Difficulty: Medium

Average Score: 50%

What is a common risk associated with outsourcing software development?

Rationale

Risk of breach of confidential information.

Outsourcing software development often involves sharing sensitive data and proprietary information with third-party vendors, which creates a significant risk of unauthorized access or data breaches. This vulnerability can lead to severe consequences, including financial losses and damage to reputation.

A (Short-term contracts that are difficult to renew) YOUR ANSWER

While short-term contracts can pose challenges, particularly regarding continuity and project completion, they are not inherently a risk unique to outsourcing. Many companies negotiate terms that allow for easy renewal or extension, and this issue can often be managed through effective contract management.

B (Lack of flexibility to respond to rapid market changes) YOUR ANSWER

Outsourcing may sometimes reduce a company's agility, but it does not universally lead to a lack of flexibility. In fact, many outsourcing arrangements are designed to enhance responsiveness by leveraging external expertise. Thus, while this may be a concern, it is not a common risk specifically attributed to outsourcing software development.

C (Risk of breach of confidential information) CORRECT

This choice highlights a critical concern in outsourcing, where the transfer of sensitive information to third parties increases the likelihood of data breaches. Companies must establish stringent security protocols and trust the vendor's ability to safeguard confidential data, making this risk a pervasive issue in outsourcing relationships.

D (High cost of developers' salaries) YOUR ANSWER

Outsourcing is typically pursued to reduce costs, including developer salaries, especially when engaging teams from regions with lower labor costs. Therefore, this option does not reflect a common risk; in fact, one of the primary motivations for outsourcing is to manage and lower expenses associated with software development.

Conclusion

Outsourcing software development carries specific risks, with the most significant being the potential for breaches of confidential information. This risk arises from the necessity to share sensitive data with external vendors, which can jeopardize a company's intellectual property and privacy. While other factors such as contract management and cost considerations are relevant, they do not represent inherent dangers associated with the outsourcing process.

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