Answer to Question 1
Ostensibly there are many benefits to outsourcing ERP systems. But there are some less obvious reasons why a firm may decide against it. Because ERP outsourcing is still relatively new the outsourcing partner may not have enough expertise and experience in integrating with other applications in the organization or with external business partners. There are also a lot of hidden costs such as travel costs, monitoring costs, and the lost productivity and revenues if things do not go well with the system. Because these systems are mission critical, some firms may not like to give up control of their systems to an outside company and possibly lose crucial intellectual property.
Answer to Question 2
FALSE
Negative feedback as a mechanism by which homeostatic control systems operate.
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