Loss of jobs. Without it, carefully negotiated and documented rights in an outsourcing contract run the risk of not being enforced, and the relationship that develops may look nothing like what you envisioned. Outsourcing trends and risk implications One might be forgiven for thinking that anything that could be said, learnt or considered about outsourcing has already been said, learnt or considered one hundred times over. 1. Expert Answer 100% (1 rating) Previous question Next question Outsourcing (BPO) – Risk Evaluation Business Process Outsourcing is not a new idea, the first “outsource” deal was struck almost 40 years ago when it was termed “timesharing.” Today, it is more than merely outsourcing IT functions to an external supplier to provide application management or development for instance. If company adopts outsourcing of complete processes or products, there is further risk that outsourcing partner may start his own business which may increase competition. Question 1 3 pts Which of the following is a risk that a company faces when it outsources its operations? Any arrangement with suppliers has elements of risk involved with it; however, risks associated with sourcing internationally are often higher. Reduced access to management expertise in the outsourced function. Loss of control. Supplier risk. Due diligence and selection of service providers: Prior to engaging a service provider, it is important to exercise due diligence … Organizations opting for outsourcing cannot gain economies of scale. 10 points QUESTION 21 Which of the following is a risk of outsourcing information systems? Sweat Shopping: The firms which opt for outsourcing aim at lowering their costs, try to get maximum benefit from the low cost manpower of the host countries. All the above The following sections discuss the diverse outsourcing risks which must be examined in the course of a make or buy decision: 1. Loss of business knowledge. A) expensive technology B) limit access to talent C) flexibility D) control E) speed. BUSINESS RISKS RELATED TO SOURCING. Which of the following is a risk of outsourcing information systems (IS)/information technology (IT) functions? Group of answer choices. Vendors can gain access to critical knowledge of the outsourcing company. Which of the following is a risk of using outsourcing? Lower productivity. asked Jun 12, 2016 in Business by CurryManiac. Vendors are not subject to a contractual agreement with the outsourcing company. Which of the following is NOT a risk of outsourcing? asked Jun 17, 2016 in Business by Hardwell. introduction-to-business; 0 Answers. The cost of labor for the outsourcing company may decline. Makes it easier to expand outside of the home country. CIOs also name contractual obligations are the main barrier to outsourcing, while in the UK company culture combined with an unwillingness to relinquish control were the main inhibitors. An outsourcing lawyer can be most effective in guiding the client around common pitfalls if the lawyer is brought into the deal early as an integral part of the RFP development, evaluation, and negotiation phases. Failure to manage outsourcing risk can have the following impact: The perception of dependency on the external service provider is often seen as an important risk for organizations. Reduced functional information technology requirements. 0 votes. A) It is easier to end an agreement between a vendor and an organization that hired the vendor. Outsourcing in all manner of domains has been with us for some time now, nowhere more so than in the realm of the financial industry. The long-term costs of information systems are outweighed by their benefits. If the outsourcing operation is too profitable, the outsourcing company may want to acquire the third-party provider. Lower variable cost of operations. Which of the following is a risk of outsourcing? 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