Lock-in risk in IT outsourcing projects: mechanism and mitigation system

Guodong Cong

International Journal of Project Organisation and Management, 2014, vol. 6, issue 1/2, 96-106

Abstract: There are papers studying on 'what' lock-in risk is which is the primary risk and the greatest concern in managing IT outsourcing projects. This paper provides an insight into the mechanism and the effectiveness of mitigation system on lock-in risk, namely, studies 'why' and 'how'. Based on transaction cost theory, it instructs the mechanism of what lead to lock-in risk, discusses the relationship between risk drivers such as asset specificity and lock-in risk. Accordingly, it analyses the principle of mitigation system on risk drivers. With the analysis of the two mechanisms mentioned above, the lock-in risk can be controlled both forward forecasting and backward tracing, which enhances the effectiveness and reliability of risk management.

Keywords: project management; lock-in risk; IT outsourcing; information technology; project risk management; transaction cost theory; asset specificity. (search for similar items in EconPapers)
Date: 2014
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