Information Technology for Management Transforming Organizations in the Digital Economy, 7th Edition

Information Technology for Management Transforming Organizations in the Digital Economy, 7th Edition 9th Edition By Turban, Volonino, Wood

Chapter: Chapter 01: IT Support of Organizational Performance in a Turbulent Business Environments

Multiple Choice

1. A digital enterprise uses IT to accomplish any of the following objectives except: a) reach and engage customers more effectively b) increase employee productivity c) expand inventory supplies d) improve operating efficiency Ans: c Difficulty: Medium Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Critical thinking

2. The underlying infrastructure for digital enterprises and e-commerce is _________. a) intranets b) networked computing c) public networks d) wireless networks Ans: b Difficulty: Medium Section Ref: 1.1 Doing Business in the Digital Economy AACSB:

3. Which of the following is not an element of a business model? a) products or services b) business processes c) revenues or profitability d) online advertising Ans: d Difficulty: Medium Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Reflective thinking

4. The collection of computing systems used by an enterprise is broadly termed: a) information technology b) electronic commerce c) value-added network d) extranet Ans: a Difficulty: Easy Section Ref: 1.2 Information Systems and Information Technology AACSB:

5. Which of the following factors is not a major type of business pressure on enterprises? a) Homogenous workforce b) Powerful customers c) Regulatory compliance d) Terrorist attacks and homeland security Ans: a Difficulty: Easy Section Ref: 1.3 Business Performance Management, Business Pressures, Organization Responses, and IT Support AACSB: Critical thinking

6. __________ are intra-organizational Web-based networks that facilitate information access and collaboration. a) Extranets b) Intranets c) Virtual private networks d) EDI networks Ans: b Difficulty: Easy Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Use of information technology

7. Characteristics of a digital economy include all of the following except: a) widespread use of digitizable products like databases, news, information, books, and music CDs

b) a decrease in geographic boundaries c) elimination of all traditional intermediaries d) consumers and firms conducting financial transactions digitally Ans: c Difficulty: Easy Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Use of information technology

9. The digital economy has brought about __________ changes in most industries. a) marginal b) significant c) expected d) planned Ans: b Difficulty: Easy Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Reflective thinking

10. Scanners read wireless signals from items that have ___________ that are either attached or embedded in them. a) RFID tags b) EDI tags c) ATM chips d) XML tags Ans: a Difficulty: Easy Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Use of information technology

11. Which is not an advantage of the new economy’s way of doing business over the old way? a) lower cost b) greater speed c) IT-based competitive advantage d) less convenience Ans: d Difficulty: Easy

Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Critical thinking

12. Several banks in Japan issued __________ cards to customers. These cards store a template of the person’s palm vein to authenticate the customer’s identity when withdrawing money. a) smart b) RFID c) ATM d) adaptive Ans: a Difficulty: Medium Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Use of information technology

13. Jacobi Medical Center tracks the whereabouts of patients and links them to their medical records using ________ technology. a) smart b) RFID c) ATM d) adaptive Ans: b Difficulty: Medium Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Use of information technology

14. The business improvements in terms of cost, quality, speed, competitive advantage, and customer service brought about by the new way of doing business over the old one is in the magnitude of __________. a) 20 to 25 percent b) 60 to 75 percent c) about 100 percent d) several hundreds percent Ans: d Difficulty: Hard Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Reflective thinking

15. A(n) __________ is a method of doing business by which a company can generate revenue to sustain itself. a) adaptive strategy b) business model c) electronic commerce Web site d) operations model Ans: b Difficulty: Medium Section Ref: 1.1 Doing Business in the Digital Economy AACSB:

16. A(n) __________ is an analysis of the benefits of using a specific business model. a) core competency b) exchange c) RFQ d) value proposition Ans: d Difficulty: Hard Section Ref: 1.1 Doing Business in the Digital Economy AACSB:

17. Which of the following is true about electronic marketplaces (e-marketplaces)? a) They have existed in isolated applications since 2001. b) Fully computerized e-marketplaces were introduced in the early-2000s. c) They introduced operating efficiencies to trading for both buyers and sellers. d) Most e-marketplaces have not been profitable.

Ans: c Difficulty: Hard Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Critical thinking

18. IT facilitates and supports each of the following objectives except: a) reducing risk b) improving quality of service c) developing new strategic applications

d) minimizing collaboration Ans: d Difficulty: Medium Section Ref: 1.2 Information Systems and Information Technology (IT) AACSB: Reflective thinking

19. Which is not a characteristic of green IT? a) It is a growing movement that is driven primarily by pressure from customers who are demanding eco-friendly business practices. b) Many IT organizations are just starting to understand the influence that their IT purchase decisions have on power consumption. c) It focuses on reducing energy consumption, waste disposal, and polluting emissions. d) Data center servers need to be redesigned because they are both power-hungry and heatgenerating.

Ans: a Difficulty: Hard Section Ref: 1.3 Business Performance Management, Business Pressures, Organization Responses, and IT Support AACSB: Reflective thinking

20. Which is the first step in the process of managing business performance? a) Determine how to attain the performance levels. b) Assess where the organization stands with respect to its goals, objectives, and measures. c) Decide on desired performance levels. d) Set the budget for achieving performance or goals.

Ans: c Difficulty: Medium Section Ref: 1.3 Business Performance Management, Business Pressures, Organization Responses, and IT Support AACSB:

21. According to Porter’s competitive forces model, major forces in an industry that affect the degree of competition and ultimately profitability are all of the following except: a) Threat of entry of new competitors b) Competitive power of going green c) Bargaining power of suppliers and buyers d) Rivalry among existing firms in the industry

Ans: b Difficulty: Medium Section Ref: 1.4 Strategy for Competitive Advantage and IT Support AACSB:

22. ____________ is a technology for collecting and organizing vast amounts of data so they are easily accessible for analysis by managers and analysts. a) Business intelligence b) Electronic commerce c) HyperActive d) Open source Ans: a Difficulty: Medium Section Ref: 1.4 Strategy for Competitive Advantage and IT Support AACSB:

23. Blogs, mashups, instant messaging, and wikis are examples of a) avatars b) social computing c) virtual worlds d) wireless communications Ans: b Difficulty: Easy Section Ref: 1.5 Social Computing and Networking AACSB:

24. A(n) _________ is a computer-based simulated environment intended for its users to inhabit and virtual spaces interact via 2D or 3D representations. a) avatar b) social network c) virtual world d) presence exchange Ans: c Difficulty: Medium Section Ref: 1.5 Social Computing and Networking AACSB:

True/False

25. Digital enterprises view their critical information infrastructures as though they extend to their stationary and mobile employees, partners, and customers.

Ans: True Difficulty: Easy Section Ref: 1.1 Doing Business in the Digital Economy AACSB:

26. The digital enterprise shifts the focus from managing services and workflows to coaching individuals and optimizing IT resources.

Ans: False Difficulty: Easy Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Critical thinking

27. Some companies link their intranets to those of their business partners over networks called value-added networks (VANs).

Ans: False Difficulty: Medium Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Use of information technology

28. Netflix’s monthly subscription rental model had been so successful at increasing demand that Movielink and other film downloading businesses are not a significant competitive threat.

Ans: False Difficulty: Medium Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Critical thinking

29. Self-service kiosks in retail stores are based on RFID tags.

Ans: False Difficulty: Medium Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Use of information technology

30. Affiliate marketing is a method to generate additional revenues by placing a banner ad for marketing partners, such as Amazon.com, on their Web site and collecting commissions for sales made as a result of the ad.

Ans: True Difficulty: Medium Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Use of information technology

31. In order to succeed in our dynamic world, companies must take traditional actions, such as lowering costs, and also undertake innovative activities. These actions and activities are called critical response activities.

Ans: True Difficulty: Medium Section Ref: 1.3 Business Performance Management, Business Pressures, Organization Responses, and IT Support AACSB:

32. Most response activities to competitive pressures can be greatly facilitated by information technology.

Ans: True Difficulty: Medium Section Ref: 1.3 Business Performance Management, Business Pressures, Organization Responses, and IT Support AACSB: Use of information technology

33. Business environment pressures on businesses include regulatory compliance, social responsibility, ethical issues, and terrorist attacks.

Ans: True Difficulty: Medium Section Ref: 1.3 Business Performance Management, Business Pressures, Organization Responses, and IT Support AACSB: Ethical understanding and reasoning abilities\

34. Real-time information systems respond within a few seconds and are critical for all business applications.

Ans: False Difficulty: Easy Section Ref: 1.4 Strategy for Competitive Advantage and IT Support AACSB: Reflective thinking

Short Answer

35. A digital enterprise uses computer networks to electronically connect its internal parts via a(n) _________ .

Ans: intranet Difficulty: Easy Section Ref: 1.1 Doing Business in the Digital Economy AACSB:

36. A digital enterprise uses computer networks to electronically connect its business partners via the Internet, or via a secured Internet called a(n) _________ .

Ans: extranet Difficulty: Medium Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Use of information technology

37. The infrastructure for digital organizations and e-commerce is _________, which connects computers and other electronic devices via telecommunication networks.

Ans: networked computing Difficulty: Hard Section Ref: 1.1 Doing Business in the Digital Economy AACSB:

38. A _________ is a method of doing business by which a company can generate revenue to sustain itself.

Ans: business model Difficulty: Medium Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Use of information technology

39. _________ is an arrangement in which marketing partners place a banner ad for a company, such as Amazon.com, on their Web site.

Ans: Affiliate marketing Difficulty: Hard Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Use of information technology

40. _________ relates to standards of right and wrong in information management practices.

Ans: information ethics Difficulty: Medium Section Ref: 1.3 Business Performance Management, Business Pressures, Organization Responses, and IT Support AACSB: Ethical and legal responsibilities in organizations and society

41. Passed in the wake of the Enron and WorldCom accounting scandals, the _________ Act stipulates procedures for improving corporate reporting, such as requiring CEOs to certify the accuracy of financial statements.

Ans: Sarbanes-Oxley Difficulty: Hard Section Ref: 1.3 Business Performance Management, Business Pressures, Organization Responses, and IT Support AACSB: Ethical and legal responsibilities in organizations and society

42. The _________ enterprise can respond properly and in a timely manner to changes in the business environment.

Ans: adaptive Difficulty: Easy Section Ref: 1.4 Strategy for Competitive Advantage and IT Support AACSB:

43. A(n) _________ is an information system that provides fast enough access to information or data so that an appropriate decision can be made.

Ans: real-time system Difficulty: Easy Section Ref: 1.4 Strategy for Competitive Advantage and IT Support AACSB: Use of information technology

44. A(n) _________ strategy is risky, but can be very rewarding for companies if successful.

Ans: first mover Difficulty: Medium Section Ref: 1.4 Strategy for Competitive Advantage and IT Support AACSB:

45. A(n) _________ is a Web site where people write blogs and wikis, post pictures, video or music; share ideas, and link to other Web locations they find interesting.

Ans: social network Difficulty: Easy Section Ref: 1.5 Social Computing and Networking AACSB:

46. _________ is the world’s most popular social networking Web site.

Ans: MySpace Difficulty: Medium

Section Ref: 1.5 Social Computing and Networking AACSB:

47. In August 2006, _________ paid $900 million for placing its search and advertising on MySpace pages.

Ans: Google Difficulty: Easy Section Ref: 1.5 Social Computing and Networking AACSB:

Essay

48. Identify and briefly describe three of the major IT characteristics of the Digital Economy.

Ans: See Table 1.1.

Globalization: Global communication and collaboration; global electronic marketplaces. Global customers, suppliers, and partners.

Digital systems: From TV to telephones and instrumentation, analog systems are being converted to digital ones.

Speed: A move to real-time transactions, thanks to digitized documents, products, and services.

Many business processes are expedited by 90 percent or more.

Information overload: Although the amount of information generated is accelerating, intelligent search tools can help users find what they need.

Markets: Markets are moving online. Physical marketplaces are being replaced by electronic markets; new markets are being created, increasing competition and market efficiency.

Digitization: Music, books, pictures, movies, and more are digitized for fast and inexpensive distribution.

Business models: New and improved business models and processes provide opportunities to new companies and processes and industries.

Innovation: Digital and Internet-based innovations continue at a rapid pace. More patents are being granted than ever before.

Obsolescence: The fast pace of innovations creates a high rate of obsolescence.

Opportunities: Opportunities abound in almost all aspects of life and business.

Fraud: Criminals employ a slew of innovative schemes on the Internet. Cybercons are everywhere.

Wars: Conventional wars are changing to cyberwars.

Difficulty: Medium Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Critical thinking

49. Describe the basic infrastructure for digital organizations and electronic commerce (EC).

Ans: The infrastructure for digital organizations and EC is networked computing (also known as distributed computing), which connects computers and other electronic devices via telecom networks. Such connections allow users to access information stored in many places and to communicate and collaborate with others. Computers are connected to the the Internet, to private value-added networks (VANs), or to the organization’s intranet. In addition, some companies link their intranets to those of their business partners over networks called extranets. Connection are done via wireline systems or wireless systems.

Difficulty: Hard Section Ref: 1.1 Doing Business in the Digital Economy AACSB: Use of information technology

50. Discuss how ethical issues create pressures or constraints on organizational operations and the use of IT. Ans: Ethical issues may create pressures or at least constraints on the operations of an organization. Ethics relates to standards of right and wrong, and information ethics relates to standards of right and wrong in information processing practices. Organizations must deal with ethical issues relating to their employees, customers, and suppliers. Ethical issues are very important since they have the power to damage the image of an organization and to destroy the morale of the employees. Ethics is a difficult area because ethical issues are somewhat subjective and depend on the culture.

The use of IT raises many ethical issues. These issues range from the monitoring of e-mail to the invasion of customers’ privacy whose data are stored in private and public databases.

Difficulty: Medium Section Ref: 1.3 Business Performance Management, Business Pressures, Organization Responses, and IT Support AACSB: Ethical and legal responsibilities in organizations and society

Chapter: Chapter 02: Information Technologies: Concepts, Types, and IT Support

Multiple Choice

1. Mary Kay transformed itself from traditional modes of operation to a business model that enabled rapid growth into new markets by doing all of the following except: a) networking various applications so they communicate with each other b) using business service management to connect to consultants. c) using social computing for marketing d) outsourcing its IT infrastructure Ans: d Difficulty: Medium Section Ref: Introduction AACSB: Use of information technology

2. A(n) ___________ is a computer program designed to support a specific task or a business process, such as processing the payroll. a) application program b) database program c) file system d) operating system Ans: a Difficulty: Easy Section Ref: 2.1 Information Systems: Concepts and Definitions AACSB:

3. ____________ consists of stored numeric, alphanumeric, figures, sounds, or images organized for retrieval. a) Data b) A database c) Information d) Knowledge Ans: b Difficulty: Easy Section Ref: 2.1 Information Systems: Concepts and Definitions

AACSB:

4. ________ refers to a basic description of things, events, activities, and transactions that are recorded, classified, and stored, but not organized. a) Data b) Database c) Information d) Knowledge Ans: a Difficulty: Easy Section Ref: 2.1 Information Systems: Concepts and Definitions AACSB:

5. A student’s grade point average is an example of ___________ . a) data b) a database c) information d) knowledge Ans: c Difficulty: Medium Section Ref: 2.1 Information Systems: Concepts and Definitions AACSB:

6. An employee’s performance rating in comparison with the performance ratings of other employees is an example of ____________ . a) Data b) Database c) Information d) Knowledge Ans: d Difficulty: Medium Section Ref: 2.1 Information Systems: Concepts and Definitions AACSB: Critical thinking

7. ___________ support functional managers by providing them with periodic reports, such as weekly sales volume and comparisons of actual expenses to budgeted expenses. a) Personal information managements b) Transaction processing systems c) Management information systems d) Enterprise systems Ans: c Difficulty: Medium Section Ref: 2.2 Classification and Types of Information Systems AACSB:

8. _____________ are critical to an enterprise because they support core operations, such as order processing, billing, payroll, and shipping. a) Personal information managements b) Transaction processing systems c) Management information systems d) Enterprise systems Ans: b Difficulty: Medium Section Ref: 2.2 Classification and Types of Information Systems AACSB: Use of information technology

9. Business processes that involve taking orders from customers and fulfilling them after buying materials from a supplier are supported by which type of information system? a) Personal information management b) Transaction processing system c) Management information system d) Enterprise system Ans: c Difficulty: Medium Section Ref: 2.2 Classification and Types of Information Systems AACSB: Use of information technology

10. ____________ deal in general with middle-management activities such as short-term planning, organizing, and control and may involve BI systems with reporting and query capabilities. a) Operational activities

b) Managerial activities c) Strategic activities d) Supply chain activities Ans: b Difficulty: Medium Section Ref: 2.3 How IT Supports People AACSB: Critical thinking

11. ____________ are short-term activities mainly supported by TPSs, MISs, and mobile systems. a) Operational activities b) Managerial activities c) Strategic activities d) Supply chain activities Ans: a Difficulty: Medium Section Ref: 2.3 How IT Supports People AACSB:

12. Major support for executives and managers is derived from ________. a) System development b) Data management c) Managing security and risk d) Business intelligence Ans: d Difficulty: Hard Section Ref: 2.3 How IT Supports People AACSB: Use of information technology

13. Many professional workers are classified as ___________ because they create information and knowledge as part of their work and integrate it into the business. a) data workers b) information workers c) knowledge workers d) digital workers Ans: c

Difficulty: Medium Section Ref: 2.3 How IT Supports People AACSB:

14. The main support provided by IT for the __________ is to improve procurement activities and relationships with suppliers. a) downstream supply chain b) industry supply chain c) interorganizational supply chain d) upstream supply chain Ans: d Difficulty: Medium Section Ref: 2.4 How IT Supports Supply Chains and Business Processes AACSB:

15. What type of software helps in managing both the internal and external relationships with business partners? a) enterprise resource planning b) industry-specific systems c) transaction processing systems d) data systems Ans: a Difficulty: Hard Section Ref: 2.4 How IT Supports Supply Chains and Business Processes AACSB:

16. _________ software helps in decision making related both to internal segments and to relationships with external segments. a) CRM b) MIS c) SCM d) TPS Ans: c Difficulty: Medium Section Ref: 2.4 How IT Supports Supply Chains and Business Processes AACSB:

17. Which of the following is not a major component of an enterprise’s information infrastructure? a) physical facilities b) the Internet c) operation, and documentation services d) management of shared computing resources Ans: b Difficulty: Easy Section Ref: 2.5 Information Systems Infrastructure, Architecture, and Emerging Computing Environments AACSB:

18. Which of the following is not true of SaaS (software-as-a-service)? a) It is on-demand computing. b) Users can access applications over a network, with an Internet browser being the only necessity. c) It has become the way all software is sold, delivered and used. d) It enables companies to meet fluctuating demands on IT resources efficiently.

