Exam L4M4 Topic 1 Question 261 Discussion

Actual exam question for CIPS's L4M4 exam
Question #: 261
Topic #: 1
What are the risks of outsourcing?
* Loss of control of a project
* Loss of assets
* Loss of future business opportunities
* Loss of private information

Suggested Answer: A Vote an answer

Outsourcing can create risks such as loss of control over a project (1) since operations are managed externally, and loss of private information (4) if data security and confidentiality are not managed effectively. Loss of assets (2) typically refers to internal asset disposal, not outsourcing. Loss of future business opportunities (3) is more linked to strategic misalignment, not a core outsourcing risk. Responsible sourcing emphasises that outsourcing should include robust governance, contractual protections, and supplier monitoring to manage risks of data leakage, reduced oversight, and potential ethical breaches.
Reference: CIPS L4M4 Study Guide (v2), LO: "Implications" - outsourcing risks and ethical considerations.

by Nathan at Jul 16, 2026, 08:12 PM

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