Deck 16: It Sourcing

Question 1

One way organizations can avoid risks and problems associated with offshore sourcing is to investigate nearshore opportunities in lower-cost areas of their own countries.

Answer 1

True

Question 2

Most organizations use outsourcing as a tool for achieving an organization's strategic objectives as well as driving costs down and adding capacity.

Answer 2

True

Question 3

When considering the outsourcing proposition, organizations need to articulate a sourcing strategy which balances internal versus external capabilities.

Answer 3

True

Question 4

While outsourcing in general reduces an organization's control over how its services are delivered, offshore sourcing can greatly increase these risks because the vendors operate in substantially different business environments.

Question 5

Careful selection of what to outsource and what to retain in-house is a more effective approach than total outsourcing.

Question 6

While strategic sourcing is more of a recent trend, companies have lots of experience doing it.

Question 7

Short-term outsourcing contracts are less likely to be successful than mid- or long-term contracts, because they involve much more uncertainty.

Question 8

Organizations are seeing that outsourcing can give them access to world-class capabilities, disciplines, quality, and innovation.

Question 9

IT outsourcing decisions reflect a significant shift in business strategy from diversification to a focus on core competencies.

Question 10

Any outsourcing approach will introduce new levels of risk to the organization.

Question 11

When both the business and IT executives are involved in making outsourcing decisions, the results are much less likely to meet expectations than when either group acts individually.

Question 12

Better connectivity, the availability of high-quality staff, and much lower costs are changing sourcing markets and expanding sourcing possibilities for organizations.

Question 13

Right sourcing is facilitated by ever-greater connectivity; ubiquitous, cheap bandwidth; and Web technologies, companies can afford to knit together people, processes, and platforms in different ways than have been possible previously.

Question 14

Outsourcing is not widely accepted as part of doing business.

Question 15

The pace of daily life, employees' relationship to authority, attitudes to security, and adherence to socialist principles can be considered risks of offshore sourcing.

Question 16

While interest in outsourcing is growing, there is still considerable reluctance to use IT outsourcing.

Question 17

Organizations tend to begin outsourcing for operational efficiency and move toward tactical and strategic approaches as they gain experience and confidence at each level.

Question 18

The main driver of tactical support outsourcing is cost reduction.

Question 19

The emerging external IT services marketplace offers rich opportunities and many possibilities for IT organizations to become more cost effective.

Question 20

While routine activities are often outsourced and should be looked at holistically, outsourcing is still an ad hoc process and is based on current needs.

Question 21

Between ________ of all outsourcing functions are deemed failures.

A) 4% to 28%
B) 14% to 78%
C) 28% to 75%
D) 30% to 88%
E) 34% to 58%

Question 22

Outsourcing involving vendors at increasingly greater distances, typically in other countries, is known as:

A) near sourcing.
B) offshore sourcing.
C) right sourcing.
D) strategic sourcing.
E) None of the above

Question 23

The main driver of strategic impact outsourcing is:

A) cost reduction.
B) capacity and flexibility.
C) strategic focus.
D) business value.
E) strategic focus and business value.

Question 24

The main driver of tactical support outsourcing is:

A) cost reduction.
B) capacity and flexibility.
C) strategic focus.
D) business value.
E) strategic focus and business value.

Question 25

The outsourcing approach that allows new technologies to be quickly introduced to the organization is called:

A) outsourcing for operational efficiency.
B) outsourcing for tactical support.
C) outsourcing for strategic impact.
D) outsourcing for competitive advantage.

Question 26

The most important element of successful sourcing is a complete understanding of:

A) the cost structures.
B) the risks involved.
C) the loss of control and poor-quality work.
D) security and privacy problems.
E) the relative importance of key IT skills.

Question 27

Choosing the appropriate sourcing option for a given activity is known as:

A) near sourcing.
B) offshore sourcing.
C) right sourcing.
D) strategic sourcing.
E) None of the above

Question 28

Which of the following outsourcing critical success requires the identification of hidden costs involved in outsourcing such as extra maintenance or consulting fees?

A) Selective sourcing
B) Comparison with internal operations
C) Joint business-IT sponsorship
D) Developing a detailed contract
E) Limiting the length of the contract

Question 29

IT outsourcing has been a significant factor in IT decision making since the early:

A) 1970s.
B) 1980s.
C) 1990s.
D) 2000.

Question 30

The outsourcing approach used as a tool for achieving an organization's strategic objectives as well as driving costs down and adding capacity is considered:

A) outsourcing for operational efficiency.
B) outsourcing for tactical support.
C) outsourcing for strategic impact.
D) outsourcing for competitive advantage.

Question 31

Monitoring, bargaining, and negotiating needed changes to a sourcing contract typically add up to about ________ of the yearly contract amount.

A) 3%
B) 5%
C) 8%
D) 10%
E) 12%

Question 32

Which of the following represent risks associated with outsourcing?

A) Loss of control and poor-quality work
B) Security and privacy problems
C) Hidden costs and lack of standards
D) Unmet expectations and bad publicity
E) All of the above

Question 33

The main driver of operational outsourcing is:

A) cost reduction.
B) capacity and flexibility.
C) strategic focus.
D) business value.
E) strategic focus and business value.

Question 34

As ________ has developed, contracts have become more flexible and outsourcers have come to be viewed increasingly as partners who can add other forms of value rather than simply reducing cost.

A) outsourcing for operational efficiency
B) outsourcing for tactical support
C) outsourcing for strategic impact
D) outsourcing for competitive advantage

Question 35

Eighty-five percent of all offshore outsourcing work currently goes to which country?

A) India
B) Canada
C) Russia
D) The Peoples Republic of China
E) Philippines

Question 36

IT outsourcing involves:

A) transferring only some of an organizations IT activities to a third party.
B) transferring all of an organization's IT activities to a third party.
C) transferring all or some of an organizations IT activities to a third party.
D) transferring all of an organization's IT activities to a third party in a different country.
E) transferring all or some of an organizations IT activities to a third party in a different country.

Question 37

IT outsourcing is:

A) a way to lower IT costs.
B) a way for IT groups to focus on their core strengths.
C) a way for IT to acquire expertise.
D) often part of a much larger IT strategy.
E) All the above

Question 38

The most established approach to outsourcing is:

A) outsourcing for operational efficiency.
B) outsourcing for tactical support.
C) outsourcing for strategic impact.
D) outsourcing for competitive advantage.

Question 39

Originally, outsourcing decisions were driven largely by ________.

A) economics.
B) location.
C) technology.
D) expertise.
E) convenience.

Question 40

The growth of sourcing over the past decade has led to a number of new roles for IT managers and has changed:

A) the cost structures.
B) the risks involved.
C) the loss of control and poor-quality work.
D) security and privacy problems.
E) the relative importance of key IT skills.

Question 41

List and describe (4) strategies organizations can use to insure a successful outsourcing experience.

Question 42

Does any one outsourcing approach preclude any other outsourcing approach?

Question 43

What is the percentage of all outsourcing functions that are deemed failures? What is the most likely cause of an outsourcing failure?

Question 44

What is the driving force behind offshore sourcing? What are some of the unique advances in technology that make offshore souring feasible?

Question 45

List and describe (3) way organizations can mitigate the risk associated with outsourcing.

Question 46

List and describe (5) five factors that are critical to the success of current outsourcing initiatives.

Question 47

What are some reasons that outsourcing possibilities continue to expand?

Question 48

List and describe (3) common and complementary approaches to IT outsourcing.

Question 49

What are some risks associated with offshore sourcing?

Question 50

Is there any danger for the organization associated with IT outsourcing?