Ans: c Difficulty: Medium Section Ref: 2.5 Information Systems Infrastructure, Architecture, and Emerging Computing Environments AACSB:

19. The concept of grid computing takes advantage of: a) unused processing capabilities of all computers in a network. b) ever-increasing traffic of Web servers. c) application software providers. d) wireless infrastructure.

Ans: a Difficulty: Medium Section Ref: 2.5 Information Systems Infrastructure, Architecture, and Emerging Computing Environments AACSB:

20. All of the following describe hardware virtualization except: a) It combines the available resources in a network by splitting the network load into manageable parts. b) It allows a piece of hardware to run multiple operating system images at once. c) It is the use of software to emulate hardware or a total computer environment other than the one the software is actually running in. d) It is also known as a virtual machine.

Ans: a Difficulty: Medium Section Ref: 2.5 Information Systems Infrastructure, Architecture, and Emerging Computing Environments AACSB:

21. ______________ tools help determine the probable future outcome for an event or the likelihood of a situation occurring. a) Intelligent control b) Grid computing c) Predictive analysis d) Pervasive computing Ans: c Difficulty: Medium Section Ref: 2.6 Innovative and Futuristic Information Systems AACSB:

True/False

22. Information systems can be organized according to organizational hierarchy (e.g., departmental, enterprisewide, and interorganizational) or by the nature of supported task (e.g., operational, managerial, and strategic).

Ans: True Difficulty: Medium Section Ref: 2.2 Classification and Types of Information Systems AACSB:

23. The data collected in a TPS provides the input data for other support systems.

Ans: True Difficulty: Easy Section Ref: 2.2 Classification and Types of Information Systems AACSB:

24. TPS and POS are the main IT support systems.

Ans: False Difficulty: Easy Section Ref: 2.2 Classification and Types of Information Systems AACSB: Use of information technology

25. Managerial activities, decisions, and the information systems that support them can be classified as operational, tactical, and strategic.

Ans: True Difficulty: Medium Section Ref: 2.2 Classification and Types of Information Systems AACSB: Use of information technology

26. The intranet refers to the shared information resources (such as corporate networks, databases) and their linkages, operation, maintenance, and management.

Ans: False Difficulty: Medium Section Ref: 2.2 Classification and Types of Information Systems AACSB: Use of information technology

27. Transaction processing systems are critical because they support business operations, such as purchasing of materials, billing customers, payroll, and shipping.

Ans: True Difficulty: Easy Section Ref: 2.2 Classification and Types of Information Systems AACSB: Use of information technology

28. The U.S. Army uses video games, virtual worlds, and avatars to teach soldiers negotiation skills and cultural awareness for combat environments at lower costs than with manual training.

Ans: True Difficulty: Medium Section Ref: 2.2 Classification and Types of Information Systems AACSB: Use of information technology

29. Business analytics are visual presentations of critical data; and a major component in business intelligence (BI).

Ans: False Difficulty: Medium Section Ref: 2.2 Classification and Types of Information Systems AACSB:

30. The software-as-a-service (SaaS) approach is based on the trend for developing applications in-house rather than buying them.

Ans: False Difficulty: Medium Section Ref: 2.5 Information Systems Infrastructure, Architecture, and Emerging Computing Environments AACSB:

31. Service-oriented architecture (SOA) refers to architecture that assembles small information systems, one for each business service, to create new applications, usually by using Web Services technology.

Ans: True Difficulty: Hard Section Ref: 2.5 Information Systems Infrastructure, Architecture, and Emerging Computing Environments AACSB: Use of information technology

32. A supply chain is the flow of materials, information, money, and services from raw material suppliers through factories and warehouses to the end customers.

Ans: True Difficulty: Medium Section Ref: 2.4 How IT Supports Supply Chains and Business Processes AACSB: Use of information technology

33. Radio frequency identification (RFID) is wireless technology that uses bar codes to uniquely identify objects.

Ans: False Difficulty: Medium Section Ref: 2.4 How IT Supports Supply Chains and Business Processes AA CSB: Use of information technology

34. The upstream part of the supply chain includes all the activities involved in delivering the products to the final customers.

Ans: False Difficulty: Medium Section Ref: 2.4 How IT Supports Supply Chains and Business Processes AACSB: Use of information technology

Short Answer

35. __________ are small systems or tools, such as PDAs, designed to increase the productivity of individuals.

Ans: Personal information management Difficulty: Easy Section Ref: 2.2 Classification and Types of Information Systems AACSB: Use of information technology

36. A(n) _________is a collection of activities performed to accomplish a clearly defined goal.

Ans: business process Difficulty: Medium

Section Ref: 2.2 Classification and Types of Information Systems AACSB:

37. Interorganizational information systems that connect companies located in two or more countries are referred to as _________ systems.

Ans: global information Difficulty: Medium Section Ref: 2.2 Classification and Types of Information Systems AACSB: Use of information technology

38. Among clerical workers, those who use, manipulate, or disseminate information are referred to as _________ .

Ans: data workers Difficulty: Easy Section Ref: 2.3 How IT Supports People AACSB:

39. _________ is a high-level plan of an enterprise’s information assets, including the physical design of the building that holds the hardware.

Ans: Information technology architecture Difficulty: Hard Section Ref: 2.5 Information Systems Infrastructure, Architecture, and Emerging Computing Environments AACSB:

40. An __________ is a network of interactions and relationships over which information, products, services, and payments are exchanged.

Ans: electronic market Difficulty: Medium Section Ref: 2.5 Information Systems Infrastructure, Architecture, and Emerging Computing Environments AACSB:

41. An increasingly popular enterprise model in which computing resources are made available to the user when the resources are needed is the _______________ model.

Ans: Software-as-a-Service (SaaS) Difficulty: Hard Section Ref: 2.5 Information Systems Infrastructure, Architecture, and Emerging Computing Environments AACSB: Use of information technology

42. _________ is computing that is as available, reliable, and secure as electricity, water, and telephony.

Ans: Utility computing Difficulty: Easy Section Ref: 2.5 Information Systems Infrastructure, Architecture, and Emerging Computing Environments AACSB:

43. Networks can be used to support _________ , in which the unused processing cycles of computers in a given network are harnessed to create powerful computing capabilities.

Ans: grid computing Difficulty: Medium Section Ref: 2.5 Information Systems Infrastructure, Architecture, and Emerging Computing Environments AACSB: Use of information technology

44. _________ commerce refers to the buying and selling of goods and services in a wireless environment, such as through cellular telephones and PDAs. Ans: Mobile Difficulty: Easy Section Ref: 2.5 Information Systems Infrastructure, Architecture, and Emerging Computing Environments AACSB: Use of information technology

45. The basic idea of _________ is to reuse and reconnect existing IT assets or services rather

than more time consuming and costly development of new systems.

Ans: SOA Difficulty: Medium Section Ref: 2.5 Information Systems Infrastructure, Architecture, and Emerging Computing Environments AACSB: Use of information technology

46. _________ are self-contained, self-describing modular applications delivered over the Internet, that enable users to share data and services.

Ans: Web services Difficulty: Medium Section Ref: 2.5 Information Systems Infrastructure, Architecture, and Emerging Computing Environments AACSB: Use of information technology

47. _________ increases the flexibility of IT assets by enabling companies to pool resources such as networks and hardware.

Ans: Virtualization Difficulty: Medium Section Ref: 2.5 Information Systems Infrastructure, Architecture, and Emerging Computing Environments AACSB: Use of information technology

Essay

48. Describe an information infrastructure and list the five major components of the infrastructure.

Ans: An information infrastructure consists of the physical facilities, services, and management that support all shared computing resources in an organization.

The five major components of the infrastructure are: (1) computer hardware, (2) software, (3) networks and communication facilities, (4) databases and data workers, and (5) information management personnel.

Difficulty: Medium

Section Ref: 2.5 Information Systems Infrastructure, Architecture, and Emerging Computing Environments AACSB: Use of information technology

49. Identify three major managerial activities that are supported or enabled by IT. Ans: Three of the major IT-supported managerial activities are (1) improving supply chain operations, (2) integrating departmental systems with ERP, and (3) introducing a variety of customer relationship management activities. IT is a major enabler of all of these.

Difficulty: Medium Section Ref: 2.2 Classification and Types of Information Systems AACSB: Use of information technology

50. Explain Web-based systems and list three examples.

Ans: Web-based systems refer to those applications or services that reside on a server that is accessible using a Web browser and work with Internet protocols. Some examples are eprocurement, corporate portals, electronic markets and exchanges, and mobile commerce.

Difficulty: Medium Section Ref: 2.5 Information Systems Infrastructure, Architecture, and Emerging Computing Environments AACSB: Use of information technology

Chapter: Chapter 03: Managing Data to Improve Business Performance

Multiple Choice

1. To provide managers with detailed near real-time customer and operational data, Applebee’s implemented a(n): a) document management system b) enterprise data warehouse c) local area network d) transaction processing system Ans: b Difficulty: Medium Section Ref: Introduction AACSB:

2. How does data management help to improve the productivity of managers and other knowledge workers? a) By insuring that people can find what they need without having to conduct a long and difficult search. b) By providing a central repository for customer and operational data. c) By capturing real-time data and distributing it via corporate intranets and mobile devices. d) By capturing and aggregating point-of-sale (POS) data.

Ans: a Difficulty: Hard Section Ref: 3.1 Data, Master Data, and Document Management AACSB: Reflective thinking

3. A(n) ________ is a specialized type of ________ that aggregates data from various sources. a) data mart; document warehouse b) information system; data mart c) data repository; information asset d) data warehouse; database Ans: d Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management

AACSB:

4. Which of the following statements about data quality is not correct? a) Managing data quality is vital to organizations because corporate data are informational assets. b) It is an easy and simple task to manage, search, and retrieve data located throughout the organization. c) Dirty data can result in poor business decisions, poor customer service, and inadequate product design. d) Data management provides the infrastructure to transform raw data into information of the highest quality.

Ans: b Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management AACSB: Reflective thinking

5. Reasons why managers may not be able to trust their data include all of the following except: a) Data are too synchronized. b) Data are out of context. c) Data are outdated. d) Data are so overwhelming that they require weeks to analyze.

Ans: a Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management AACSB: Reflective thinking

6. Characteristics of data management include all of the following except: a) Data management is a structured approach for capturing, storing, processing, integrating, distributing, securing, and archiving data effectively throughout their life cycle. b) Data management investments involve tough tradeoffs among many factors, especially in prosperous economic times. c) Companies invest in data management technologies to increase revenues or cut expenses. d) Data management reduces uncertainty, which can reduce errors costing millions of dollars annually.

Ans: b Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management AACSB: Reflective thinking

7. According to the principle of 90/90 data use: a) a majority of data lose much of their value after three months and then are seldom accessed. b) 90 percent of data cannot be easily accessed and used after 90 days because of archiving. c) knowledge workers analyze 90 percent of their data within three months d) only 90 percent of structured data and 90 percent of unstructured data get used.

Ans: a Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

8. A classic expression that summarizes the risks associated with the collection and use of poor quality data is: a) information in, nothing out b) data in, confusion out c) easy in, easy out d) garbage in, garbage out Ans: d Difficulty: Easy Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

9. Businesses employ data visualization and decision support tools to: a) summarize raw data and present it graphically to managers. b) generate and distribute reports via networks to everyone throughout the enterprise. c) present data in graphical or tabular formats to make it easier for users to understand. d) develop complex decision models for use by analysts.

Ans: c Difficulty: Hard Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

10. According to the market intelligence firm IDC, organizations with a 1,000 or more knowledge workers lose over $5 million annually because of: a) time wasted by employees reformatting data as they move among applications.

b) data that is out of context or outdated. c) the inability of knowledge workers to share data with others working on the same project. d) the inability to synchronize data.

Ans: a Difficulty: Hard Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

11. Which of the following is not a dimension of data quality? a) accuracy b) accessibility c) security d) timeliness Ans: c Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

12. Which of the following is not accurate regarding businesses that collect data about employees or customers? a) The data must be available to auditors. b) Businesses have a legal duty to protect this data. c) The data should be accessible only to authorized people. d) Securing the data from abuse by authorized parties is expensive and difficult.

Ans: a Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management AACSB: Ethical and legal responsibilities in organizations and society

13. Document management is the automated control of imaged and electronic documents, page images, spreadsheets, voice and e-mail messages, word processing documents, and other documents through their life cycle that extends from initial creation to ________. a) storage and backup in a database b) final archiving or destruction c) encryption and storage d) it is no longer of business value

Ans: b Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

14. Data privacy and ethics issues include all of the following except: a) Concern about customer and employee privacy protection. b) Restricting data access to authorized people for authorized purposes only. c) Sharing data across departments to support CRM. d) Cost of providing information required by the U.S. Department of Homeland Security and other government agencies.

Ans: c Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management AACSB: Ethical and legal responsibilities in organizations and society

15. Which of the following statements about national security, security threats, and security tactics is false? a) Data collection by the Defense Intelligence Staff are conducted to avoid infringing on personal privacy. b) Those driven by ideological or political motives and the intent to do harm use the Internet to plan and coordinate their activities. c) Terrorists’ tactics and technologies used to carry out destructive plans include hacking, spamming, phishing, identity theft, and Web site propaganda and recruitment. d) National security depends on timely intelligence efforts for early detection and deterrence of these activities.

Ans: a Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management AACSB: Ethical and legal responsibilities in organizations and society

16. Which of the following correctly describes a way in which data records are stored and accessed on a storage medium? a) In direct file organization, records are retrieved in the same physical order in which they are stored. b) In sequential file organization, records can be accessed directly regardless of their storage location.

c) In indexed sequential access method (ISAM), an index of key fields is used to locate individual records d) In relational file organization, records are retrieved based on the primary key.

