Insurance IT outsourcing risk assessment modeling and empirical study

IT Governance is a branch of the corporate governance system focused on information technology (IT) as well as performance and risk management. IT Governance is defined as the processes that ensure the effective and efficient use of IT in enabling an organization to achieve its goal. There are many different frameworks that can be used for managing the delivery of cost-effective IT services. IT managing the delivery of cost-effective IT services does not always give the advantage to the company. There are times when the IT managing the delivery of cost-effective IT services does not provide any benefit, it can cause IT Productivity Paradox. IT Productivity Paradox can be prevented, one is to analyze the processes undertaken with IT. From this analysis we will get the significance of the relationship processes with the IT Goal. The significance will be seen which one significant process and which one are not significant to the IT Goal. If the IT process there are not significant to the IT Goal, the process does not need to be repaired because it has no effect on IT Goal. Existing IT governance frameworks are COBIT, ITIL, ISO 20000, 17799/27001, Six Sigma, etc. The IT Infrastructure Library (ITIL), initially developed in the UK by the Office of Government Commerce (OGC), is gaining traction in the global IT community as a framework for IT governance. ISO 20000-focusing upon IT service management. ISO 17799 / ISO 27001 - focusing upon information. Six Sigma-focusing upon operational performance and defect identification. COBIT - framework for information IT management risks. Control Objectives for Information and related Technology (COBIT) provides good practices across a domain and process framework and presents activities in a manageable and logical structure. COBIT’s good practices represent the consensus of experts. They are strongly focused more on control, less on execution. These practices will help optimise IT-enabled investments, ensure service delivery and provide a measure against which to judge when things do go wrong. This research is intend to find out whether Cobit mapping Business Goal to IT Goal appropriate with case study. The result The results using SEM approach shows that the mapping of COBIT is not significant in the case studies of academic administration.

In recent years, IT organizations are in the process of introducing IT Governance as the concept and measure of transparency, accountability and effectiveness of IT activities and control for managing governance processes. In this paper, the influential factors for IT organizations to adopt COBIT(The Control Objectives for Information and related Technology) which is a typical framework for effective IT Governance execution were classified and analyzed empirically into internal and external factors. Internal factors were designed based on influential factors in the theory of innovation diffusion, and external factors were designed based on influential factors from outside certification which were absent in COBIT and expertise support from the outside. The result of this study showed that understandability, transition and effectiveness which were internal factors had no effect on COBIT introduction, and only expertise support among certification and expertise support which were external factors had significant effects. This result shows that there are lack of COBIT supports and introduction in internal IT organizations. It is expected that the result of this study will allow strategic approach of COBIT adoption in future by verifying influential factors of COBIT introduction within IT organizations.

Purpose – The purpose of this paper is to analyze how the COBIT framework, integrated within the internal control framework, enables improvement in the quality of financial reporting while helping to reduce or eliminate the material weaknesses (MWs) of internal control over financial reporting (ICFR). The Control Objectives for Information and Related Technology (COBIT) model is a framework for information technology (IT) management and IT governance. It is a supporting toolset that allows managers to bridge the gap between control requirements, technical issues and business risks. Preliminarily, the analysis in this paper illustrates how the Committee of Sponsoring Organizations (COSO) framework impacts on the MWs, highlighting strengths and weaknesses. This paper shows how these limits can be overcome with the use of the COBIT framework. Design/methodology/approach – This is a conceptual paper that aims to highlight the relationship between COBIT and COSO, by illustrating how the IT processes reduce or eliminate the main MW categories. Findings – The analysis indicates that the implementation of the COBIT framework, or more generally the adoption of effective IT controls, provides important benefits to the entire company or organization. IT control objectives have a direct impact on the IT control weaknesses and indirectly on the other categories of material weaknesses. Practical implications – The adoption of the framework allows managers to implement effective ICFR. In particular, the COBIT approach provides managers with a more evolved tool in terms of compliance with the Sarbanes–Oxley Act requirements. This framework also improves the reliability of financial reporting in relation to the requirements of Public Company Accounting Oversight Board’s Auditing Standards No. 2 and 5. Originality/value – The analysis provides an interdisciplinary approach, connecting accounting and information systems themes, and suggest solutions and tools than can help managers to address the internal control weaknesses. This paper addresses an area of relevance to both practitioners and academics and expands existing accounting literature.

Information technology (IT) has a critical importance. Information technology governance (ITG) is the system that allows enterprises to master the complexity of IT in order to maximize its use and to foster the competitive advantage. Control objectives for information and related technology (COBIT) is a well-known IT governance (ITG) framework that groups IT best practices. There is little research about the correlation between COBIT and domain specific frameworks, like supply chain operation reference (SCOR) for supply chain (SC). The paper proposes an approach to map SCOR's components to COBIT with ArchiMate, which is a standard language to model enterprise architecture (EA). The mapping can simplify, by visualization, the complexity of both frameworks. It can also provide a view on possible overlaps and synergies between SCOR and COBIT. Two detailed illustrations are presented. The evaluation is done according the Bunge-Wand-Weber method. An example of the utility of the mapping is done for a real case scenario.

