How to Do Effective Risk Assessment in IT Outsourcing?
Introduction Companies are progressively using services like IT outsourcing as a part of the general capacity management plan. This has created questions about the risks related to outsourcing and the challenges and benefits it provides. IT outsourcing often increases the probability of project failure; however, statistics indicate that it is not the case. As per the PMI’s Pulse report, the main reasons for project failure are: Changes in the organization’s priorities: 41% Wrong requirements collecting: 39% Changes in project purposes: 36% However, certain risks are associated with outsourcing your work to third-party vendors. The key here is to mitigate these with effective risk management. What Is Risk Management? If you work on a project at the management level, you’ll understand the concepts of operational risks. Per the Basel II guidelines, operational risk means losses that might create from suboptimal inner procedures, failures of supporting systems, and the human factor. You need to include external events also (with regulatory risks). Operational risk management is a constant cyclic procedure that