Ans: c Difficulty: Hard Section Ref: 3.2 File Management Systems AACSB:

17. What is the cornerstone of effective decision making? a) data quality b) data mining c) customer data d) market data Ans: a Difficulty: Medium Section Ref: 3.2 File Management Systems AACSB: Reflective thinking

18. Every record in a file should contain at least one field that uniquely identifies that record so that the record can be retrieved, updated, and sorted. This identifier field is called the___________ . a) attribute b) foreign key c) primary key d) secondary key Ans: c Difficulty: Medium Section Ref: 3.2 File Management Systems AACSB:

19. In ________ file organization, users can retrieve records in any sequence, without regard to actual physical order on the storage medium. a) direct b) indexed sequential c) sequential d) primary key

Ans: a Difficulty: Medium Section Ref: 3.2 File Management Systems AACSB: Use of Information Technology

20. An enterprise develops one IS application at a time without overall planning and those applications require their own data. What is the expected outcome of this IS development approach? a) Data problems of redundancy and inconsistency. b) Improved data quality, management and analysis in each department. c) Widespread sharing of data across departments. d) Inability to store data in a data warehouse.

Ans: a Difficulty: Medium Section Ref: 3.2 File Management Systems AACSB: Reflective thinking

21. Which of the following is not an advantage of a database management system? a) Query ability b) Cost c) Security d) Access logging Ans: b Difficulty: Easy Section Ref: 3.3 Databases and Database Management Systems AACSB:

22. A(n) ________ acts as an interface between application programs and physical data files. a) database management system b) file management system c) primary field d) foreign key Ans: a Difficulty: Medium Section Ref: 3.3 Databases and Database Management Systems AACSB:

23. In a DBMS, _______ offers the ability to perform complicated searches with relatively simple statements. a) metadata b) DML c) SQL d) schema Ans: c Difficulty: Medium Section Ref: 3.3 Databases and Database Management Systems AACSB: Use of Information Technology

24. Many companies have implemented ____________ to enable managers and knowledge workers to leverage data from across the enterprise, thereby helping them make the smartest decisions. a) data warehousing b) database management systems c) data modeling d) metadata Ans: a Difficulty: Easy Section Ref: 3.4 Data Warehouses, Data Marts, and Data Centers AACSB:

25. Potential benefits achieved by consolidating data marts into an enterprise data warehouse include all of the following except: a) Better business decisions b) Better collaboration with business partners c) Easier to meet regulatory compliance requirements d) Supports going green initiatives such as reduced energy consumption Ans: b Difficulty: Medium Section Ref: 3.4 Data Warehouses, Data Marts, and Data Centers AACSB:

26. All of the following are true about data centers except:

a) Data centers are facilities containing mission-critical ISs and components that deliver data and IT services to the enterprise. b) Data centers integrate networks, computer systems, and storage devices. c) Many companies are building or reconfiguring their data centers to save money. d) The newest data centers are small with limited critical capabilities to reduce energy and disaster recovery costs.

Ans: d Difficulty: Hard Section Ref: 3.4 Data Warehouses, Data Marts, and Data Centers AACSB:

27. ________ is an important data management technology, and includes electronic document management, Web content management, and electronic records management. a) Information infrastructure b) Digital asset management c) Enterprise content management d) Data warehousing Ans: c Difficulty: Medium Section Ref: 3.5 Enterprise Content Management AACSB:

28. Key forces that are driving organizations to adopt a strategic, enterprise-level approach to planning and deploying content systems include all of the following except: a) the need to integrate content within business processes b) the slowed growth of content generated by organization c) the need to support sophisticated user access and interaction d) the need to maintain governance and control over content to ensure regulatory compliance and preparedness for legal discover Ans: b Difficulty: Medium Section Ref: 3.5 Enterprise Content Management AACSB:

29. Materials that are no longer needed for operations or decisions are: a) archived b) destroyed

c) encrypted d) backed-up Ans: a Difficulty: Medium Section Ref: 3.5 Enterprise Content Management AACSB:

30. All of the following are characteristics of enterprise records management (ERM) except: a) ERM requires the involvement of records managers, IT personnel and administrators to establish ERM policies b) ERM policies include schedules for retaining and destroying records that comply with state and federal regulations. c) ERM involves the organization of data so that it can be accurately and easily retrieved. d) Creating backups are a form of ERM. Ans: d Difficulty: Medium Section Ref: 3.5 Enterprise Content Management AACSB:

True/False

31. Data infrastructure refers to the fundamental structure of an information system, which determines how it functions and how flexible it is to meet future data requirements.

Ans: True Difficulty: Easy Section Ref: Introduction AACSB: Critical thinking

32. Data management is one of the most difficult challenges facing today's organizations.

Ans: True Difficulty: Easy Section Ref: 3.1 Data, Master Data, and Document Management AACSB: Use of Information Technology

33. Data warehouses have eliminated uncertainty and data errors, which had been a constraint on managers.

Ans: False Difficulty: Easy Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

34. Data management decisions require tough tradeoffs among many complex factors; especially in recessionary times when cost-cutting is a powerful force..

Ans: True Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management AACSB: Use of Information Technology

35. Data or information visualization refers to presenting data in tables and structuring it for thorough analysis.

Ans: False Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

36. When data are in several sources and in different formats, it is difficult to manage and integrate them. Master data management is a process that overcomes this limitation and provides a more unified view of data.

Ans: True Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management AACSB: Use of Information Technology

37. Green computing is an initiative to conserve natural resources by reducing the number of computers and servers used by enterprises worldwide.

Ans: False Difficulty: Easy Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

38. A computer system essentially organizes data into a hierarchy that begins with bits and proceeds to bytes, fields, files, databases, and records.

Ans: False Difficulty: Medium Section Ref: 3.2 File Management Systems AACSB:

39. In a customer database, customers’ last names are typically used as the primary key.

Ans: False Difficulty: Medium Section Ref: 3.2 File Management Systems AACSB: Reflective thinking

40. Data redundancy wastes physical storage media, makes it difficult to obtain a comprehensive view of customers, and increases the costs of entering and maintaining the data.

Ans: True Difficulty: Medium Section Ref: 3.2 File Management Systems AACSB: Reflective thinking

41. Data isolation means that the actual data values are not synchronized across various copies of the data.

Ans: False Difficulty: Hard Section Ref: 3.2 File Management Systems AACSB: Reflective thinking

42. Databases are the optimal way to store and access organizational data.

Ans: True Difficulty: Easy Section Ref: 3.3 Databases and Database Management Systems AACSB:

43. A replicated database is a type of distributed database that stores complete copies of the entire database in multiple locations. This arrangement provides a backup in case of a failure or problems with the centralized database.

Ans: True Difficulty: Medium Section Ref: 3.3 Databases and Database Management Systems AACSB:

44. A DBMS has a single physical view, and two logical views of the data.

Ans: False Difficulty: Medium Section Ref: 3.3 Databases and Database Management Systems AACSB:

45. Databases are online transaction processing (OLTP) systems and are volatile because they record every transaction.

Ans: True Difficulty: Hard Section Ref: 3.4 Data Warehouses, Data Marts, and Data Centers AACSB:

46. Data warehouses are designed as online analytical processing (OLAP) systems, meaning that the data can be queried and analyzed much more efficiently than application databases.

Ans: True Difficulty: Hard Section Ref: 3.4 Data Warehouses, Data Marts, and Data Centers AACSB:

47. Before considering building a data warehouse, it is critical to be sure that top management and users support the data warehouse.

Ans: True Difficulty: Medium Section Ref: 3.4 Data Warehouses, Data Marts, and Data Centers AACSB:

48. Data warehouse content can be delivered to decision makers throughout the enterprise via an intranet. This is an extremely expensive method of delivering data, but the advantage is that users can view, query, and analyze the data and produce reports using Web browsers from any location.

Ans: False Difficulty: Medium Section Ref: 3.4 Data Warehouses, Data Marts, and Data Centers AACSB:

49. Companies may create a scaled-down version of a data warehouse, called a data mart, because data marts are significantly lower cost and require significantly shorter lead times for implementation, often less than 90 days.

Ans: True Difficulty: Medium Section Ref: 3.4 Data Warehouses, Data Marts, and Data Centers AACSB:

50. Records are different from documents in that they cannot be modified or deleted except in controlled circumstances. In contrast, documents generally are subject to revision.

Ans: True Difficulty: Easy Section Ref: 3.5 Enterprise Content Management AACSB: Use of Information Technology

Short Answer

51. The goal of ________ is to provide the infrastructure and tools to transform raw data into usable corporate information of the highest quality.

Ans: data management Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

52. ________ result in poor business decisions, poor customer service, inadequate product design, and other wasteful situations.

Ans: Dirty data Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

53. ________ are a set of software applications that consolidate, manage, analyze, and transmit data to users through a standardized Web-based interface Ans: Enterprise portals Difficulty: Hard Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

54. ________ networks consist of user PCs that are linked to high-performance computers and that provide software, data, or computing services over a network.

Ans: Client/server Difficulty: Hard Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

55. ________ is a process whereby companies integrate data from various sources or enterprise applications to provide a more unified view of the data.

Ans: Master data management Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

56. A(n) ________ is anything real or abstract about which a company wants to collect and store data, such as customer, vendor, product, or employee.

Ans: data entity Difficulty: Hard Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

57. A(n) ________ is a small data warehouse designed for a strategic business unit (SBU) or a single department.

Ans: data mart Difficulty: Easy Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

58. ________ is a measure of data’s usefulness, which depends on its accuracy, completeness, and timeliness.

Ans: Data quality Difficulty: Easy Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

59. ________ is an initiative to conserve our valuable natural resources by reducing the effects of our computer usage on the environment.

Ans: Green computing Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management AACSB:

60. ________ are non-unique fields in a database that have some identifying information, such as geographic region or occupation.

Ans: Secondary keys Difficulty: Hard Section Ref: 3.2 File Management Systems AACSB:

61. ________ are keys whose purpose is to link two or more tables together in a database.

Ans: Foreign keys Difficulty: Medium Section Ref: 3.2 File Management Systems AACSB:

62. A logical group of related fields, such as customer name, product sold, or hours worked, is examples of a(n) _________ .

Ans: record Difficulty: Medium Section Ref: 3.2 File Management Systems AACSB: Use of Information Technology

63. The program that manages data and provides access to the database is called a(n) ________.

Ans: database management system Difficulty: Easy Section Ref: 3.3 Databases and Database Management Systems AACSB: Use of Information Technology

64. A(n) ________ is a database for transaction processing systems that uses data warehouse concepts to provide clean data Ans: operational data store Difficulty: Hard Section Ref: 3.4 Data Warehouses, Data Marts, and Data Centers

AACSB: Use of Information Technology

65. ________ integrate networks, computer systems, and storage devices so they need to insure power availability and provide physical and data security.

Ans: Data centers Difficulty: Medium Section Ref: 3.4 Data Warehouses, Data Marts, and Data Centers AACSB: Use of Information Technology

Essay

66. What is a document management system (DMS)? List three ways a DMS can help a business become more efficient and productive.

Ans: DMS consist of hardware and software that manage, store, and archive electronic documents and that convert paper documents into e-documents. A DMS can help a business to become more efficient and productive by: Enabling the company to access and use the content in contained in the documents.

Cutting labor costs by automating business processes.

Reducing the time and effort required to locate information the business needs to support decision making.

Improving the security of the content, thereby reducing the risk of intellectual property theft.

Minimizing the costs associated with printing, storage, and searching for content.

Difficulty: Medium Section Ref: 3.1 Data, Master Data, and Document Management AACSB: Use of Information Technology

67. Identify three benefits of using a database management systems (DBMS).

Ans: The benefits of using a DBMS include: improved strategic use of corporate data, reduced complexity of the data environment, reduced data redundancy and enhanced data integrity, improved security, reduced data maintenance costs, and better access to data.

Difficulty: Easy Section Ref: 3.3 Databases and Database Management Systems AACSB: Use of Information Technology

68. How does consolidating data marts into an enterprise data warehouse (EDW) help a company to meet its compliance requirements and a going green initiative?

Ans: Compliance. Storing integrated data in an EDW makes it easier for the company to control which people can access and use sensitive financial data. In addition, an EDW can help a company meet regulatory compliance requirements by providing increased accuracy in reporting financial results, data security, encryption of sensitive data, and disaster recovery planning.

Going green. Maintaining separate data marts impacts the environment. Consolidating powerhungry servers, which are often underutilized, reduces both electricity consumption and the amount of heat produced, which in turn reduces the amount of energy required for cooling the equipment.

Difficulty: Hard Section Ref: 3.4 Data Warehouses, Data Marts, and Data Centers AACSB: Use of Information Technology

Chapter: Chapter 04: Networks and Collaboration As Business Solutions

Multiple Choice

1. Key benefits of the collaboration tools used by the Jacksonville Sheriff’s Office during Super Bowl XXXIX were all of the following except: a) Decentralized command functions b) Real-time communication and collaboration c) Optimized situational awareness d) Deployment with minimal training Ans: a Difficulty: Medium Section Ref: Introduction AACSB: Use of Information Technology 2. Productivity in an enterprise can be measured in terms of: a) the amount of input per amount of time b) the ratio of the amount of output to the amount of input c) the number of units produced d) market share Ans: b Difficulty: Hard Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB:

3. Feature-rich network devices and technologies that make collaboration easier and more productive include all of the following except: a) iPhones b) PDAs c) RFID d) CRM Ans: d Difficulty: Easy Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB:

4. ________ is the sending of messages up to 140 characters. a) Tweet b) Downlinking c) Micro-blogging d) Texting Ans: c Difficulty: Medium Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB:

5. What is significant about 4G networks? a) 4G has a circuit switched subsystem b) 4G is based purely on the Internet Protocol (IP) c) 4G is the convergence of the features of 2G and 3G d) All of the above Ans: b Difficulty: Hard Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB:

6. Which is not a fourth generation (4G) mobile network standard? a) WiMax b) WiBro c) UMTS LTE d) EDGE Ans: d Difficulty: Medium Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB:

7. Voice, data, video, and radio waves can all be sent over an IP network by digitizing the content into: a) packets b) tweets c) micro-blogs d) tri-bands

Ans: a Difficulty: Medium Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB:

8. Companies have needed multiple networks in order to carry data, documents, voice, and video information services because: a) those information services transfer at different rates b) of the lack of interoperability between systems and devices c) those information services could not be downlinked d) of security standards Ans: b Difficulty: Hard Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB: Reflective thinking

9. Today, data, voice, and video networks are converging into a single network based on: a) transmission control protocol b) user datagram protocol c) VoIP d) packet or IP technology Ans: d Difficulty: Medium Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB:

10. When all information services are handled the same way by one high-speed packet network using either wireline or wireless, the impacts include all of the following except: a) the technical barriers to collaborative work are eliminated b) new forms of business communication using multimedia applications become possible c) all remote and wireless access to the network are secured d) the network does not restrict the kinds of computing devices that could be used Ans: c Difficulty: Hard Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB: Use of Information Technology

11. Which standard is internationally-accepted for digital cellular communication and is the most popular standard for mobile phones? a) TCP b) GSM c) SIP d) UDP Ans: b Difficulty: Medium Section Ref: 4.2 Network Management and Collaboration Technology AACSB: Use of Information Technology

12. _____________ are private tunnels within a public network or the Internet that is created by encryption. a) VPNs b) UDPs c) portals d) extranets Ans: a Difficulty: Medium Section Ref: 4.2 Network Management and Collaboration Technology AACSB: Use of Information Technology

13. A(n) ___________ is a Web-based personalized gateway to information and knowledge in network computing. a) VPN b) TCP c) portal d) extranet Ans: c Difficulty: Medium Section Ref: 4.2 Network Management and Collaboration Technology AACSB: Use of Information Technology

14. ___________ such as Yahoo! and MSN are gateways to general information on the Internet.

a) Corporate portals b) Commercial portals c) Mobile portals d) Vertical portals Ans: b Difficulty: Easy Section Ref: 4.2 Network Management and Collaboration Technology AACSB: Use of Information Technology

15. It is estimated that Internet searchers are successful at finding what they seek about ________ percent of the time. a) 10 b) 25 c) 50 d) 75 Ans: c Difficulty: Medium Section Ref: 4.2 Network Management and Collaboration Technology AACSB: Use of Information Technology

16. An enterprise’s network capability depends on all of the following except: a) proper planning, maintenance, and management b) a VPN with strong encryption and passwords c) bandwidth of sufficient capacity and connectivity to link people, locations, and data. d) devices that make it possible for authorized users to connect to the network.