Does good IT governance improve the effect of IT? This paper presents the IT Organization Modeling and Assessment Tool (ITOMAT) which has been created to overcome operationalization and subjectivity weaknesses in the Control Objectives for Information and related Technology (COBIT) framework. ITOMAT was applied to assess IT governance maturity in four case studies. Simultaneously, external metrics of the effect of IT were collected and correlated to the maturity levels. Based on the correlations, a model linking internal and external measures was created. The model can be used to predict the effect of IT given the maturity levels of IT processes.

Despite the extensive research on information technology (IT) outsourcing, our knowledge and understanding of how industry characteristics impact the use of IT outsourcing remain limited. Drawing upon theories from organization behavior and industrial economics, this study identifies four major industry characteristics (i.e., munificence, dynamism, concentration, and capital intensity) and investigates how each of these factors affects the use of IT outsourcing. Specifically, we postulate that the extent of industry munificence is positively related to the utilization of IT outsourcing. Since timely strategic actions are the crucial aspects of leveraging munificent resources, IT outsourcing, which can be implemented in short periods of time, is considered to be a preferred option in such environments. Furthermore, industry dynamism is also positively associated with IT outsourcing, given that firms in dynamically evolving industries tend to look for flexibility and avoid a large amount of fixed investments (e.g., IT development in-house). In contrast to these hypotheses, we predict that industry concentration is negatively related to IT outsourcing. Firms in concentrated industries are likely to develop their own IT infrastructures, as they are not constrained by institutional pressures or cost-driven strategic actions. Finally, because firms in capital-intensive industries tend to conform to long-standing traditional practices, and do not highly value novel and risky practices, they will be less likely to use IT outsourcing than firms in industries with low capital intensity. The data from the U.S. Bureau of Economic Analysis along with Compustat empirically validated all of the proposed hypotheses; however, only marginal support was found for the association between industry concentration and IT outsourcing. Our findings offer business executives and IT service providers strategic and managerial insights into the dynamics and complexities involved in the diverse aspects of industry environments and IT outsourcing decisions.

Purpose – This paper proposes a new research agenda for information technology (IT) outsourcing,motivated by the belief that the social capital concept enables IT outsourcing researchers to capture more of the nuances of the client–vendor relationship in IT outsourcing arrangements. Design/methodology/approach – The paper builds a comprehensive framework of social capital based on Nahapiet and Ghoshal (1998) to examine the IT outsourcing life cycle. Past research on IT outsourcing is examined applying the parameters of the framework to identify issues that have been addressed in research on IT outsourcing and to uncover the gaps in past research. Findings – The social capital framework is applied to IT outsourcing which suggests new avenues for future outsourcing research. Research limitations/implications – While past research has identified success factors for IT outsourcing, a significant number of outsourcing arrangement still fail to meet expectations. The research agenda presented in this paper encourages an examination of IT outsourcing from a different perspective to determine how to successfully manage IT outsourcing. Originality/value – The paper provides a new framework that is useful for identifying the relationships among past research in IT outsourcing as well as for identifying potential topics for future research.

Estudos sobre a terceirização da Tecnologia da Informação (TI) nas pequenas empresas são pertinentes em virtude da posição de destaque que essas organizações ocupam no mercado. Deste modo, esta pesquisa visa identificar os riscos da terceirização da TI nas pequenas empresas e analisar as iniciativas/ações adotadas para reduzir tais riscos. Como método de pesquisa, utilizou-se o estudo de casos múltiplos em pequenas empresas que utilizam Sistema de Informação (SI) terceirizado. Para tratamento dos dados, utilizou-se a análise de conteúdo. Os resultados indicam que o modelo identificado para as pequenas empresas, em que imperam as estratégias de curto prazo e as ações reativas, acaba por torná-las vulneráveis aos riscos da terceirização da TI. Limitações e oportunidades de pesquisa constam nas considerações finais.

The goal of this paper is to determine holistic archetypes of information technology (IT) outsourcing strategy. It does this through an overarching theoretical framework that integrates three dominant theories of inter-organizational relations in the IT outsourcing literature, namely transaction cost economics, resource dependency, and social exchange theories. A contingency fit theoretical framing is married to a configurational approach to explicate the intricate relationships that spring up between a focal firm and its outsourcing vendors when they are working toward specific strategic objectives under varying contingencies. In line with this theoretical objective, we used qualitative comparative analysis (QCA), a set-theoretic configuration method that can handle the interdependent complexity among multiple elements of IT outsourcing. The technique was applied to a sample of 235 companies that have outsourced some or all of their IT functions. Findings at the project level of analysis empirically reveal two sets of configurations of strategic IT outsourcing elements, one set of configurations resulting in high economic benefit and the other set leading to high strategic benefit. Next, we compare similarities and differences among multiple, equifinal configurations and infer archetypes of IT outsourcing strategy internally congruent in terms of the strategic objectives as well as matching specific contextual contingencies. Our holistic archetypes take the form of theoretical propositions integrating the previous fragmented and inconsistent knowledge in IT outsourcing resulting from the causal ambiguity and complexity inherent in IT outsourcing projects as well as from divergent theories in the literature. Furthermore, by defining specific contingency boundaries, our archetypes provide managers with context-specific guidelines for strategic decisions regarding their relationships with outsourcing vendors, helping different sized firms to effectively succeed in IT outsourcing, contingent on the IT type being outsourced. Finally, we discuss new insights and implications of this study for complementing and extending the extant theories in IT outsourcing.

