Why do cost overrides with outsourcing occur more frequently than projected?Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer.aInformation technology is deemed a compatible systembClient demands are outside of the standard vendor packagecOrganizations are inexperienced with vendor selectiondVendors will make contracts that are biased in their favour
Question
Why do cost overrides with outsourcing occur more frequently than projected?Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer.aInformation technology is deemed a compatible systembClient demands are outside of the standard vendor packagecOrganizations are inexperienced with vendor selectiondVendors will make contracts that are biased in their favour
Solution
Cost overrides with outsourcing occur more frequently than projected due to several reasons:
a) Information technology is deemed a compatible system: While this might be true, it doesn't directly contribute to cost overrides. Compatibility of IT systems is more about ensuring smooth operations rather than cost implications.
b) Client demands are outside of the standard vendor package: This is a common reason for cost overrides. If a client's demands exceed what is included in the standard vendor package, additional costs will be incurred to meet these demands. This can lead to cost overrides if these additional demands were not factored into the initial cost projections.
c) Organizations are inexperienced with vendor selection: This can also lead to cost overrides. If an organization lacks experience in selecting vendors, they may not accurately estimate the costs involved. This can result in cost projections that are lower than the actual costs, leading to cost overrides.
d) Vendors will make contracts that are biased in their favour: This is another common reason for cost overrides. If a vendor creates a contract that is heavily biased in their favour, it can lead to additional costs for the client. These additional costs may not have been included in the initial cost projections, leading to cost overrides.
So, the most accurate answers would be b), c), and d).
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