Ans: b Difficulty: Medium Section Ref: 4.2 Network Management and Collaboration Technology AACSB: Use of Information Technology

17. The ________ suite is the standard used with almost any network service. a) Internet protocol b) Transport Control Protocol c) User Datagram Protocol d) Voice over IP Ans: a

Difficulty: Easy Section Ref: 4.2 Network Management and Collaboration Technology AACSB:

18. High-speed networks are commonly called ________. a) packet b) broadband c) converged d) IP telephony Ans: b Difficulty: Easy Section Ref: 4.2 Network Management and Collaboration Technology AACSB:

19. ________ standardizes the signaling of calls or communications between different types of devices/end-points from different vendors such as IP phones, IM clients, and smartphones. a) Radio Frequency ID (RFID) b) Session Initiation Protocol (SIP) c) User Datagram Protocol (UDP) d) Voice over IP (VoIP) Ans: b Difficulty: Medium Section Ref: 4.2 Network Management and Collaboration Technology AACSB:

20. Factors contributing to a consolidated and enterprisewide approach to mobility are all of the following except: a) lessening competitive pressure as mobile technology gets more widely adopted b) new wireless technologies and standards, primarily the 802.11n standard c) high-speed wireless networks d) overall increased speed of business Ans: a Difficulty: Medium Section Ref: 4.3 Wireless, Enterprise Mobility and IP Telephony AACSB:

21. Which of the following is not a type of wireless network? a) SMS b) GSM c) EDGE d) Wi-Fi Ans: a Difficulty: Medium Section Ref: 4.3 Wireless, Enterprise Mobility and IP Telephony AACSB: Use of Information Technology

22. All of the following are true of social networks and wikis except: a) Crawlers and spiders search content that users had posted and tag it with keywords, which makes their content searchable. b) Social networks are redefining the way people communicate and have become highly influential in business and politics. c) Communication and collaboration technologies can become abusive because they can keep people connected with no real off-switch and intrude on personal time. d) Social software includes IM, RSS, and Internet forums.

Ans: a Difficulty: Medium Section Ref: 4.3 Wireless, Enterprise Mobility and IP Telephony; 4.6 Social and Ethical Issues AACSB: Use of Information Technology

23. A wiki is all of the following except: a) a software program b) a discovery tool c) a collaboration site d) a search engine Ans: d Difficulty: Medium Section Ref: 4.4 Discovery, Search, and Customized Delivery AACSB: Use of Information Technology

24. There are differences in the ways various search engines work. They each perform the following basic tasks except: a) They search the Internet based on key words.

b) They are powered by intelligent agents. c) They keep an index of the words they find, and where they find them. d) They allow users to search for words or combinations of words found in their index.

Ans: b Difficulty: Hard Section Ref: 4.4 Discovery, Search, and Customized Delivery AACSB: Use of Information Technology

25. _______ technology provides a mechanism for information systems to act on behalf of their users. a) Intelligent agent b) Search engine c) Wiki d) XML Ans: a Difficulty: Medium Section Ref: 4.4 Discovery, Search, and Customized Delivery AACSB: Use of Information Technology

26. Which of the following is not a characteristic of blogs? a) Blogs started out as Internet journaling and personal publishing tools, but enterprises now use these systems to replace e-mail and support collaborative work. b) Blogs are simple to build due to user-friendly programs from blogger.com, blogspot.com, pitas.com, and others. c) Blog servers require more dedicated resources than an enterprise intranet. d) Blogs have become one of the fastest growing enterprise solutions as businesses recognize that the ability to easily find information contained within enterprise blogs is critical to improving worker productivity.

Ans: c Difficulty: Medium Section Ref: 4.4 Discovery, Search, and Customized Delivery AACSB: Use of Information Technology

27. Which of the following is not a characteristic or feature of RSS? a) Web feeds provided through RSS offer headlines, summaries, and links from sites in an XML file that can be viewed using software called a reader or aggregator. b) RSS readers are software that monitors blogs or Web sites for new content.

c) RSS feeds dramatically cut down on the time it takes to search for information online. d) With RSS and a newsreader, whenever there is new content, subscribers are notified of the availability of the new content, which they can then access by clicking a link.

Ans: d Difficulty: Medium Section Ref: 4.4 Discovery, Search, and Customized Delivery AACSB: Use of Information Technology

28. All of the following correctly define the networking technology except: a) WAP is an Internet protocol developed for transferring information on the Internet to and from wireless clients. b) EV-DO is fast wireless broadband access that runs in a Wi-Fi hotspot. c) Instant messaging has become a mission-critical collaboration tool for over 130 million workers in businesses of all sizes. d) Bluetooth is how mobile phones, mobile and fixed computers, and PDAs can be easily interconnected using a short-range RF wireless connection.

Ans: b Difficulty: Hard Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB: Use of Information Technology

29. Which of the following characteristics of collaboration is not correct? a) The impact of collaboration on performance is twice as significant as a company’s aggressiveness in pursuing new market opportunities. b) Of all the collaboration technologies that were studied, web conferencing (Web-based meetings) was used more extensively in high-performing companies than in low-performing ones. c) 20 percent of employees work away from their company’s headquarters or at a remote location, away from their supervisors. d) There is a global culture of collaboration, there are regional differences in how people in various countries prefer to communicate Ans: c Difficulty: Hard Section Ref: 4.5 Collaboration and Web-based Meetings AACSB: Use of Information Technology

30. Group work is a complex process that depends primarily on all of the following except:

a) the task b) transportation costs c) human factors d) available decision support Ans: b Difficulty: Easy Section Ref: 4.5 Collaboration and Web-based Meetings AACSB: Reflective thinking

31. ________ are groups of people who work interdependently with shared purpose across space, time, and organization boundaries using technology to communicate and collaborate. a) Dynamic teams b) Project teams c) Work teams d) Virtual teams Ans: d Difficulty: Medium Section Ref: 4.5 Collaboration and Web-based Meetings AACSB: Use of Information Technology

32. Social and ethical issues that are arise when connectivity creates a 24x7 workplace environment and that management needs to consider include all of the following except: a) quality of working life b) RF emissions of handheld devices c) technology addition or anxiety d) driving while talking to friends Ans: d Difficulty: Medium Section Ref: 4.6 Social and Ethical Issues AACSB: ethical and legal responsibilities in organizations and society

33. Changes brought about by the Internet: a) have been much more beneficial for consumers than for online retailers. b) are as profound as previous historic milestones such as the Renaissance or Industrial Revolution c) have increased the productivity of all workers connected to it. d) all of the above

Ans: b Difficulty: Medium Section Ref: 4.6 Social and Ethical Issues AACSB: ethical and legal responsibilities in organizations and society Ethical issues

True/False

34. By integrating collaboration tools, wireless networks, and instant communication devices, companies can reduce their paper-based processes and the number of personnel for operations and administration.

Ans: True Difficulty: Medium Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB: Reflective thinking

35. Social networking via mobile phones is shrinking the world to the size of a small screen.

Ans: True Difficulty: Medium Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB: Reflective thinking

36. All four types of information services—data, documents, voice, and video—transmit over networks using the TCP protocol.

Ans: False Difficulty: Hard Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB: Use of Information Technology

37. To prepare data and documents for transmission over a network, they are converted into digital packets based on the Internet protocol.

Ans: True

Difficulty: Medium Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB: Use of Information Technology

38. Packet technologies convert voice, video, and data into packets that can be transmitted together over a single, high-speed network eliminating the need for separate networks.

Ans: True Difficulty: Medium Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB:

39. Productivity improvements from business collaboration tools have been limited because those tools relied on commonly accepted industry protocols that severely limited interoperability.

Ans: False Difficulty: Medium Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB:

40. GSM is an internationally-accepted standard for digital cellular communication and the most popular standard for mobile phones in the world.

Ans: True Difficulty: Medium Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB:

41. The disadvantage of converged networks is that they increase networking costs and the costs of integrating applications and bandwidth.

Ans: False Difficulty: Medium Section Ref: 4.2 Network Management and Collaboration Technology AACSB: Use of Information Technology

42. IP telephony has enabled convergence of LAN/WAN corporate infrastructures to the desktops.

Ans: True Difficulty: Medium Section Ref: 4.2 Network Management and Collaboration Technology AACSB: Use of Information Technology

43. Advances in converged networks, SIP, and tools have eliminated the barriers to full integration and interoperability.

Ans: False Difficulty: Medium Section Ref: 4.2 Network Management and Collaboration Technology AACSB: Use of Information Technology

44. With VoIP, voice and data transmissions are sent over telephone wires as packets, which is more expensive than equivalent service from traditional telecommunications companies.

Ans: False Difficulty: Medium Section Ref: 4.3 Wireless, Enterprise Mobility, and IP Telephony AACSB:

45. Enterprises are moving away from unsystematic adoption of mobile devices and infrastructure to a strategic build-out of mobile capabilities.

Ans: True Difficulty: Medium Section Ref: 4.3 Wireless, Enterprise Mobility, and IP Telephony AACSB:

46. Wi-Fi networks usually consist of a router, which transmits the signal, and one or more adapters, which receive the signal and are usually attached to computers.

Ans: True Difficulty: Medium Section Ref: 4.3 Wireless, Enterprise Mobility, and IP Telephony

AACSB:

47. WiMax enables wireless broadband access as an alternative to cable and DSL. Ans: True Difficulty: Medium Section Ref: 4.3 Wireless, Enterprise Mobility, and IP Telephony AACSB:

48. What makes WiMax powerful is that by turning voice into digital data packets, they can be stored, copied, combined with other data, and distributed to other devices that connect to the Internet.

Ans: False Difficulty: Medium Section Ref: 4.3 Wireless, Enterprise Mobility, and IP Telephony AACSB:

49. Ask, Google, del.icio.us, flikr, and other search engines compete for web users, but Google is by far the most popular search engine.

Ans: False Difficulty: Easy Section Ref: 4.4 Discovery, Search, and Customized Search Engines AACSB:

50. Enterprise search engines can crawl through various types of content such as external Web sites, network and local file servers, Microsoft Exchange and Lotus Notes folders, and databases.

Ans: True Difficulty: Medium Section Ref: 4.4 Discovery, Search, and Customized Search Engines AACSB: Use of Information Technology

51. A limitation of enterprise searches is that they cannot be integrated with other applications.

Ans: False Difficulty: Medium Section Ref: 4.4 Discovery, Search, and Customized Search Engines AACSB: Use of Information Technology

52. BitTorrent is a protocol designed for transferring or sharing files; and is particularly useful for transferring huge files to a wide audience without the high cost of servers and bandwidth resources.

Ans: True Difficulty: Medium Section Ref: 4.4 Discovery, Search, and Customized Search Engines AACSB: Use of Information Technology

53. Examples of IT communication support for different-time/different-place situations are email and virtual meetings.

Ans: True Difficulty: Medium Section Ref: 4.5 Collaboration and Web-based Meetings AACSB: Reflective thinking

54. A risk associated with tools that are meant to improve the productivity and quality of life in general is that they can lead to abuses such as intruding on an employee’s or manager’s personal time.

Ans: True Difficulty: Medium Section Ref: 4.6 Social and Ethical Issues AACSB: Critical thinking

Short Answer

55. Multiple networks were needed in the past because of the lack of _________ or connectivity between devices.

Ans: interoperability Difficulty: Medium Section Ref: 4.2 Network Management and Collaboration Technology AACSB:

56. Twitter is a free service that lets people send text posts called _________ to the Twitter Web site using the web, phone, or IM. Ans: tweets Difficulty: Medium Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB:

57. The ________ mobile network standards include WiMax, WiBro, and UMTS LTE. Ans: 4G Difficulty: Easy Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB:

58. _________ networks form the backbone that is driving the merger of voice, data, video, and radio waves.

Ans: IP Difficulty: Medium Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB:

59. _________ is fast wireless broadband access (3G) that does not need a Wi-Fi hotspot.

Ans: EV-DO Difficulty: Medium Section Ref: 4.1 Enterprise Networks, Connectivity, and Trends AACSB: Use of Information Technology

60. The protocol that standardizes communications between different types of devices, such as IP phones and IM clients, from different vendors and provides users with easy access is ________.

Ans: SIP Difficulty: Hard Section Ref: 4.2 Network Management and Collaboration Technology AACSB: Use of Information Technology

61. Developing software for wireless devices had been challenging because there was no widely accepted ________ for wireless devices.

Ans: standard Difficulty: Easy Section Ref: 4.2 Network Management and Collaboration Technology AACSB:

62. A(n) _________ connects the company with its customers or trading partners for B2B commerce and real-time supply chain management.

Ans: extranet Difficulty: Medium Section Ref: 4.2 Network Management and Collaboration Technology AACSB: Use of Information Technology

63.A type of network that is used to distribute frequently needed employee handbooks, government forms, policies, and other materials to employees over the company’s internal network is referred to as a(n) ______________ Ans: Intranet Difficulty: Medium Section Ref: 4.2 Network Management and Collaboration Technology AACSB: Use of Information Technology

64. Software agents for browsing, finding, and retrieving information on the Internet and intranets can automate _________ .

Ans: discovery Difficulty: Medium Section Ref: 4.2 Network Management and Collaboration Technology AACSB:

65. A(n) _____________ is a Web-based personalized gateway to information and knowledge in network computing that was introduced in 1997.

Ans: portal Difficulty: Easy Section Ref: 4.2 Network Management and Collaboration Technology AACSB:

66. _________ are Web portals that use advanced speech recognition and text-to-speech techniques, voice portals allow users to retrieve e-mail, credit card data, airline flight information, and so on.

Ans: Voice portals Difficulty: Hard Section Ref: 4.2 Network Management and Collaboration Technology AACSB: Use of Information Technology

67. A _________ is a type of local area network (LAN) that uses high-frequency radio waves rather than wires to communicate between computers or devices such as printers, which are referred to as nodes on the network.

Ans: WLAN (wireless local area network) Difficulty: Easy Section Ref: 4.3 Wireless, Enterprise Mobility, and IP Telephony AACSB:

68. A ________ is an enterprise that has the ability to connect and control suppliers, partners, employees, products, and customers from any location.

Ans: mobile enterprise Difficulty: Easy Section Ref: 4.3 Wireless, Enterprise Mobility, and IP Telephony AACSB:

69. _________ takes advantage of available metadata and provides access control, simple and advanced search, and browser-based administration.

Ans: Enterprise search Difficulty: Easy Section Ref: 4.4 Discovery, Search, and Customized Search Engines AACSB:

70. The Federal Communications Commission requires manufacturers to report the relative amount of ________ absorbed into the head by any given cell phone. This number is known as the SAR, or specific absorption rate.

Ans: RF (radio frequency) Difficulty: Easy Section Ref: 4.6 Social and Ethical Issues AACSB:

Essay

71. Discuss the benefits of converged networks.

Ans: Having fewer networks to maintain and support can decrease networking costs significantly. The costs of integrating applications and bandwidth are lower because traffic is consolidated over one network. Converged networks can save travel costs associated with intraand interorganizational meetings. On a national level, by improving the speed at which companies collaborate and respond to opportunities and threats, the convergence of wireline and wireless networks can support productivity growth.

Difficulty: Medium Section Ref: 4.2 Network Management and Collaboration Technology AACSB: Use of Information Technology

72. Why do companies use portals? List and briefly define three types of portals.

Ans: A challenge facing organizations is information overload because of the growing use of intranets. Information is scattered across numerous documents, e-mail messages, and databases at different locations and systems. Accessing relevant, accurate, and complete information can be time consuming and require access to multiple systems. To avoid losing a lot of productive employee time, companies use portals.

1. Corporate (enterprise) portals are gateways to corporate Web sites that enable communication, collaboration, and access to company information. A corporate portal is a personalized, single point of access through a Web browser to critical business information located inside and outside of an organization.

2. Commercial portals such as Yahoo! and MSN are gateways to general information on the Internet.

3. Decision portals provide team members with models they can use to evaluate decision criteria, objectives, and alternatives from their desktops.

4. Publishing portals are intended for communities with specific interests.

5. Mobile portals are those accessible from mobile devices.

Difficulty: Medium Section Ref: 4.2 Network Management and Collaboration Technology AACSB: Use of Information Technology

73. Discuss two factors that are driving the need for messaging and collaboration.

Ans: Several factors are driving the need for messaging and collaboration. People need to work together and share documents. Groups make most of the complex decisions in organizations.

And organizational decision making is difficult when team members are geographically spread out and working in different time zones. A huge majority of employees around the world work in remote offices.

