Determining IT risk in an outsourcing arrangement starts with understanding exactly what is being outsourced — the specific processes, data, and responsibilities being handed over to the provider. The scope of services provided establishes this boundary and is the foundation upon which all other risk considerations (service levels, audit rights, security controls, compliance obligations) are built. Without a clearly defined scope, it is not possible to accurately assess the risk exposure, because the organization would not know which data-intensive processes, systems, or responsibilities are within the provider's control versus retained internally. SLAs, audit rights, and customer reviews are all important governance and monitoring tools, but they are secondary — they depend on first knowing the scope of what is being outsourced.
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