Risk in Outsourced IT Operations: A Systematic Literature Review of Technological Uncertainty, Knowledge Management and Opportunistic Behaviour

Abstract

Technological adoption and digital transformation are increasingly enabling organisations to gain a competitive advantage, underpin business processes and create efficiencies. Utilisation of technologies brings several risks such as the risk of cyber-attacks and infrastructure dependency. To mitigate these, and to reap other benefits, organisations are increasingly turning to third-party IT suppliers to innovate and manage their IT estates. The field of IT operations and supply chain management has gained extensive research over the decades; however, none seem to bring these aspects together with technology risk mitigation in a systematic way. This paper systematically reviews 63 articles to ascertain historical research trends to indicate future research interest and consolidate research themes to discuss the gaps in the extant research. Alongside the fact that academic interest is projected to continue, closely coupled with world events, important findings show that technological uncertainty, information asymmetry and opportunistic behaviour are closely coupled in outsourced IT operations, and that knowledge management acts as a key mitigation mechanism which is illustrated by a new conceptual model. The review also reveals that existing research focuses heavily on ex-ante IT operations outsourcing decisions, with limited attention given to the ex-post operational phase, where most risks in IT operations materialise. Several gaps are identified for the field including how knowledge management can be utilised to mitigate technology risk within the IT operations function linking out to technology adoption. More generally, research into the public sector is found to be underreported giving researchers another lens to investigate current research themes with or adopt those previously listed. Overall, the review provides an integrated understanding of technological uncertainty in outsourced IT operations and highlights key opportunities for further research into ex-post phase, specifically long-term knowledge management in sector-specific outsourcing.