Difficulty: Easy Section Ref: 4.5 Collaboration and Web-based Meetings AACSB: Use of Information Technology

Chapter: Chapter 05: Securing the Enterprise and Business Continuity

Multiple Choice

1. What was the cause of the personal financial data breach at Choicepoint? a) Hacker attack b) Company negligence c) Malicious spyware d) Network intrusion Ans: b Difficulty: Medium Section Ref: Introduction AACSB: Ethical and legal responsibilities in organizations and society

2. ________ refers to the rules and processes to ensure that the enterprise follows accepted ethical standards, best practices, and laws. a) Ant-fraud policies b) Corporate governance c) Enterprise systems d) Organizational compliance Ans: b Difficulty: Medium Section Ref: Introduction AACSB: Ethical and legal responsibilities in organizations and society

3. IT security risks are ___________. a) business risks b) decreasing in number c) avoidable d) a technical issue Ans: a Difficulty: Easy Section Ref: 5.1 Data and Enterprise Security Incidents AACSB: Ethical and legal responsibilities in organizations and society

4. Information security (infosec) should be viewed as a ___________. a) technical issue assigned to the IT department. b) resource for preventing business disruptions and satisfying governance responsibilities c) a defense against internal threats. d) a defense against external threats and malware.

Ans: b Difficulty: Easy Section Ref: 5.1 Data and Enterprise Security Incidents AACSB: Ethical and legal responsibilities in organizations and society

5. What was the cause of the Department of Veterans Affairs' data theft? a) outdated anti-virus protection b) lack of firewalls and intrusion detection c) disgruntled employee d) failure to enforce policies Ans: d Difficulty: Medium Section Ref: 5.1 Data and Enterprise Security Incidents AACSB: Ethical and legal responsibilities in organizations and society

6. The time-to-exploitation of today’s most sophisticated spyware and viruses has: a) been eliminated. b) decreased from months to days. c) increased from days to weeks. d) not changed.

Ans: b Difficulty: Hard Section Ref: 5.1 Data and Enterprise Security Incidents AACSB:

7. Each of the following is a U.S. law or regulation that requires strict IT security measures except: a) Basel II b) Gramm-Leach-Bliley Act (GLB)

c) Sarbanes-Oxley (SOX) d) USA Patriot Act Ans: a Difficulty: Medium Section Ref: 5.1 Data and Enterprise Security Incidents AACSB: Ethical and legal responsibilities in organizations and society

8. Microsoft releases _________ to update and patch vulnerabilities in its operating systems, including Vista, and other software products, including Office 2007. a) firewalls b) podcasts c) service packs d) workbooks Ans: c Difficulty: Easy Section Ref: 5.1 Data and Enterprise Security Incidents AACSB:

9. To help organizations successfully meet business challenges and regulatory requirements, the IT Governance Institute publishes ________, which provides a reference for management, users, and IS audit, control and security practitioners. a) Control Objectives for Information and Related Technology (COBIT) b) Fair Credit Reporting Manual (FCRM) c) Personal Information Protection and Electronic Document Act (PIPEDA) d) Spyware guide Ans: a Difficulty: Hard Section Ref: 5.1 Data and Enterprise Security Incidents AACSB: Ethical and legal responsibilities in organizations and society

10. Effective enterprisewide IT security and internal control begins with: a) senior management commitment and support b) security policies and training c) security procedures and enforcement d) software and hardware security tools Ans: a

Difficulty: Medium Section Ref: 5.1 Data and Enterprise Security Incidents AACSB:

11. To be effective, the company's acceptable use policy (AUP) needs to define the responsibilities of every user by specifying each of the following except: a) acceptable actions b) unacceptable actions c) federal laws d) consequences of noncompliance Ans: c Difficulty: Medium Section Ref: 5.1 Data and Enterprise Security Incidents AACSB: Ethical and legal responsibilities in organizations and society

12. Which is an exercise that is done to determine the impact of losing the use of an organizational resource; to identify the resources needed to recover from such a loss, and to prioritize the recovery of systems? a) acceptable use policy (AUP) b) business impact analysis (BIA) c) internal control audit d) spyware quarantine Ans: b Difficulty: Medium Section Ref: 5.1 Data and Enterprise Security Incidents AACSB: Ethical and legal responsibilities in organizations and society

13. Which is not a major category of unintentional threats to information systems? a) computer systems failures b) environmental hazards c) hacker attacks d) human error Ans: c Difficulty: Hard Section Ref: 5.2 IS Vulnerabilities and Threats AACSB: Critical thinking

14. Those who perform ethical hacking, such as doing penetrating tests on their clients’ systems to find weak points, are called: a) black-hat hackers b) crackers c) grey-hat hackers d) white-hat hackers Ans: d Difficulty: Easy Section Ref: 5.2 IS Vulnerabilities and Threats AACSB:

15. The majority of unintentional information security breaches in organizations have been caused by: a) cybercriminals b) human errors c) outdated anti-virus software d) viruses and other malware Ans: b Difficulty: Medium Section Ref: 5.2 IS Vulnerabilities and Threats AACSB:

16. What is a strategy used by computer criminals or corporate spies that is built on a deceptive trust relationship to gain unauthorized access or sensitive information? a) data tampering b) malware c) social engineering d) occupational fraud Ans: c Difficulty: Medium Section Ref: 5.2 IS Vulnerabilities and Threats AACSB:

17. Methods that are used to commit fraud include all of the following except: a) weapons

b) deception c) confidence d) trickery Ans: a Difficulty: Medium Section Ref: 5.3 Fraud and Computer-Mediated Crimes AACSB:

18. Which of the following is not an internal fraud prevention measure? a) perimeter defense technologies b) prosecution of intruders c) employee training d) recruitment screening Ans: b Difficulty: Medium Section Ref: 5.3 Fraud and Computer-Mediated Crimes AACSB:

19. Physical security measures to protect computer facilities and resources, such as computers, data centers, software, and networks, are all of the following except: a) Requiring strong passwords. b) Shielding against electromagnetic fields. c) Fire prevention, detection, and extinguishing systems. d) Motion detector alarms that detect physical intrusion.

Ans: a Difficulty: Medium Section Ref: 5.4 IT Security Management Practices AACSB: Use of Information Technology

20. Company executives are worried about proprietary information "walking out the door" on employees' iPods, PDAs, or USB drives. Which of the following would be the most effective and viable solution to protect against this type of data loss/theft? a) Ban the use of those devices altogether. b) Do random spot checks of those devices. c) Run software on machines that tracks and manages what is being passed across to any USB drive. d) Notify all employees via email of the risk of data loss due to those devices.

Ans: c Difficulty: Hard Section Ref: 5.4 IT Security Management Practices AACSB: Critical thinking

21. What is the major defense line against unauthorized insiders and outsiders? a) access control b) administrative controls c) intelligent agents d) physical controls Ans: a Difficulty: Medium Section Ref: 5.4 IT Security Management Practices AACSB:

22. Which of the following is true of wireless network security? a) Wireless packet analyzers, such as AirSnort and WEPcrack, are readily available tools for protecting wireless networks. b) Sensitive data that are WEP-encrypted and that are transmitted between two wireless devices are at risk of being intercepted and disclosed. c) Wireless access points (WAPs) behind a firewall prevent access into a network. d) Wireless networks are as difficult to protect as wireline ones.

Ans: b Difficulty: Hard Section Ref: 5.5 Network Security AACSB: Use of Information Technology

23. When dealing with consumer-facing applications, such as online banking and e-commerce, strong authentication must be balanced with ________. a) costs b) convenience c) privacy risks d) war driving risks Ans: b Difficulty: Medium

Section Ref: 5.5 Network Security AACSB:

24. Internal control is a process designed to achieve all of the following except: a) enterprisewide training b) compliance with laws c) operational efficiency d) reliable financial reporting Ans: a Difficulty: Medium Section Ref: 5.6 Internal Control and Compliance Management AACSB: Ethical and legal responsibilities in organizations and society

25. Approximately _________ percent of occupational fraud could have been prevented if proper IT-based internal controls had been designed, implemented, and followed. a) 5 b) 25 c) 50 d) 85 Ans: d Difficulty: Medium Section Ref: 5.6 Internal Control and Compliance Management AACSB:

26. Characteristics of business continuity planning and disaster recovery include all of the following except: a) Recovery planning is part of asset protection. b) Planning should focus first on recovery from minor or trivial losses. c) The plan should be kept in a safe place; copies should be given to all key managers, or it should be available on the intranet. d) The plan should be written so that it will be effective in case of disaster, not just in order to satisfy the auditors.

Ans: b Difficulty: Medium Section Ref: 5.7 Business Continuity and Disaster Recovery Planning AACSB:

27. _________ percent of companies that suffer a significant data loss die within five years, according to Freeman Mendel, the chair of the FBI’s 2006 Infragard National Conference. a) 7 b) 23 c) 57 d) 93 Ans: d Difficulty: Medium Section Ref: 5.7 Business Continuity and Disaster Recovery Planning AACSB:

28. Why is auditing a Web site important from the perspective of risk? a) It is a good preventive measure to manage legal risk. b) It is a key part of disaster recovery. c) To insure that biometrics were implemented properly. d) It is a necessary corrective action.

Ans: a Difficulty: Medium Section Ref: 5.8 Auditing and Risk Management AACSB:

29. Which is an ethical issue that stems from implementing information security programs? a) monitoring of individuals’ activities may invade their privacy b) biometrics may be a violation of freedom of speech c) scope of employment has expanded beyond the perimeters of the company d) all of the above Ans: a Difficulty: Medium Section Ref: 5.8 Auditing and Risk Management AACSB:

True/False

30. A company’s revenues suffer when customers discover that their private information has been compromised.

Ans: True Difficulty: Easy Section Ref: Introduction AACSB:

31. Detecting computer crimes and tracking criminals has been getting easier because criminals do not invest a lot of effort to bypass company security measures.

Ans: False Difficulty: Easy Section Ref: 5.1 Data and Enterprise Security Incidents AACSB: Critical thinking

32. Responsibility for internal control and compliance with information security policies rests directly on end-users.

Ans: False Difficulty: Easy Section Ref: 5.1 Data and Enterprise Security Incidents AACSB: Ethical and legal responsibilities in organizations and society

33. The growth in data breaches indicates that one of the biggest mistakes managers make is they underestimate vulnerabilities and threats.

Ans: True Difficulty: Medium Section Ref: 5.2 IS Vulnerabilities and Threats AACSB: Ethical and legal responsibilities in organizations and society

34. Computer criminals are increasingly ego-driven rather than profit-driven.

Ans: False Difficulty: Medium Section Ref: 5.2 IS Vulnerabilities and Threats AACSB:

35. Unintentional threats include human errors, environmental hazards, and computer system failures.

Ans: True Difficulty: Easy Section Ref: 5.2 IS Vulnerabilities and Threats AACSB:

36. Data tampering is the method often used by insiders and fraudsters and is extremely serious because it may not be detected.

Ans: True Difficulty: Medium Section Ref: 5.2 IS Vulnerabilities and Threats AACSB:

37. Trojans horses are referred to as backdoors because they give an attacker illegal access to a network or account through a network port.

Ans: True Difficulty: Medium Section Ref: 5.2 IS Vulnerabilities and Threats AACSB:

38. With two-factor authentication, two types of information are used to verify the user’s identity, such as passwords and botnets.

Ans: False Difficulty: Medium Section Ref: 5.2 IS Vulnerabilities and Threats AACSB: Use of Information Technology

39. When a person uses his or her occupation for personal gain through deliberate misuse of the organization’s resources or assets it is called occupational fraud.

Ans: True Difficulty: Medium Section Ref: 5.3 Fraud and Computer-Mediated Crimes AACSB:

40. Regulators look favorably on companies that can demonstrate good corporate governance and best practice operational risk management.

Ans: True Difficulty: Medium Section Ref: 5.3 Fraud and Computer-Mediated Crimes AACSB: Ethical and legal responsibilities in organizations and society

41. Fraud detection is too complex to be handled effectively by intelligent analysis engines using advanced data warehousing.

Ans: False Difficulty: Medium Section Ref: 5.3 Fraud and Computer-Mediated Crimes AACSB:

42. One of the worst and most prevalent crimes is identity theft, which has been made worse by widespread electronic sharing and databases.

Ans: True Difficulty: Medium Section Ref: 5.3 Fraud and Computer-Mediated Crimes AACSB:

43. Businesses that neglect implementing privacy protections are rarely subject to enforcement actions, lawsuits, or fines.

Ans: False Difficulty: Medium Section Ref: 5.4 IT Security Management Practices AACSB: Use of Information Technology

44. At a strategic level, the totality of a company’s data resources is nearly irreplaceable. Yet data at this macro-level remains largely overlooked by corporate leadership.

Ans: True Difficulty: Medium Section Ref: 5.9 Managerial issues AACSB:

45. Since recovery planning is part of asset protection, every organization should make managers responsible for identifying and protecting assets under their functional control.

Ans: True Difficulty: Medium Section Ref: 5.7 Business Continuity and Disaster Recovery Planning AACSB: Ethical and legal responsibilities in organizations and society

46. Auditing a Web site is a good preventive measure to manage the legal risk due to the content of the site, which may offend people or violate copyright laws or other regulations.

Ans: True Difficulty: Medium Section Ref: 5.8 Auditing and Risk Management AACSB: Ethical and legal responsibilities in organizations and society

47. The legal doctrine of respondeat superior holds employers liable for the misconduct of their employees that occurs within the scope of their employment Ans: True Difficulty: Hard Section Ref: 5.8 Auditing and Risk Management AACSB: Ethical and legal responsibilities in organizations and society

48. Risk-management analysis can be enhanced by the use of decision support systems.

Ans: True Difficulty: Hard Section Ref: 5.8 Auditing and Risk Management

AACSB:

Short Answer

49. In order to make informed decisions about how to calculate the proper and reasonable level of infosec protection, managers responsible for a digital asset first need to assess its __________.

Ans: risk exposure Difficulty: Hard Section Ref: 5.1 Data and Enterprise Security Incidents AACSB: Ethical and legal responsibilities in organizations and society

50. Building an effective IT security program requires security policies. The most critical policy is the ____________ that informs users of their responsibilities and the consequences of failing in their responsibilities.

Ans: acceptable use policy Difficulty: Medium Section Ref: 5.1 Data and Enterprise Security Incidents AACSB: Ethical and legal responsibilities in organizations and society

51. __________ is the term often used to describe someone who gains unauthorized access to a computer system.

Ans: Hacker Difficulty: Medium Section Ref: 5.2 IS Vulnerabilities and Threats AACSB: Ethical and legal responsibilities in organizations and society

52. _________ is a collection of tactics used to manipulate people into performing actions or divulging confidential information Ans: Social engineering Difficulty: Medium Section Ref: 5.2 IS Vulnerabilities and Threats AACSB: Ethical and legal responsibilities in organizations and society

53. _________ is an attack when someone enters false, fabricated, or fraudulent data into a computer; or changes or deletes existing data.

Ans: Data tampering Difficulty: Medium Section Ref: 5.2 IS Vulnerabilities and Threats AACSB: Ethical and legal responsibilities in organizations and society

54. Viruses, worms, and Trojan horses are types of malicious code, which is also called _________.

Ans: malware Difficulty: Easy Section Ref: 5.2 IS Vulnerabilities and Threats AACSB: Ethical and legal responsibilities in organizations and society

55. Remote administration Trojans (RATs) are a class of backdoors that are extremely dangerous because they enable _________ over the infected machine.

Ans: remote control Difficulty: Medium Section Ref: 5.2 IS Vulnerabilities and Threats AACSB: Ethical and legal responsibilities in organizations and society

56. A(n) __________ is a collection or network of computers that are infected by software robots.

Ans: botnet Difficulty: Medium Section Ref: 5.2 IS Vulnerabilities and Threats AACSB: Ethical and legal responsibilities in organizations and society

57. A(n) ________ site looks like a legitimate Web site to trick user into inputting confidential data.

Ans: phishing

Difficulty: Medium Section Ref: 5.2 IS Vulnerabilities and Threats AACSB: Ethical and legal responsibilities in organizations and society

58. A(n) _________ scans for unusual or suspicious traffic, which is used to identify the start of a DoS attack by the traffic pattern, alerting the network administrator to take defensive action, such as switching to another IP addresses and diverting critical servers from the path of the attack.

Ans: intrusion detection system Difficulty: Hard Section Ref: 5.2 IS Vulnerabilities and Threats AACSB: Ethical and legal responsibilities in organizations and society

59. One of the worst and most prevalent non-violent crimes is __________, which usually make use of individuals’ Social Security or credit card numbers.

Ans: identity theft Difficulty: Easy Section Ref: 5.3 Fraud and Computer-Mediated Crimes AACSB:

60. _________ controls are automated methods of verifying the identity of a person, based on a physiological or behavioral characteristic, such as a fingerprint or keystroke dynamics.

Ans: Biometric Difficulty: Easy Section Ref: 5.4 IT Security Management Practices AACSB: Use of Information Technology

61. A(n) ___________ is a technology that checks Internet packets sent to and from a network and enforces access-control policies between networks.

Ans: firewall Difficulty: Medium Section Ref: 5.5 IT Network Security AACSB:

62. The major objective of _________ is the proof of identity.

Ans: authentication Difficulty: Medium Section Ref: 5.5 IT Network Security AACSB:

63. Unauthorized wireless _________ could be deployed by malicious users to trick users to connect to them. Malicious users then gain access to sensitive data stored on client machines, including passwords, customer information, and intellectual property.

Ans: access points Difficulty: Hard Section Ref: 5.5 IT Network Security AACSB:

64. Effective accounting information systems are needed to provide a(n) _______ trail that allows frauds to be discovered and makes them difficult to conceal.

Ans: audit Difficulty: Medium Section Ref: 5.8 Auditing and Risk Management AACSB: Use of Information Technology

65. __________ is the chain of events linking the business continuity plan to protection and to recovery.

Ans: Disaster recovery Difficulty: Easy Section Ref: 5.7 Business Continuity and Disaster Recovery Planning AACSB: Ethical and legal responsibilities in organizations and society

Essay

66. Describe two methods of attack against computing facilities. Give an example of each type of attack.

Ans: Two possible attack methods are: Data tampering. This is the most common means of attack that occurs when someone enters false, fabricated or fraudulent data into the computer, or changes or deletes existing data. An employee may change data without authorization to hide theft of intellectual property.

Programming attacks: Computer criminals use programming techniques to modify a computer program either directly or indirectly. Examples of a programming attack are malware and denial of service attack.

Difficulty: Medium Section Ref: 5.2 IS Vulnerabilities and Threats AACSB:

67. List and briefly explain three major objectives of infosec defense strategies that enterprises should implement.

Ans: 1. Prevention and deterrence. Properly designed controls may prevent errors from occurring, deter criminals from attacking the system, and better yet, deny access to unauthorized people.

2. Detection. The earlier an attack is detected, the easier it is to combat, and the less damage is done.

3. Containment of the damage or damage control. This objective is to minimize or limit losses once a malfunction has occurred. Users want their systems back in operation as fast as possible.

4. Recovery. A recovery plan explains how to fix a damaged information system as quickly as possible.

5. Correction. Correcting the causes of damaged systems can prevent the problem from occurring again.

67 Awareness and compliance. All organization members must be aware of infosec hazards and know how to comply with the company’s security rules and regulations.

Difficulty: Medium Section Ref: 5.4 IT Security Management Practices AACSB: Ethical and legal responsibilities in organizations and society

68. Define business continuity and disaster recovery (BC/DR). List three characteristics of BC/DR plans.

Ans: BC/DR is the process by which a business plans to recover from a major disaster. Disaster recovery is the chain of events linking the business continuity plan to protection and to recovery.

Recovery planning is part of asset protection. Every organization should assign responsibility to management to identify and protect assets within their spheres of functional control.

Planning should focus first on recovery from a total loss of all capabilities.

Proof of capability usually involves some kind of what-if analysis that shows that the recovery plan is current.

All critical applications must be identified and their recovery procedures addressed in the plan.

The plan should be written so that it will be effective in case of disaster, not just in order to satisfy the auditors.

The plan should be kept in a safe place; copies should be given to all key managers, or it should be available on the intranet. The plan should be audited periodically.

Difficulty: Hard Section Ref: 5.7 Business Continuity and Disaster Recovery Planning AACSB: Ethical and legal responsibilities in organizations and society

Chapter: Chapter 06: E-Business and E-Commerce

Multiple Choice

1. Dell’s innovative business model has been based on the concept of: a) business growth and threatening competitors. b) selling to small and medium sized businesses through intermediaries. c) supplementing direct sales with build-to-order and auctions. d) e-collaboration with a few select business partners.

Ans: c Difficulty: Medium Section Ref: Introduction AACSB: Use of Information Technology

2. __________ is a broad term that refers to the buying and selling of goods and services; servicing of customers; collaborating with business partners; and conducting electronic transactions within an organization. a) Pure e-commerce b) E-business c) Online logistics d) iCommerce Ans: b Difficulty: Medium Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB:

3. The type of e-commerce depends on the digitization of which three dimensions? a) product or service; process; and delivery method. b) business process; collaboration; and transaction. c) payment method; delivery method; and production method. d) marketing channel; agent; and collaboration method.

Ans: a Difficulty: Medium Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB:

4. Purely physical companies are referred to as ____________ companies, whereas companies that are engaged only in EC are considered __________ companies. a) brick-and-mortar; virtual b) pure play; virtual c) click-and-mortar; click-and-brick d) virtual; pure play Ans: a Difficulty: Easy Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB:

5. Over which types of networks is e-commerce done? a) the Internet and extranets. b) the Internet and private networks. c) the Internet, extranets, and private networks. d) the Internet, value-added networks, on local area networks using intranets, or on a single computerized machine.

Ans: d Difficulty: Medium Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB:

6. The vast majority of e-commerce volume is of which type? a) B2B b) e-retailing c) B2C d) social commerce Ans: a Difficulty: Medium Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB:

7. E-commerce applications are supported by infrastructure and by each of the following support areas except:

a) People b) Public policy c) Marketing and advertisement d) Mobile devices Ans: d Difficulty: Medium Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB:

8. A technological limitation of e-commerce is: a) Lack of national and international government regulations and industry standards. b) Many sellers and buyers waiting for EC to stabilize before they take part. c) Lack of universally accepted standards for quality, security, and reliability. d) Many sellers and buyers waiting for EC to stabilize before they take part Ans: c Difficulty: Medium Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB:

9. Private organizational buyers and government agencies make large-volume or large-value purchases through __________, also known as reverse auctions. a) electronic tendering systems b) online direct marketing c) name-your-own-price models d) viral marketing Ans: a Difficulty: Medium Section Ref: 6.2 Major EC Mechanisms AACSB: Use of Information Technology

10. Governments and large corporations often use ____________ for procurements because they are faster and provide considerable savings. a) forward auctions b) reverse auctions c) G2C exchanges d) electronic bartering

Ans: b Difficulty: Medium Section Ref: 6.2 Major EC Mechanisms AACSB:

11. What is the electronically supported exchange of goods or services without a monetary transaction? a) e-tailing b) electronic mall c) electronic storefront d) electronic bartering Ans: d Difficulty: Easy Section Ref: 6.2 Major EC Mechanisms AACSB: Use of Information Technology

12. According to the ________ model, an enterprise can increase brand awareness or even generate sales by Web-based word-of-mouth marketing or promoting a product or service to other people. a) electronic tendering systems b) online direct marketing c) name-your-own-price models d) viral marketing Ans: d Difficulty: Medium Section Ref: 6.6 E-Commerce Support Services: Payment and Order Fulfillment AACSB: Use of Information Technology

13. Why is online shopping for services, such as buying an airline ticket or car insurance, growing rapidly? a) quicker service b) significant cost savings c) better auditing of the payment d) decrease in the number of agents Ans: b Difficulty: Medium Section Ref: 6.3 Business-to-Consumer Applications

AACSB: Reflective thinking

14. Selling books, toys, computers, and most other products on the Internet reduce vendors’ selling costs by 20 to 40 percent. To what extent can those selling costs be further reduced? a) Further reduction is difficult to achieve because the products must be delivered physically. b) Further reductions up to 75 percent can be achieved with the growth of wireless or mobile commerce. c) Minor reductions can be achieved with the growth of wireless or mobile commerce. d) Minor reductions can be achieved for firms with increased market share.

Ans: a Difficulty: Medium Section Ref: 6.3 Business-to-Consumer Applications AACSB: Critical thinking

15. A company visits the Internal Revenue Service's Web site to learn how to pay its estimated quarterly income taxes. This is an example of: a) G2G b) G2B c) G2C d) E2E Ans: b Difficulty: Medium Section Ref: 6.5 Major Models of E-Business: From E-Government to C2C AACSB: Use of Information Technology

16. Large corporations frequently consist of independent strategic business units (SBUs), which buy or sell materials, products, and services from each other. Transactions of this type can be easily automated and performed over the intranet. Major benefits of such e-commerce among SBUs are all of the following except: a) reducing inventories and costs along the supply chain b) smoothing the supply chain c) greater cooperation among SBUs d) increasing a company’s competitive edge Ans: c Difficulty: Medium Section Ref: 6.5 Major Models of E-Business: From E-Government to C2C AACSB: Critical thinking

17. All of the following are characteristics of collaborative commerce (c-commerce) except: a) C-commerce refers to the use of digital technologies that enable companies to collaboratively plan, design, develop, manage, and research products, services, and innovative EC applications. b) Numerous studies suggest that collaborative relationships may result in minor improvements in organizations’ performance. c) C-commerce implies communication, information sharing, and collaborative planning done electronically using tools such as groupware and specially designed EC collaboration tools. d) C-commerce activities usually are conducted between and among supply chain partners Ans: b Difficulty: Medium Section Ref: 6.5 Major Models of E-Business: From E-Government to C2C AACSB: Reflective thinking

18. Security requirements for EC electronic payments include all of the following except: a) authentication b) nonrepudiation c) privacy d) escrow Ans: d Difficulty: Medium Section Ref: 6.6 E-Commerce Support Services: Payment and Order Fulfillment AACSB: Ethical understanding and reasoning abilities

19. All of the following describe ethical issues related to Web tracking except: a) Log files are the principal resources from which e-businesses draw information about how visitors use a Web site creating privacy concerns. b) Direct sales from manufacturer to customers may eliminate retailers. c) By using tracking software, companies can track individuals’ movements on the Internet. d) Programs such as cookies raise privacy concerns.

Ans: b Difficulty: Medium Section Ref: 6.7 Ethical and Legal Issues in E-Business AACSB: Ethical understanding and reasoning abilities

20. Which in not a type of legal protection that online sellers have? a) Protection against the taxing of out-of-state online transactions. b) Protection against the use of their name, unique words and phrases, slogans, and Web address without permission. c) Protection against customers who download without permission copyrighted software and use it or sell it to others d) Protection against consumers who refuse to pay or who pay with bad checks.

Ans: a Difficulty: Medium Section Ref: 6.7 Ethical and Legal Issues in E-Business AACSB: Ethical understanding and reasoning abilities

True/False

21. E-business activities support selling, buying, and providing relationships, as well as the internal and external transactions involved.

Ans: True Difficulty: Easy Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB: Use of Information Technology

22. By purchasing a textbook from Borders.com and having the merchandise physically delivered, Borders.com would be considered a click-and-mortar organization because pure EC did not occur.

Ans: True Difficulty: Medium Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB: Use of Information Technology

23. In business-to-consumers (B2C), a business sells to a business but delivers the product or service to an individual consumer, such as in Godiva’s case.

Ans: False Difficulty: Medium Section Ref: 6.1 Overview of E-Business and E-Commerce

AACSB:

24. An example of business-to-consumer (B2C) is when Apple provides customer service online by collaborating electronically with its partners.

Ans: False Difficulty: Medium Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB:

25. The final participants in B2B transactions are consumers.

Ans: False Difficulty: Medium Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB:

26. A valuable property of e-tailing is the ability to offer customized products and services to individual customers at a reasonable price and quickly.

Ans: True Difficulty: Medium Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB: Use of Information Technology

27. Social commerce is concerned with the creation of places where people can collaborate online and solicit advice.

Ans: True Difficulty: Easy Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB: Use of Information Technology

28. Joint ventures, e-marketplaces, and business partnerships did not become common in EC because of the technical challenges in connecting diverse networks and databases.

Ans: False Difficulty: Medium Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB:

29. Insufficient telecommunications bandwidth is no longer a limitation of e-commerce.

Ans: False Difficulty: Easy Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB:

30. Sellers generally benefit from e-auctions due to the opportunity to bargain for lower prices.

Ans: False Difficulty: Easy Section Ref: 6.2 Major EC Mechanisms AACSB: Use of Information Technology

31. In electronic exchanges, the exchanges of goods or services occur without a monetary transaction.

Ans: False Difficulty: Easy Section Ref: 6.2 Major EC Mechanisms AACSB:

32. Directories and hyperlinks from other Web sites and intelligent search agents help buyers find the best stores and products to match their needs Ans: True Difficulty: Medium Section Ref: 6.3 Business-to-Consumer Applications AACSB: Use of Information Technology

33. Online banks and stock traders protect ID numbers and passwords, which provides complete security that customers demand.

Ans: False Difficulty: Medium Section Ref: 6.3 Business-to-Consumer Applications AACSB: Reflective thinking

34. If a seller is a click-and-mortar company, such as Levi’s or GM, it may face tough channel conflict with its regular distributors when it sells directly online.

Ans: True Difficulty: Medium Section Ref: 6.3 Business-to-Consumer Applications AACSB: Use of Information Technology

35. In the desktop purchasing model, a company has many suppliers, but the quantities it purchases from each one are relatively small. This model is most appropriate for small and medium-sized companies.

Ans: False Difficulty: Easy Section Ref: 6.4 Business-to-Business Applications AACSB:

36. Numerous studies suggest that collaborative relationships can result in significant benefits such as cost reduction, increased revenues, and better customer retention.

Ans: True Difficulty: Medium Section Ref: 6.5 Major Models of E-Business: From E-Government to C2C AACSB: Use of Information Technology

37. In many countries, the growth of C2C (consumer-to-consumer) buying and selling on auction Web sites has been severely limited because of concern about fraud.

Ans: False Difficulty: Medium

Section Ref: 6.6 E-Commerce Support Services: Payment and Order Fulfillment AACSB: Use of Information Technology

38. The Internet introduced the concept of interactive marketing, which has enabled marketers and advertisers to interact directly with customers.

Ans: True Difficulty: Easy Section Ref: 6.6 E-Commerce Support Services: Payment and Order Fulfillment AACSB: Use of Information Technology

39. Many companies may be obligated to monitor employees’ e-mail. Thus, they have installed software that monitors online activities to discover employees who are harassing other employees.

Ans: True Difficulty: Medium Section Ref: 6.7 Ethical and Legal Issues in E-Business AACSB: Ethical understanding and reasoning abilities

40. Programs such as cookies raise privacy concerns because the tracking history is stored on the PC’s hard drive, and any time the user revisits a certain Web site, the computer knows it.

Ans: True Difficulty: Medium Section Ref: 6.7 Ethical and Legal Issues in E-Business AACSB: Ethical understanding and reasoning abilities

Short Answer

41. The basic idea of EC is to _________ as many business processes as possible.

Ans: automate Difficulty: Easy Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB:

42. A(n) __________ is a virtual marketplace in which sellers and buyers meet and conduct different types of transactions.

Ans: e-market Difficulty: Medium Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB: Use of Information Technology

43. _________ are auctions that sellers use as a selling channel to many potential buyers; and in which the highest bidder wins the item.

Ans: Forward auctions Difficulty: Medium Section Ref: 6.2 Major EC Mechanisms AACSB: Use of Information Technology

44. The _________is the most common auction model for large purchases in terms of either quantities or price; and in which the lowest-price bidder wins the auction.

Ans: reverse auction Difficulty: Medium Section Ref: 6.2 Major EC Mechanisms AACSB: Use of Information Technology

45. If a seller is a click-and-mortar company, such as Levi’s or GM, it may face a challenging situation called _____________ with its regular distributors when it sells directly online. –This ultimately alienates those distributors.

Ans: channel conflict Difficulty: Medium Section Ref: 6.3 Business-to-Consumer Applications AACSB:

46. In the _____________ marketplace model, enterprises attempt to sell their products or services to other organizations electronically from their own private e-marketplace or from a third-party site.

