats:
Bezerra, T., Bullock, S., Moura and A. (2014). A Simulation Model for Risk Management Support in IT Outsourcing. In Proceedings of the 4th International Conference on Simulation and Modeling Methodologies, Technologies and Applications - SIMULTECH; ISBN 978-989-758-038-3; ISSN 2184-2841, SciTePress, pages 339-351. DOI: 10.5220/0005035703390351

@conference{simultech14,
author={Tarcio Bezerra and Seth Bullock and Antao Moura},
title={A Simulation Model for Risk Management Support in IT Outsourcing},
booktitle={Proceedings of the 4th International Conference on Simulation and Modeling Methodologies, Technologies and Applications - SIMULTECH},
year={2014},
pages={339-351},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0005035703390351},
isbn={978-989-758-038-3},
issn={2184-2841},
}

TY - CONF

JO - Proceedings of the 4th International Conference on Simulation and Modeling Methodologies, Technologies and Applications - SIMULTECH
TI - A Simulation Model for Risk Management Support in IT Outsourcing
SN - 978-989-758-038-3
IS - 2184-2841
AU - Bezerra, T.
AU - Bullock, S.
AU - Moura, A.
PY - 2014
SP - 339
EP - 351
DO - 10.5220/0005035703390351
PB - SciTePress

- Science and Technology Publications, Lda.
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