ITIL Sourcing Strategy & Governance 1 — Questions and Answers
Question 1: Which sourcing strategy involves delivering IT services exclusively using internal organizational resources and capabilities?
- Outsourcing
- Insourcing (Correct answer)
- Co-sourcing
- Multi-sourcing
Correct answer: Insourcing
Insourcing means the organization uses its own internal staff and resources to deliver IT services, retaining full control and accountability within the organization.
Question 2: What is co-sourcing in the context of ITIL Service Strategy?
- Outsourcing all IT services to a single external provider
- A combination of internal staff and external supplier resources for service delivery (Correct answer)
- Sharing equal ownership of services between two separate organizations
- Procuring services exclusively from offshore providers
Correct answer: A combination of internal staff and external supplier resources for service delivery
Co-sourcing blends internal resources with external supplier capabilities, enabling organizations to leverage both in-house knowledge and external expertise.
Question 3: Which sourcing model involves transferring responsibility for an entire business function — including outcomes — to an external provider?
- Application Service Provision
- Insourcing
- Business Process Outsourcing (BPO) (Correct answer)
- Knowledge Process Outsourcing (KPO)
Correct answer: Business Process Outsourcing (BPO)
BPO transfers full ownership and accountability for a complete business function to an external provider, not just discrete tasks or technology components.
Question 4: In ITIL Service Strategy, what is the primary driver for an organization choosing an outsourcing strategy?
- To eliminate all IT-related risks from the organization
- To access specialized skills and reduce costs while focusing on core competencies (Correct answer)
- To ensure complete operational control over all IT infrastructure
- To comply with mandatory industry regulations requiring external delivery
Correct answer: To access specialized skills and reduce costs while focusing on core competencies
Outsourcing enables organizations to leverage specialist provider expertise, reduce operational costs, and refocus internal resources on core business differentiators.
Question 5: Which sourcing model describes a formal arrangement where two organizations share investment, risks, and responsibility for a joint business venture?
- Multi-sourcing
- Co-sourcing
- Partnership (Correct answer)
- Offshoring
Correct answer: Partnership
A partnership is a formal arrangement with shared investment and risk between two organizations, typically involving joint governance and mutual accountability for outcomes.
Question 6: What does multi-sourcing mean in ITIL Service Strategy?
- Engaging a single vendor to supply multiple service types
- Obtaining different IT services from multiple independent external providers (Correct answer)
- Providing the same service to multiple customer organizations
- Sourcing services across multiple internal departments
Correct answer: Obtaining different IT services from multiple independent external providers
Multi-sourcing means the organization deliberately distributes service procurement across several independent external providers rather than concentrating on a single supplier.
Question 7: How does Knowledge Process Outsourcing (KPO) differ from Business Process Outsourcing (BPO)?
- KPO is always less expensive than BPO
- KPO focuses on outsourcing knowledge-intensive, judgment-based processes requiring domain expertise (Correct answer)
- KPO is restricted to IT-related processes only
- KPO only applies to large multinational enterprises
Correct answer: KPO focuses on outsourcing knowledge-intensive, judgment-based processes requiring domain expertise
KPO outsources processes that require significant domain knowledge, analytical judgment, and expertise — going beyond the routine execution that characterizes BPO.
ITIL Sourcing Strategy & Governance 1
Which sourcing strategy involves delivering IT services exclusively using internal organizational resources and capabilities?