| With the proliferation of outsourcing and the resulting closeness with which companies work with their vendors (many vendors also manage the IT infrastructure at these companies) the safety of a company's secrets and proprietary competitive practices becomes an important issue. It becomes important to understand how these practices can be compromised in an outsourcing interaction. While there is a growing concern about the larger costs and risks of the wholesale outsourcing of analytics functions in the business press, there are no statistics on the risks or a sense of how big they might be. This paper attempts to fill this gap in the data by building a mathematical model of the vendor-client interaction that will allow some baseline quantification of the risks that are inherent in analytics outsourcing. The paper also discusses the implications of these ideas for companies that work with outsourcing vendors and closes with some ideas for further research. |
Updated 03/19/2014