Early assessing the risks involved in outsourcing and applying right strategies to reduce the risk exposure could mean the different between success and failure of an outsourced project. The risk assessment framework proposed in this thesis analyzes various risk factors in an outsourcing domain and assesses the risk level of each risk factor and forecasts the probability of a given project’s success/failure. The framework lists out the major risk factors in software outsourcing and provides guidance on how to determine the probability level of risk factors, using real case studies, conducted between Taiwan outsourcing company (client) and Indian outsourcing partner (supplier). In most cases, reducing the probability level of risk factors incurs costs. Assume that the marginal cost of reducing that probability is increasing. Henceforth, any reduction of the probability of a risk factor below certain level comes with exponential rising costs. Therefore, it is never desirable to drive that risk probability level to zero and in most of the real cases. However, if the risks involved in outsourcing are well understood and proper strategies are put in place, it could result in higher probability in project success while allowing one to proceed with the calculated risks, rather meeting sudden surprises. No doubt that, before it yields reliable forecasts, this kind of model will require many years of calibration, by comparison between the predictions it gives, and the realities, observed from projects outsourced. However, in the short term, this can bring a rationale in the discussions between experts and determine the most influential risks in an outsourcing domain.