Vendor Risks in Remote Infrastructure Management Services

Remote Infrastructure Management Services (RIMS) is a fast growing service in IT which has been outsourced to third party service providers by leading global firms. Service providers in this line face huge challenges because they have to ensure agreed upon service levels by monitoring and controlling the client’s infrastructure from an offshore location. This chapter explores the relatively nascent area of RIMS to identify and categorize service provider risks. The three categories of risks that emerged from this analysis are: (i) service delivery risks, (ii) relationship specific risks, and (iii) macroeconomic risks. There is a close relationship between the first two categories of risks and similar categories of risks in application development. However, dimensions of timeline and requirements uncertainty elicit a different set of risks in RIMS. Relationship maturity, nature of client, contract design, and nature of service are contextual factors which influence the degree of risks in RIMS.