The Influential role of perceived risks and perceived benefits on the attitude of the Philippine insurance industry towards IT outsourcing

The outsourcing market continues to grow and expand, particularly for Information Technology (IT) outsourcing. However, there remains a small number of research targeting the adoption of this business strategy. According to Gewald and Dibbern (2005), the attitude towards outsourcing can greatly affect the decision of companies to outsource. Also, it was determined through their study that perceived risks and perceived benefits have an influential role on the attitude towards outsourcing, particularly in the German Bank industry. For this reason, this paper sought to apply such findings toward Philippine insurance companies, that are said to be one of the slowest adopters of IT outsourcing (Raghu, 2008). A questionnaire, evaluated using a positive-to-negative 7-point Likert Scale, was given out to 39 randomly selected insurance companies in the Philippines, and was analyzed through Multiple Regression Models. It was found out that perceived risks and perceived benefits have a significant impact on the attitude towards IT outsourcing. Moreover, access to specialized resources and psycho-social risk were the strongest factors for determining perceived benefits and perceived risks, respectively. This suggests concurrence towards previous studies, as well as a differences due to industrial, environmental and cultural settings.