Sourcing Strategy & Governance Flashcards

What is offshoring as a sourcing strategy in ITIL Service Strategy?

Answer: Relocating service delivery to a different country, typically to leverage cost or talent advantages

Offshoring moves service delivery functions to another country, commonly to access lower labor costs, extended operating hours, or specialized talent not available domestically.

Application Service Provision (ASP) as a sourcing model is best characterized by:

Answer: A provider delivering standardized software applications over a network to multiple customers on a subscription basis

ASP involves a third-party provider hosting standardized applications and delivering them to multiple customers over a network, with customers paying on a subscription or usage basis rather than owning the software.

In an outsourced ITIL service model, the 'retained organization' refers to:

Answer: The core internal team responsible for managing supplier relationships, contracts, and governance

The retained organization is the internal capability kept post-outsourcing to govern suppliers, manage contracts, define requirements, and ensure the business receives what it needs.

In a complex multi-sourcing environment, which entity is responsible for managing interfaces between suppliers and ensuring end-to-end service coherence?

Answer: A service integrator — an internal or external entity that coordinates multiple supplier outputs into unified delivery

The service integrator role — whether filled internally or by a specialist provider — manages supplier interdependencies, resolves cross-supplier issues, and ensures the business experiences coherent end-to-end services.

What strategic risk is most associated with single-source outsourcing — relying on only one external provider?

Answer: Vendor lock-in and significantly reduced negotiating leverage

Single-source dependency creates vendor lock-in — the organization becomes strategically dependent on one supplier, raising switching costs and weakening the organization's ability to negotiate or change providers.

Which sourcing strategy is most appropriate when an organization needs highly specialized expertise that would be economically inefficient to develop and maintain in-house?

Answer: Outsourcing to a provider with existing deep expertise in that specialization

Outsourcing is the rational choice when building and retaining specialist skills in-house would be uneconomical relative to accessing them through a provider for whom those skills are core capability.

Why is exit management planning important in ITIL sourcing governance, and when should it begin?

Answer: It ensures a smooth service transition if the sourcing arrangement changes, and should be planned from contract inception

Exit management planning — started at contract inception — ensures the organization can transition services without disruption if a supplier fails, the contract ends, or a different sourcing model is needed.