Value-at-Risk in IT Services Contracts

As information systems (IS) and technology solutions become increasingly service-driven, managers are faced with the task of choosing parameters such as service-levels, pricing, and contract duration. Information technology (IT) services vendors manage portfolios of contracts in which parameters, de...

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Main Authors: KAUFFMAN, Robert J., SOUGSTAD, Ryan
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2007
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Online Access:https://ink.library.smu.edu.sg/sis_research/2172
https://ink.library.smu.edu.sg/context/sis_research/article/3172/viewcontent/ValueAtRiskITServicesContracts_2007.pdf
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Institution: Singapore Management University
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spelling sg-smu-ink.sis_research-31722016-05-10T02:48:10Z Value-at-Risk in IT Services Contracts KAUFFMAN, Robert J. SOUGSTAD, Ryan As information systems (IS) and technology solutions become increasingly service-driven, managers are faced with the task of choosing parameters such as service-levels, pricing, and contract duration. Information technology (IT) services vendors manage portfolios of contracts in which parameters, decided at inception, are often subject to future risks. The contract profit maximization decision may adversely affect the risk position of the firm's portfolio of services contracts. We propose a model to inform vendors on setting optimal parameters for IS contracts subject to acceptable levels of risk. The analytic model presented draws from IS economics research and the principles of value-at-risk (VaR) from financial economics. We provide examples which illustrate the trade-offs of profit maximizing contractual decisions to portfolio profit-at-risk (PaR). The contribution of this research is the application of VaR analysis to IS contractual decisions and the conceptualization of an economic model of IS service contracts which embeds value-at-risk constraints 2007-01-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/sis_research/2172 info:doi/10.1109/HICSS.2007.603 https://ink.library.smu.edu.sg/context/sis_research/article/3172/viewcontent/ValueAtRiskITServicesContracts_2007.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Computing and Information Systems eng Institutional Knowledge at Singapore Management University Contract evaluation Financial economics IT services Managerial decision making Mechanism design Value-at-risk Computer Sciences Management Information Systems
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Contract evaluation
Financial economics
IT services
Managerial decision making
Mechanism design
Value-at-risk
Computer Sciences
Management Information Systems
spellingShingle Contract evaluation
Financial economics
IT services
Managerial decision making
Mechanism design
Value-at-risk
Computer Sciences
Management Information Systems
KAUFFMAN, Robert J.
SOUGSTAD, Ryan
Value-at-Risk in IT Services Contracts
description As information systems (IS) and technology solutions become increasingly service-driven, managers are faced with the task of choosing parameters such as service-levels, pricing, and contract duration. Information technology (IT) services vendors manage portfolios of contracts in which parameters, decided at inception, are often subject to future risks. The contract profit maximization decision may adversely affect the risk position of the firm's portfolio of services contracts. We propose a model to inform vendors on setting optimal parameters for IS contracts subject to acceptable levels of risk. The analytic model presented draws from IS economics research and the principles of value-at-risk (VaR) from financial economics. We provide examples which illustrate the trade-offs of profit maximizing contractual decisions to portfolio profit-at-risk (PaR). The contribution of this research is the application of VaR analysis to IS contractual decisions and the conceptualization of an economic model of IS service contracts which embeds value-at-risk constraints
format text
author KAUFFMAN, Robert J.
SOUGSTAD, Ryan
author_facet KAUFFMAN, Robert J.
SOUGSTAD, Ryan
author_sort KAUFFMAN, Robert J.
title Value-at-Risk in IT Services Contracts
title_short Value-at-Risk in IT Services Contracts
title_full Value-at-Risk in IT Services Contracts
title_fullStr Value-at-Risk in IT Services Contracts
title_full_unstemmed Value-at-Risk in IT Services Contracts
title_sort value-at-risk in it services contracts
publisher Institutional Knowledge at Singapore Management University
publishDate 2007
url https://ink.library.smu.edu.sg/sis_research/2172
https://ink.library.smu.edu.sg/context/sis_research/article/3172/viewcontent/ValueAtRiskITServicesContracts_2007.pdf
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