CGEIT · Question #427
When updating an IT governance framework to support an outsourcing strategy, which of the following is MOST important?
The correct answer is D. Ensuring the effective management of contracts with third-party providers. When adapting an IT governance framework for an outsourcing strategy, the most critical aspect is establishing robust processes for effectively managing contracts with third-party providers. This ensures clear responsibilities, performance monitoring, and risk mitigation…
Question
When updating an IT governance framework to support an outsourcing strategy, which of the following is MOST important?
Options
- AEvaluating the choice of underlying technology platforms used by the service provider
- BEnsuring the outsource provider's IT function is aligned with its business function
- CVerifying the vendor has developed standard operation procedures for outsourced functions
- DEnsuring the effective management of contracts with third-party providers
How the community answered
(23 responses)- A9% (2)
- B13% (3)
- C4% (1)
- D74% (17)
Why each option
When adapting an IT governance framework for an outsourcing strategy, the most critical aspect is establishing robust processes for effectively managing contracts with third-party providers. This ensures clear responsibilities, performance monitoring, and risk mitigation throughout the outsourcing lifecycle.
Evaluating technology platforms is a due diligence step during vendor selection, not the most important aspect of ongoing governance of the outsourcing strategy.
Ensuring the outsource provider's internal IT-business alignment is primarily the provider's responsibility and a factor in their overall capability, less critical to the client's governance framework than contract management.
Verifying standard operating procedures (SOPs) is part of due diligence and ongoing performance monitoring, which falls under effective contract management rather than being the most important governance aspect itself.
For an outsourcing strategy, the relationship between the organization and external providers is defined and governed by contracts. Effective contract management ensures that service levels are met, risks are mitigated, compliance is maintained, and costs are controlled, which is fundamental to successful IT governance in an outsourced environment.
Concept tested: IT governance in outsourcing, contract management
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