The Cost Reduction Must Be Significantly Lower Than the Current

question 25

Multiple Choice

The cost reduction must be significantly lower than the current direct operating costs in order for an outsourcing proposal to be attractive. The generic strategic benefits of outsourcing are listed below with one exception. Which one is not one of the strategic benefits?

• A) Refocusing the organization to its core competencies is accomplished by focusing what the organization does best and/or transforming the business to focus on new products and services.
• B) Increased market share and revenue is accomplished by assessing the providers' network and accelerating expansion into new markets.
• C) Cost minimization is accomplished by reducing direct operating costs, eliminating overhead costs, and transforming fixed costs into variable costs.
• D) Improvement in the organization's core competencies by increasing productivity, reducing indirect operating expenses, lowering overhead, and expanding services.
• E) Improvement in operating performance is accomplished by increasing quality, increasing productivity, and obtaining new capabilities technologies from external sources.