Governance of Enterprise IT (CGEIT) Certification Practice Exam

For successful governance of outsourcing, what must both parties ensure?

1. Establish clear roles and responsibilities

2. Agree to service level agreements

3. Include an explicit contract governance schedule

4. Ensure contractual viability

The correct answer is: Ensure contractual viability

For successful governance of outsourcing, ensuring contractual viability is essential as it pertains to the ability of both parties to meet their obligations under the outsourcing agreement throughout its duration. This means that the contracts must be designed in a way that not only supports the current needs of both organizations but also remains relevant and adaptable to future changes that may occur in business operations, technology, or market conditions. Contractual viability ensures that both parties can sustain the agreement over time, effectively managing changes and potential risks. It encompasses financial stability, resource availability, and the strategic alignment between the contracting organizations, ensuring that they can fulfill their commitments and adapt to any unforeseen circumstances. While establishing clear roles and responsibilities, agreeing to service level agreements, and including a contract governance schedule are all important aspects of outsourcing arrangements, they primarily facilitate the operational and tactical execution of the services. Contractual viability prioritizes the overall sustainability and long-term success of the partnership, which is the foundation for effective governance in outsourcing scenarios.