Quiz on Outsourcing Fundamentals

What is the main reason companies engage in outsourcing?

• To reduce control over business operations

• To increase operational costs

• To improve efficiency and focus on core competencies

• To eliminate all in-house jobs

Which of the following is a key characteristic of a Shared Service Center (SSC)?

• It is owned by a third-party provider

• It provides services to clients of the service provider

• It is wholly owned by the parent company and serves affiliates

• It primarily handles only customer service operations

Which outsourcing strategy involves using vendors in the same country as the client?

• Offshoring

• Nearshoring

• Onshoring

• Crowdsourcing

What is the primary difference between core and non-core processes in outsourcing?

• Core processes are essential to a company's competitive advantage, while non-core processes are support functions

• Non-core processes are always outsourced, while core processes are not

• Core processes require no expertise, while non-core processes require high expertise

• Non-core processes have a higher risk of failure than core processes

Which of the following is an example of a non-core process that is commonly outsourced?

• Product design

• Payroll processing

• Strategic planning

• Research and development

Which outsourcing strategy involves transferring business operations to a nearby country?

• Offshoring

• Nearshoring

• Onshoring

• Crowdsourcing

What is a potential disadvantage of offshoring?

• Increased costs compared to in-house operations

• Lack of access to a global talent pool

• Language barriers and cultural differences

• Limited scalability of operations

What is a major benefit of crowdsourcing as an outsourcing strategy?

• It guarantees high-quality results with minimal supervision

• It leverages a large, undefined group to generate solutions

• It is a long-term strategy for building in-house expertise

• It eliminates the need for stakeholder engagement

Why are core business processes generally NOT outsourced?

• They are too expensive to outsource

• They require specialized knowledge and control for competitive advantage

• They do not contribute to a company's profitability

• No outsourcing firm is willing to take on core activities

Which of the following technologies plays a key role in supporting outsourcing operations?

• Manual record-keeping systems

• Web-based conferencing and workflow tools

• Traditional landline telephones

• Physical file storage systems