Ans: sell-side Difficulty: Medium Section Ref: 6.4 Business-to-Business Applications AACSB: Use of Information Technology

47. The ____________ marketplace is a model in which organizations attempt to buy needed products or services from other organizations electronically.

Ans: buy-side Difficulty: Medium Section Ref: 6.4 Business-to-Business Applications AACSB: Use of Information Technology

48. In _____________, the orders of many buyers are aggregated into a larger total in order to merit more seller attention and discounts.

Ans: group purchasing Difficulty: Medium Section Ref: 6.4 Business-to-Business Applications AACSB:

49. In a special case of e-procurement known as _________, suppliers’ catalogs are aggregated into a master catalog on the buyer’s server, which enables purchasing agents to shop conveniently from their computers.

Ans: desktop purchasing Difficulty: Medium Section Ref: 6.4 Business-to-Business Applications AACSB: Use of Information Technology

50. _________ are e-marketplaces that serve one industry, such as the automotive or chemical industry.

Ans: Vertical exchanges

Difficulty: Medium Section Ref: 6.4 Business-to-Business Applications AACSB:

51. Merchants need protection against the customer’s unjustified denial of placing an order and customers need protection against merchants’ unjustified denial of payments made. Preventing such denials is known as ___________ .

Ans: Nonrepudiation Difficulty: Medium Section Ref: 6.6 E-Commerce Support Services: Payment and Order Fulfillment AACSB:

52. Wal-Mart and Home Depot warned the manufacturer Black & Decker that they would take its products off their shelves if Black & Decker began to sell its products through the Internet.

The elimination of a retailer by selling directly via the Internet is known as ____________ .

Ans: disintermediation Difficulty: Medium Section Ref: 6.7 Ethical and Legal Issues in E-Business AACSB:

53. __________ are the principal resources from which e-businesses draw information about how visitors use a site.

Ans: Log files Difficulty: Medium Section Ref: 6.7 Ethical and Legal Issues in E-Business AACSB:

Essay

50. What are three benefits of e-commerce? What are three limitations of e-commerce?

Ans: See Table 6.2 for list of benefits and Table 6.3 for list of limitations Difficulty: Easy

Section Ref: 6.1 Overview of E-Business and E-Commerce AACSB: Reflective thinking

51. Identify and discuss three challenges facing e-tailers that can slow the growth of an organization’s e-tailing efforts and their impacts.

Ans: 1. Resolving channel conflict between an online selling channel and the physical selling channels. The conflict may be internal, such as disputes about pricing or advertising policies; or between a company that wants to sell direct to customers, and its existing distributors. Channel conflict has forced some companies to limit their B2C efforts; or not to sell direct online.

2. Resolving conflicts within click-and-mortar organizations. When an established company decides to sell direct online on a large scale, it may create a conflict within its offline operations.

Conflicts may arise in areas such as pricing of products and services, allocation of resources (e.g., advertising budget), and logistics services provided by the offline activities to the online activities (e.g., handling of returns of items bought online). As a result of these conflicts, some companies have completely separated the “clicks” (the online portion of the organization) from the “mortar” or “bricks” (the traditional, offline brick-and-mortar part of the organization). Such separation may increase expenses and reduce the synergy between the two organizational parts.

3. Organizing order fulfillment and logistics. E-tailers face a difficult problem of how to ship very small quantities to a large number of buyers. This can be a difficult undertaking, especially when returned items need to be handled.

4. Determining viability and risk of online e-tailers. Many purely online e-tailers failed in 2000 2002 because of problems with cash flow, customer acquisition, order fulfillment, and demand forecasting.

5. Identifying appropriate revenue models. One early dot-com model was to generate enough revenue from advertising to keep the business afloat until the customer base reached critical mass. This model did not work. Too many dot-coms were competing for too few advertising dollars, which went mainly to well-known sites.

Difficulty: Hard Section Ref: 6.3 Business-to-Consumer Applications AACSB: Use of Information Technology

52. List and briefly describe three advertising strategies that can be used over the Internet.

Ans: Affiliate marketing is the revenue model by which an organization refers consumers to the selling company’s Web site. Affiliate marketing is used mainly as a revenue source for the referring organization and as a marketing tool for sellers.

Search engine advertisement. Search engine software programs, known as spiders, crawl through Web sites, indexing their content and links. The sites are then included in future searches.

Anyone can submit a URL to a search engine and be listed. Search engine advertisement has become the most popular online advertising method, mainly due to Google.

Ads as a Commodity. With the ads-as-a-commodity approach, people are paid for time spent viewing an ad. Consumers fill out data on personal interests, and then they receive targeted banners based on their personal profiles.

Viral Marketing refers to word-of-mouth marketing in which customers promote a product or service by telling others about it. This can be done by e-mails, in conversations facilitated in chat rooms, by posting messages in newsgroups, in wikis and blogs.

Customizing Ads. Filtering irrelevant information by providing consumers with customized ads can reduce this information overload. The companies that advertise via one-to-one advertising use the database to send customized ads to consumers. Using this feature, a marketing manager can customize display ads based on users’ profiles.

Online Events, Promotions, and Attractions. Contests, quizzes, coupons and giveaways designed to attract visitors are as much a part of online marketing as they are of offline commerce.

Advertising in Newsletters. Free newsletters are abundant; in e-commerce there are many.

Posting Press Releases Online. Millions of people visit popular portals such as Yahoo!, MSN, AOL, and Google every day looking for news. Thus, it makes sense to try to reach an audience through such sites.

Advergaming is the practice of using games, particularly computer games, to advertise or promote a product, an organization, or a viewpoint.

Difficulty: Medium Section Ref: 6.6 E-Commerce Support Services: Payment and Order Fulfillment AACSB: Use of Information Technology

Chapter: Chapter 07: Mobile Commerce

Multiple Choice

1. Food Lion and other grocery businesses have turned to ___________ for speedier checkout and to improve operations, customer service, and employee satisfaction. a) mobile commerce b) POS terminals c) handheld devices d) wireless technology Ans: d Difficulty: Easy Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB: Use of Information Technology

2. All of the following describe wireless technology except: a) One can create applications using wireless technologies that are not available with wireline systems. b) Applications built using wireless technologies have fewer functionalities than wireline-based applications. c) Wireless systems may be more expensive than wireline systems. d) Mobile computing is spreading rapidly, replacing or supplementing wired computing.

Ans: b Difficulty: Hard Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB: Use of Information Technology

3. Which of the following most accurately describes m-commerce? a) It is e-commerce via Web 2.0. b) It is a natural extension of e-business. c) It is any B2B that is done over the Internet or an extranet. d) It is the use of handheld devices to access the Internet.

Ans: b

Difficulty: Medium Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB: Use of Information Technology

4. What is a satellite-based tracking system that is used to determine the location of a person or physical item? a) GPS b) SMS c) WAP d) WiMax Ans: a Difficulty: Easy Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB: Use of Information Technology

5. What is the technology for sending short text messages on cell phones? a) EMS b) GPS c) MMS d) SMS Ans: d Difficulty: Easy Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB: Use of Information Technology

6. What is the wireless broadband technology based on the IEEE 802.16-2004 standard, designed to provide Internet access across metro areas to fixed users? a) WAP b) Wi-Fi c) WiMax d) WLAN Ans: c Difficulty: Medium

Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB: Use of Information Technology

7. What is the technology that enables Internet browsing from wireless devices? a) WAP b) EMS c) WiMax d) WLAN Ans: a Difficulty: Medium Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB: Use of Information Technology

8. Which of the following most accurately and comprehensively captures the key attributes driving the development of m-commerce? a) mobile devices, convenience, and localization of products and services b) ubiquity, convenience, and personalization c) ubiquity, convenience, instant connectivity, personalization, and localization of products and services d) ubiquity, asynchronous connectivity, personalization, and localization of products and services Ans: c Difficulty: Medium Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB:

9. Which of the following has not been one of the driving factors in the development of mobile computing and m-commerce? a) bandwidth improvement b) elimination of potential health hazards c) no need for a PC d) declining price of wireless devices Ans: b Difficulty: Medium

Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB:

10. All of the following have supported the growth of mobile computing and m-commerce except: a) Widespread use of smart phones and other wireless devices. b) Greater profitability from m-commerce than from e-commerce. c) The social phenomenon known as the handset culture, especially among the 15-to-25-year-old age group, combined with their increasing purchasing power. d) 3G technology providing the necessary bandwidth.

Ans: b Difficulty: Medium Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB: Reflective thinking

11. Which of the following is not a revenue model of m-commerce? a) access fees b) advertising c) payment clearing d) portals Ans: d Difficulty: Medium Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB: Use of Information Technology

12. What have been the barriers to commercial Wi-Fi growth? a) cost b) availability c) cost and security d) cost, security, and availability Ans: c Difficulty: Hard Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology

AACSB:

13. What is a piece of software that stores an online shopper’s credit card numbers and other personal information so that the shopper does not have to reenter that information for every online purchase? a) e-wallet b) micropayment c) cookie d) pop up Ans: a Difficulty: Medium Section Ref: 7.2 Mobile Applications in Financial Services AACSB:

14. The most significant barriers to the adoption of online mobile payments are the limited availability of micropayments alternatives and _____________. a) lack of interest by potential customers b) privacy regulations c) insufficient bandwidth d) transaction costs charged by mobile carriers Ans: d Difficulty: Medium Section Ref: 7.2 Mobile Applications in Financial Services AACSB: Use of Information Technology

15. M-commerce B2C applications are concentrated in three major areas, which include each of the following except: a) retail shopping for products and services b) advertising c) mobile portals d) selling digitized content such as music, movies, or games Ans: c Difficulty: Medium Section Ref: 7.3 Mobile Shopping, Advertising, and Content-Providing AACSB:

16. What is a practical problem of wearable devices in many countries? a) weather b) telecom networks c) electrical systems d) size Ans: a Difficulty: Medium Section Ref: 7.4 Mobile Enterprise and Interbusiness Applications AACSB:

17. In the large CRM software suites, the two CRM functions that have attracted the most interest are: a) inventory management and order fulfillment b) sales force automation and field service c) customer service and inventory replenishment d) advertising and forecasting Ans: b Difficulty: Hard Section Ref: 7.4 Mobile Enterprise and Interbusiness Applications AACSB:

18. Nokia has entered the mobile gaming world. It markets near-distance multiplayer gaming over __________ and wide-area gaming over __________ networks. a) cellular; local area b) Bluetooth; cellular c) GPS; wide area d) WiMax; analog Ans: b Difficulty: Hard Section Ref: 7.5 Mobile Consumer Services and Entertainment AACSB:

19. The Highway 91 Project in Los Angeles is an example of a(n) __________ application. a) WiFi b) Internet c) non-Internet mobile computing

d) mobile government Ans: c Difficulty: Medium Section Ref: 7.5 Mobile Consumer Services and Entertainment AACSB:

20. One example of an integrated messaging system is __________, which combines wireless communications, vehicle monitoring systems, and vehicle location devices. a) collaborative commerce b) supply chain management c) voice portal d) wireless telemetry Ans: d Difficulty: Medium Section Ref: 7.6 Location-Based Services and Commerce AACSB:

21. In general, which of the following is true about the transmission of confidential and personal information between an RFID reader and a back-end database protect? a) Those transmissions are sent over secure networks to keep the information secure. b) Information sent via those transmissions is protected using encryption. c) RFID tags do not yet contain confidential or personal information. d) Firewalls are used to protect information in transit.

Ans: b Difficulty: Medium Section Ref: 7.7 Pervasive Computing, Context Awareness, and RFID AACSB: Ethical and legal responsibilities in organizations and society

22. Northeast Utilities, which supplies energy products and services to 1.2 million customers from Maine to Maryland, embarked on a wireless project in 1995 in which its field inspectors used wireless devices to track spills of hazardous material and report them to headquarters in real time. After spending a year and a half and $1 million, the lessons learned from their experiences include all of the following except: a) Do not start without appropriate infrastructure. b) Users must be involved. c) Do not use a small pilot for experimentation.

d) Wireless is a different communication medium; and people are not used to the wireless paradigm.

Ans: c Difficulty: Medium Section Ref: 7.8 Managerial Issues AACSB: Reflective thinking

23. In ___________, the computer captures variables about the user and the environment to better understand what the consumer needs, and what products or services he or she might possibly be interested and then provides various services to users in real time. a) RFID b) pervasive computing c) context-aware computing d) telematics Ans: c Difficulty: Medium Section Ref: 7.7 Pervasive Computing, Context Awareness, and RFID AACSB: Use of Information Technology

True/False

24. The characteristics of mobile computing are mobility and reach, which provide ubiquity, convenience, instant connectivity, personalization, and product and service localization.

Ans: True Difficulty: Easy Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB: Use of Information Technology

25. Mobile computing and m-commerce require mobile devices such as PDAs and cell phones, software, and wireless technologies. For l-commerce, a GPS receiver is also needed.

Ans: True Difficulty: Medium Section Ref: 7.6 Location-Based Services and Commerce

AACSB:

26. Location-based advertising via GPSs on a very large scale is predicted.

Ans: False Difficulty: Medium Section Ref: 7.6 Location-Based Services and Commerce AACSB: Use of Information Technology

27. Most non-Internet applications, such as shopping from vending machines and gas pumps, involve various types of RFID cards.

Ans: False Difficulty: Medium Section Ref: 7.7 Pervasive Computing, Context Awareness, and RFID AACSB: Use of Information Technology

28. In embedded computing, the computer captures contextual data of the user and the user’s environment and then provides various services in real time.

Ans: False Difficulty: Medium Section Ref: 7.7 Pervasive Computing, Context Awareness, and RFID AACSB:

29. Major limitations of mobile computing are small screens on mobile devices, limited bandwidth, high cost, unproven security, and possible health hazards.

Ans: True Difficulty: Medium Section Ref: 7.8 Managerial Issues AACSB:

30. Using wireless technologies, one can create applications that are not available with wireline systems.

Ans: True Difficulty: Medium Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB: Use of Information Technology

31. Bluetooth is a wireless standard designed for temporary, short-range data and voice connections among mobile devices.

Ans: True Difficulty: Medium Section Ref: 7.4 Mobile Enterprise and Interbusiness Applications AACSB:

32. WLAN is a wireless technology that provides Internet access across metro areas to mobile users.

Ans: False Difficulty: Medium Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB: Use of Information Technology

33. With localization and personalization capabilities, advertising can be targeted so that users get messages that depend both on where they are and their preferences.

Ans: True Difficulty: Medium Section Ref: 7.3 Mobile Shopping, Advertising, and Content-Providing AACSB: Use of Information Technology

34. A WAP provides service to a large number of users across a large geographical area known as a hotspot.

Ans: False Difficulty: Medium Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology

AACSB: Use of Information Technology

35. M-commerce B2C applications are concentrated in three major areas: retail shopping for products and services; auctions; and providing content such as music, news, and games for a fee via portals.

Ans: False Difficulty: Medium Section Ref: 7.3 Mobile Shopping, Advertising, and Content-Providing AACSB: Reflective thinking

36. A mobile portal is a customer channel, optimized for mobility that aggregates and provides content and services for mobile users. These portals offer services similar to desktop portals such as AOL, Yahoo! and MSN. Ans: True Difficulty: Medium Section Ref: 7.3 Mobile Shopping, Advertising, and Content-Providing AACSB: Use of Information Technology

37. An example of a mobile enterprise application is sales force automation (SFA), which enables sales force employees to type orders straight into an ERP while at a client’s site. Benefits include a reduction in clerical mistakes and improved supply chain operations.

Ans: True Difficulty: Medium Section Ref: 7.4 Mobile Enterprise and Interbusiness Applications AACSB: Use of Information Technology

Short Answer

38. _________ is any e-business done in a wireless environment, especially via the Internet.

Ans: M-commerce Difficulty: Easy

Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB: Use of Information Technology

39. _________ is a wireless chip technology standard designed for temporary, short-range data or voice connection among mobile devices.

Ans: Bluetooth Difficulty: Medium Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB: Use of Information Technology

40. _________ is a wireless technology based on the 802.16 standard, designed to provide Internet access across metro areas to fixed-location users.

Ans: WiMax Difficulty: Medium Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB: Use of Information Technology

41. The 3G technology helps provide the necessary ___________ for m-commerce.

Ans: bandwidth Difficulty: Medium Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB:

42. Most WLANs run on the 802.11b standard, which is called _________ .

Ans: Wi-Fi Difficulty: Medium Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB:

43. A(n) _________ is an Internet-enabled cell phone.

Ans: smartphone Difficulty: Easy Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB: Use of Information Technology

44. A smart phone or a PDA offers _______________, which is the ability to provide both realtime information and communication, independent of the user’s location.

