Companies that use metrics to measure process quality and can codify the work is indicative of a critical process whose operational risk in outsourcing is __________.

Question

BlackTom AI · Accepted Answer

The question presents a statement and asks about the operational risk in outsourcing a critical process that is measured with metrics and codified. Since there are no answer choices to compare, we focus on evaluating the claim.

First, consider the idea that using metrics to measure process quality implies standardization and objective oversight. When a process is quantified, performance can be tracked, variances identified, and corrective actions implemented consistently. This tends to reduce uncertainty and potential failures in the outsourced activity, which supports a lower operational risk profile compared to a process that is poorly defined or lacks performance metrics.

Second, codifying the work means there are documented procedures, controls, and workflows. Clear instructions and formalized governance help ensure that the external provider follows the expected standards, reducing the chance of miscommunication, drift, or ad hoc practices. This further contributes to lowering risk in an outsourcing arrangement, especially for a critical process where failures would have significant impact.

However, it is important to balance this with caveats: even well-measured and codified processes can carry residual risk due to dependency on the outsourcing partner, potential changes in requirements, or external disruptions. Metrics and codification reduce risk but do not eliminate it entirely.

In summary, the assertion that such a configuration indicates a lower operational risk in outsourcing is logically plausible because measurement and formalization tend to increase control, visibility, and consistency, all of which mitigate risk compared to unmanaged or poorly defined processes.

Companies that use metrics to measure process quality and can codify the work is indicative of a critical process whose operational risk in outsourcing is __________.

View Explanation

Log in for full answers

Similar Questions

Technological failure, employee fraud and employee errors are all sources of operational risk.

Question at position 22 Operational Risks include vendors raising prices, sharing intellectual property, and unstable political environments.Operational Risks include vendors raising prices, sharing intellectual property, and unstable political environments.TrueFalse

Which of the following is an example of operational risk?

The process that has the highest Operational Risk is typically

Linear processes are poses less operational risk than processes where work flows back and forth between workers and therefore is easy to offshore.

Operational risk refers to risk that processes will not operate smoothly after being offshored or outsourced.

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler