Risk Management of Contract Portfolios in IT Services: The Profit-at-Risk Approach

• 成果类型: Article
• 署名作者: Kauffman, Robert J.; Sougstad, Ryan
• 署名单位: Arizona State University; Arizona State University-Tempe; New York University; University of Minnesota System; University of Minnesota Twin Cities; University of Rochester; University of Minnesota System; University of Minnesota Twin Cities; International Business Machines (IBM); IBM USA
• 刊物名称: JOURNAL OF MANAGEMENT INFORMATION SYSTEMS
• ISSN/ISSBN: 0742-1222
• DOI: 10.2753/MIS0742-1222250102
• 发表日期: 2008
• 页码: 17-48
• 关键词: information-technology; Real options; INVESTMENT; selection; policies; systems; utility; GOODS

摘要

Information technology (IT) services providers are exposed to exogenous risks faced by the industry as a whole, and endogenous risks from their Current portfolio of IT contracts. This exposure may lead to cost overruns or legal responsibility for service-level breeches. Providers can leverage information about their risk positions implied by their IT services contract portfolios to gain strategic advantage over their competitors. We build theory in support of a new construct, profit-at-risk, for evaluating the trade-offs between contract profitability and service-level risk, stemming from financial economics theory and models. We simulate an IT services contract portfolio, and show how managers can reduce organizational risk by forgoing profit-maximizing contracts in lieu of more conservative service-level agreements, yet still achieve high returns. Our approach provides decision support for ex ante contract evaluation and negotiation, and a means to conduct ex post efficiency evaluation. It also aligns IT service management with best practices in financial management.