Purpose– The purpose of this paper is to understand the roles various drivers such as cost, strategy and risk play when business process outsourcing/information technology enabled services (BPO/ITES) firms in India outsource their information technology (IT) functions to third-party vendors. If all key drivers associated with IT outsourcing were understood, and such knowledge of those variables was incorporated into the reasons for outsourcing, there would be a greater probability of a successful outcome.Design/methodology/approach– A “hybrid” (quantitative and qualitative) research methodology was used to gain insight into the IT-outsourcing paradigm by BPO/ITES firms in India. A structured questionnaire related to IT-outsourcing activities conducted from 1999 to 2010 was distributed to nine firms. The resulting data were then analyzed. In addition, two Indian BPO/ITES firms that had outsourced their IT to a third-party vendor to cut cost generously granted in-depth information into their IT-outsourcing paradigm and life cycle.Findings– IT outsourcing is perhaps more complicated than other types of outsourcing. Focussing purely on cost is very risky. Practitioners need to take all three drivers – cost, strategy and risk into consideration. Any degradation of services or responsibilities due to IT outsourcing would mean a very unhappy client or even loss of business.Originality/value– BPO/ITES firms in India tend to focus only on cost reduction from IT outsourcing without taking into consideration other equally important drivers such as strategy and risk. This paper counsels a holistic approach toward IT outsourcing for a successful outcome. In addition, an IT-outsourcing framework and guide is proposed for practitioners.

Many companies expand a great amount of effort to increase the performance of information technology (IT) outsourcing. Yet, in IT outsourcing, contracts is critical to the outcome and developing a good outsourcing contract is problematic. Unfortunately, the area of exploitation and operation outsourcing contract is still rather immature. Many firms fall into the black hole of contracts. This paper provides insight in techniques for developing IT outsourcing contracts. The goal of drafting an outsourcing contract is to combine the revenue of IT service provider with the company's profit and establish a win-win relationship. In this article we describe and discuss quality function deployment (QFD) as a framework for managing IT outsourcing requirements. In the manufacturing sector, QFD has been successfully applied to determine customers' needs for the design at its early stages of development. In order to overcome the difficulties arising from contract oriented specification and service-oriented customer satisfaction, the outsourcing contractor would find the QFD methodology useful. The research looks into the merits of the QFD system and the problems in the application of QFD in IT outsourcing contracts. The results suggest that using QFD is better focus on customers' outsourcing requirements and contributes to the outsourcing performance. Some factors would influence the quality of IT outsourcing contracts based on QFD, including adequate describing requirements, handing relations between requirements and the technology.

The main objective of this study is to extract maturity indices based on the control objectives for information and related technology (COBIT) model at every nine stages of project management. The whole population consisting of 57 experts that are familiar with the concepts of project management and information technology were considered and the designed questionnaire were distributed among them. For data analysis, partial least square technique (PLS) was employed. Based on the perception of the experts, the two variables of quality management and human resources were moderately significant while the rest of the variables were regarded as highly significant. The results obtained from the ranking of the variables of project management indicated that the variable of project communication management is regarded as the most significant. Among the variables of project management, which significantly affect the maturity of IT application, the variable of project quality had the highest direct effect on IT maturity.

This paper presents the proposed IT Control objectives for implementing the Public Finance Management Act of 1999 (PFMA) for the Republic of South Africa. The aspects covered in this paper show the main concerns of accounting officers in implementing the PFMA. The ability of IT Control Objectives for Information and related Technology (COBIT) to enable the participation of IT in the design and implementation of internal control over financial reporting for the PFMA is a major finding presented in this paper. However, this area of research is new and further studies to inform the responsibility of IT in facilitating the implementation of the PFMA need to be undertaken. This paper is a maiden effort in that direction.

  This study aims to inform the decision on adoption of cloud computing by a prospective cloud services consumer enterprise, including possible significant benefits of its adoption, in order to ensure informed and accountable information technology (IT) related decision-making. A literature review was performed to obtain information on cloud computing. Additionally, an IT governance control framework was used to systematically identify and categorise significant benefits of the adoption of cloud computing by an enterprise (including governmental organisations and business). The benefits of cloud computing adoption that was discovered include scale benefits and the transformation of a capital expense to a scalable operational expense.   Key words: Cloud computing, information technology (IT), control objectives for information and related technology (COBIT), IT governance, outsourcing.

The purpose of this research is to analyse a new phenomenon, Information Technology - Outsourcing (ITO), in two european countries : France and Germany. A mail-survey by 160 big german and french firms shows differences in ITO's practices of the firms of the two countries. Forty five per cent of the sample's firms outsourced (or are going to do it) Information-Technology. German firms don't outsource more easily than french firms. But they prefer to accompany ITO with a share in the assets of the IT's company. Furthermore ITO with decrease of employees are more numerous in France than in Germany.