What should an organization consider when deciding to retain or outsource specific IT services?

Question

Options

• AShort-term cost optimization
• BCultural barriers and associated risks
• CImmediate staff reduction
• DTransfer of responsibility for highly tailored services

• A
  9% (3)
• B
  85% (29)
• C
  3% (1)
• D
  3% (1)

Explanation

Retaining vs. outsourcing IT services requires evaluating cultural barriers and associated risks because misalignment between an organization's culture and a vendor's working practices, values, or communication styles can undermine service quality, security, and trust - making it a fundamental strategic concern, not just a financial one.

Why the distractors are wrong:

• A (Short-term cost optimization): Outsourcing decisions should be driven by long-term strategic value. Focusing only on short-term savings ignores hidden costs, transition risks, and dependency lock-in.
• C (Immediate staff reduction): Headcount reduction may be a consequence of outsourcing, but it is not a sound basis for the decision - using it as the primary driver leads to poor outcomes.
• D (Transfer of responsibility for highly tailored services): This is actually an argument against outsourcing: services that are highly customized to organizational needs are typically better retained in-house, since vendors struggle to replicate bespoke capabilities effectively.

Memory tip: Remember "Culture eats strategy for breakfast" - when outsourcing decisions ignore cultural fit and risk, even well-structured contracts fail. If the exam offers a human/organizational factor alongside a purely financial one, the human factor usually wins in ITIL/service management contexts.

No community discussion yet for this question.