Which of the following outcomes may result from hidden costs in outsourcing?

Study for the Information Technology Applications 203C (ITA203C) FE Test. Utilize flashcards and multiple-choice questions, each with hints and explanations. Prepare effectively for your exam!

Hidden costs in outsourcing can lead to unexpected financial losses, making this the correct choice. When a company outsources services or tasks, it often focuses on the anticipated savings and benefits. However, factors such as unanticipated expenses related to managing the outsourced provider, costs associated with transition or integration issues, or necessary compensations for below-standard service can accumulate unexpectedly.

These hidden costs can significantly impact the overall financial picture of the outsourcing decision, sometimes rendering the initial calculations of savings inaccurate. These losses can stem from factors such as decreased service quality, which may result in additional expenditures for the company to remedy the situation or maintain performance levels.

The other outcomes do not directly relate to the implications of hidden costs. Operational improvements and enhanced service delivery may occur as intended goals of outsourcing, but they are not guaranteed or linked to hidden costs. Similarly, reduced vendor monitoring efforts could occur if a company assumes the outsourced vendor will meet expectations without issues, but this does not account for the potential for hidden costs that require more oversight, not less.

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