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Costs, Benefits, and Risks
Abstract
Managing costs successfully requires more than traditional cost accounting. It requires an understanding of cost-influencing factors based on cost-explaining theories, such as production and transaction economics, hidden costs, and contract termination costs. Managing IT outsourcing successfully implies that costs are not judged in isolation. Rather costs are compared to benefits, before judgments on cost level and development occur. In this chapter, we discuss production and transaction economics, hidden costs and contract termination costs, and we will also take a look at benefits and risk behavior.
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