The effect of strategic recognition and risks of IT outsourcing on the degree of outsourcing

Recently, IT outsourcing has become a very important management strategy which implements information systems in organizations. This paper investigates the risks and strategic recognition as key factors affecting the degree of IT outsourcing. Specifically the risks of IT outsourcing and its four components – risk of control, risk of economical, risk of technical, risk of relational – are examined to be a negative effect on the degree of outsourcing. And strategic recognition about outsourcing is examined how to affect on the risks and the degree of IT outsourcing. To empirically test these relationships, data are gathered from senior IT managers in 86 corporations. Results of this study show that the degree of outsourcing is strongly influenced by risk of control, risk of economical, risk of relational. But risk of technical does not influence on the degree of outsourcing. And strategic recognition about outsourcing is found that is negative effect on the risks of IT outsourcing and positive effect on the degree of IT outsourcing and positive effect on the degree of IT outsourcing. The results provide a good framework to minimize the risks for IT outsourcing success.