Ans: ubiquity Difficulty: Medium Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB:

45. A(n) _________ is a customer channel, optimized for mobility, that aggregates and provides content and services for mobile users.

Ans: mobile portal Difficulty: Medium Section Ref: 7.3 Mobile Shopping, Advertising, and Content-Providing AACSB:

46. A(n) _________ is a Web site with an audio interface.

Ans: voice portal Difficulty: Easy Section Ref: 7.3 Mobile Shopping, Advertising, and Content-Providing AACSB:

47. _________ is social networking among individuals of similar interests using mobile devices Ans: Mobile social networking Difficulty: Easy

Section Ref: 7.5 Mobile Consumer Services and Entertainment AACSB:

48. _________ refers to the delivery of advertisements, products, or services to customers whose locations are known at a given time.

Ans: Location-based commerce (L-commerce) Difficulty: Medium Section Ref: 7.6 Location-Based Services and Commerce AACSB: Use of Information Technology

49. Imagine that you are walking near a Starbucks store, but you do not even know that one is there. Suddenly your cell phone beeps with a message “Come inside for a latte.” This is an example of ________.

Ans: location-based advertising.

Difficulty: Medium Section Ref: 7.6 Location-Based Services and Commerce AACSB:

50. Contextual computing and context awareness are viewed as a major potential cornerstone of _________.

Ans: m-commerce Difficulty: Medium Section Ref: p. 246 AACSB: Use of Information Technology

Essay

51. Identify and briefly explain the five value-added attributes that drive the development of mcommerce: ubiquity, convenience, instant connectivity, personalization, and localization of products and services.

Ans: Ubiquity refers to the attribute of being available at any location at any given time.

Convenience. It is very convenient for users to operate in the wireless environment. All they need is an Internet-enabled mobile device such as a smart phone.

Instant Connectivity. Mobile devices enable users to connect easily and quickly to the Internet, intranets, other mobile devices, and databases. Thus, wireless devices could become the preferred way to access information.

Personalization refers to the preparation of customized information for individual consumers.

Localization of Products and Services. Knowing where the user is physically located at any particular moment is key to offering relevant products and services. E-commerce applications based on localization of products and services are known as location-based e-commerce or lcommerce.

Difficulty: Medium Section Ref: 7.1 Overview of Mobile Computing and Commerce: Attributes, Benefits, Drivers, and Basic Technology AACSB: Use of Information Technology

52. Identify three ways wireless or mobile technologies can support marketing or operations of an enterprise.

Ans: Examples of how wireless applications can be used to support enterprise applications include: Support salespeople while they are visiting customers.

Support field employees doing repairs or maintenance on corporate premises or for clients.

Support traveling (or off-corporate-site) executives, managers, or other employees Support employees while they do work inside the enterprise.

Difficulty: Medium Section Ref: 7.4 Mobile Enterprise and Interbusiness Applications AACSB: Use of Information Technology

53. Discuss privacy issues and risks associated with RFID. Ans: Several advocacy groups raised objections to the use of RFID, citing privacy concerns.

Several states started legislation that aims to protect privacy. Privacy concerns are frequently addressed by controlling access to the database that links the tag to individual information, and more narrowly restricting the uses of RFID to those areas of concern.

A major privacy concern is that when individual items are tagged, and they are taken by customers out of stores, it might be possible to track the movements of the customer (remote surveillance). Therefore, some recommend that the tags be removed before a sale is recorded. This increases the cost to the store. Tracking customers is currently very difficult since the readers have a very limited range from which they can be read. In contrast, if a person. Since its introduction in the late 1990s, several advocacy groups raised objections to the use of RFID, citing privacy concerns.

Several states started legislation that aims to protect privacy. Privacy concerns are frequently addressed by controlling access to the database that links the tag to individual information, and more narrowly restricting the uses of RFID to those areas of concern.

A major privacy concern is that when individual items are tagged, and they are taken by customers out of stores, it might be possible to track the movements of the customer (remote surveillance). Therefore, some recommend that the tags be removed before a sale is recorded.

This increases the cost to the store. Tracking customers is currently very difficult since the readers have a very limited range from which they can be read.

Difficulty: Medium Section Ref: 7.7 Pervasive Computing, Context Awareness, and RFID AACSB: Ethical and legal responsibilities in organizations and society

Chapter: Chapter 08: Social Networks and the Web 2.0 Environment

Multiple Choice

1. Social networking and the use of Web 2.0 tools can improve enterprise performance mostly through each of the following except: a) information sharing b) data analysis c) collaboration d) aggregation of the wisdom of individuals Ans: b Difficulty: Medium Section Ref: Chapter 8 Introduction AACSB:

2. Web 1.0 was basically organized around each of the following except: a) corporations b) media c) software d) technology Ans: b Difficulty: Medium Section Ref: 8.1 The Web 2.0 Revolution, Social Media, and Industry Disruptors AACSB:

3. Web 2.0 is fundamentally organized around: a) data and collaboration b) education and research c) people and services d) portals and networks Ans: c Difficulty: Medium Section Ref: 8.1 The Web 2.0 Revolution, Social Media, and Industry Disruptors AACSB: Reflective thinking

4. What is Web 2.0? a) The popular term for advanced Internet technology and applications including blogs, wikis, RSS, and social bookmarking. b) A term used to describe the future of the World Wide Web. c) A user defined 3D world in which people can interact, play, and do business. d) Groups of people with similar interests who interact with one another using the Internet.

Ans: a Difficulty: Medium Section Ref: 8.1 The Web 2.0 Revolution, Social Media, and Industry Disruptors AACSB: Use of information technology

5. What is Web 3.0? a) The popular term for advanced Internet technology and applications including blogs, wikis, RSS, and social bookmarking. b) A term used to describe the future of the World Wide Web. c) A user defined 3D world in which people can interact, play, and do business. d) Groups of people with similar interests who interact with one another using the Internet.

Ans: b Difficulty: Medium Section Ref: 8.7 The Future: Web 3.0 AACSB:

6. What is a virtual world? a) The popular term for advanced Internet technology and applications including blogs, wikis, RSS, and social bookmarking. b) A term used to describe the future of the World Wide Web. c) A user defined 3D world in which people can interact, play, and do business. d) Groups of people with similar interests who interact with one another using the Internet.

Ans: c Difficulty: Medium Section Ref: 8.2 Virtual Communities and Virtual Worlds AACSB: Use of information technology

7. What are virtual communities?

a) The popular term for advanced Internet technology and applications including blogs, wikis, RSS, and social bookmarking. b) A term used to describe the future of the World Wide Web. c) A user defined 3D world in which people can interact, play, and do business. d) Groups of people with similar interests who interact with one another using the Internet.

Ans: d Difficulty: Medium Section Ref: 8.2 Virtual Communities and Virtual Worlds AACSB:

8. All of the following describe social media except: a) They refer to the online platforms and tools that people use to share opinions and experiences with each other. b) They are a powerful centralizing force. c) They can take many different forms including text, images, audio, or video clips. d) The key is that people control and use them rather than the enterprises.

Ans: b Difficulty: Medium Section Ref: 8.1 The Web 2.0 Revolution, Social Media, and Industry Disruptors AACSB: Use of information technology

9. Which company was not one of the major industry or market disruptors? a) Amazon.com b) Blue Nile c) Federal Express d) ZOPA Ans: c Difficulty: Hard Section Ref: 8.1 The Web 2.0 Revolution, Social Media, and Industry Disruptors AACSB: Reflective thinking

10. The mass adoption of social networking Web sites points to an evolution in __________. a) advertising b) human social interaction c) search engine capabilities d) Web 3.0

Ans: b Difficulty: Medium Section Ref: 8.3 Online Social Networking: Basics and Examples AACSB:

11. __________ is a community-based popularity Web site with an emphasis on technology and science articles and which has expanded to include politics and videos. a) 2nd Life b) Digg c) Friendster d) Xanga Ans: b Difficulty: Medium Section Ref: 8.3 Online Social Networking: Basics and Examples AACSB:

12. Bebo, MySpace, and YouTube were acquired by media conglomerates for enormous sums of money _________. a) despite possessing mostly intangible property b) to consolidate the social networks. c) to penetrate international markets d) to insure security and privacy of the members Ans: a Difficulty: Hard Section Ref: 8.3 Online Social Networking: Basics and Examples AACSB: Use of information technology

13. Characteristics or issues of Orkut include all of the following except: a) A major highlight is the individual power of those who create their own groups or communities on the site. b) The lack of autonomy over who can join and edit posts has limited its popularity in the United States. c) Users get substantial experience with Web 2.0 tools gaining online proficiency. d) Cultural objections have created controversy for Orkut in various parts of the world forcing them to make moral decisions about what the rights and responsibilities of a social networking site.

Ans: b

Difficulty: Medium Section Ref: 8.4 Major Social Network Services: From Facebook to Flickr AACSB: Use of information technology

14. When does business networking function best? a) when individuals offer to help others find connections b) when individuals call on prospects themselves c) when it is used to list jobs and job seekers’ resumes. d) a and b Ans: a Difficulty: Hard Section Ref: 8.5 Business (Enterprise) Social Networks AACSB: Reflective thinking

15. What is a function provided by entrepreneurial networks? a) Bring together professionals and resources that complement each others’ endeavors. b) Provide motivation, direction, and increased access to opportunities. c) Help obtain financial resources tailored to the membership demographic. d) All of the above Ans: d Difficulty: Medium Section Ref: 8.5 Business (Enterprise) Social Networks AACSB:

16. Ways in which enterprises can interface with social networking to create an enterprise social network include all of the following except: a) Use existing social networks such as Facebook; or virtual worlds such as Second Life. b) Create an in-house social network and then use it for communication and collaboration. c) Conduct business-oriented activities in a social network. d) Outsource development of avatars.

Ans: d Difficulty: Medium Section Ref: 8.5 Business (Enterprise) Social Networks AACSB:

17. Reasons why social networks, blogging, and other Web 2.0 activities will play a major future role in e-commerce include all of the following except: a) They attract a huge number of visitors. b) Many of them cater to a specific segment of the population. c) A large proportion of visitors is older with money to spend. d) They provide an opportunity for vendors to advertise and sell to members.

Ans: c Difficulty: Medium Section Ref: 8.6 Commercial Aspects of Web 2.0, Social Networks AACSB: Critical thinking

18. Some people think that Google paid too much for _________ because of their copyrightrelated legal problems. a) YouTube b) Craigslist c) MySpace d) Facebook Ans: a Difficulty: Easy Section Ref: 8.6 Commercial Aspects of Web 2.0, Social Networks AACSB:

19. Viral marketing have proven to be very effective _____________ advertising. a) enterprise b) focus group c) social d) word-of-mouth Ans: d Difficulty: Easy Section Ref: 8.6 Commercial Aspects of Web 2.0, Social Networks AACSB: Use of information technology

20. __________ is valuable because companies are interested not only in collecting information, but also in interaction between customers and employees. a) Enterprise feedback management b) Presence awareness c) Viral blogging

d) Viral marketing Ans: a Difficulty: Medium Section Ref: 8.6 Commercial Aspects of Web 2.0, Social Networks AACSB:

21. Web 3.0 will deliver a new generation of business applications that provide all of the following except: a) Faster, far-flung connectivity; richer ways of interacting. b) More uses of 2D. c) New artificial intelligence applications. d) More portable and personal applications.

Ans: b Difficulty: Medium Section Ref: 8.7 The Future: Web 3.0 AACSB:

True/False

22. Wikipedia’s greatest weakness is its user-created content that may have been posted by people who lack expertise in the topic or have a malicious agenda.

Ans: True Difficulty: Medium Section Ref: Chapter 8 Introduction AACSB: Reflective thinking

23. Many believe that companies that understand new applications and technologies—and apply the benefits early on—stand to greatly improve internal business processes and marketing.

Ans: True Difficulty: Medium Section Ref: 8.1 The Web 2.0 Revolution, Social Media, and Industry Disruptors AACSB: Use of information technology

24. Web 1.0 has all the hallmarks of youthful rebellion against the conventional social order and is worrying many traditional media companies.

Ans: False Difficulty: Easy Section Ref: 8.1 The Web 2.0 Revolution, Social Media, and Industry Disruptors AACSB: Reflective thinking

25. Many believe that companies that understand new Web 2.0 applications and technologies, and apply the benefits early, stand to greatly improve internal business processes and marketing Ans: True Difficulty: Medium Section Ref: 8.1 The Web 2.0 Revolution, Social Media, and Industry Disruptors AACSB: Critical thinking

26. Making data available in new or never-intended ways, Web 2.0 data can be remixed or “mashed up,” often through Web-service interfaces, much the way a DJ mixes music.

Ans: True Difficulty: Medium Section Ref: 8.1 The Web 2.0 Revolution, Social Media, and Industry Disruptors AACSB: Use of information technology

27. The virtual elimination of software-upgrade cycles makes applications perpetual works-inprogress and allows rapid prototyping using the Web as a platform.

Ans: True Difficulty: Medium Section Ref: 8.1 The Web 2.0 Revolution, Social Media, and Industry Disruptors AACSB: Use of information technology

28. Disruptors are interactive technologies that introduce significant changes in business or government operations.

Ans: False Difficulty: Medium

Section Ref: 8.1 The Web 2.0 Revolution, Social Media, and Industry Disruptors AACSB: Reflective thinking

29. A virtual world is a user-defined 3-D world in which people can interact, play, and do business with the help of avatars.

Ans: True Difficulty: Medium Section Ref: 8.2 Virtual Communities and Virtual Worlds AACSB:

30. Hosting companies such as Second Life function more as platforms than as supporters of games.

Ans: True Difficulty: Medium Section Ref: 8.2 Virtual Communities and Virtual Worlds AACSB:

31. Social network analysis (SNA) is the mapping and measuring of relationships and flows between people or groups. Nodes in the network are the people or groups, while the links show relationships or flows between the nodes.

Ans: True Difficulty: Medium Section Ref: 8.3 Online Social Networking: Basics and Examples AACSB: Use of information technology

32. A primary reason that Facebook expands is the network effect, which is the concept whereby more users mean more value.

Ans: True Difficulty: Medium Section Ref: 8.4 Major Social Network Services: From Facebook to Flickr AACSB: Ethical understanding and reasoning abilities\

33. Bebo was acquired by Google for $100 million in March 2008. This places the site alongside MySpace and YouTube that were acquired by media conglomerates for enormous sums of money despite possessing mostly intangible property.

Ans: False Difficulty: Easy Section Ref: 8.4 Major Social Network Services: From Facebook to Flickr AACSB:

34. Application Program Interface (API) services are the hosted services that have powered Web 2.0 and that will become the engines of Web 3.0.

Ans: True Difficulty: Medium Section Ref: 8.7 The Future: Web 3.0 AACSB:

Short Answer

35. __________ is the popular term for advanced Internet technology and applications including blogs, wikis, RSS, and social networks.

Ans: Web 2.0 Difficulty: Easy Section Ref: 8.1 The Web 2.0 Revolution, Social Media, and Industry Disruptors AACSB: Use of information technology

36. Online platforms and tools known as __________ are a powerful democratization force because their network structure enables communication and collaboration on a massive scale.

Ans: Social media Difficulty: Medium Section Ref: 8.1 The Web 2.0 Revolution, Social Media, and Industry Disruptors AACSB: Use of information technology

37. Companies that introduce significant change into their industries or business operations are referred to as _________.

Ans: disruptors Difficulty: Easy Section Ref: 8.1 The Web 2.0 Revolution, Social Media, and Industry Disruptors AACSB: Use of information technology

38. A(n) _________ is a group of people with similar interests who interact with one another using the Internet.

Ans: virtual (Internet) community Difficulty: Medium Section Ref: 8.2 Virtual Communities and Virtual Worlds AACSB: Use of information technology

39. A(n) _________ is a user-defined 3-D world in which people can interact, play, and do business with the help of avatars Ans: virtual world Difficulty: Medium Section Ref: 8.2 Virtual Communities and Virtual Worlds AACSB: Use of information technology

40. In 2003, a 3-dimensional virtual world called _________ was opened to the public. The world is entirely built and owned by its residents.

Ans: Second Life Difficulty: Medium Section Ref: 8.2 Virtual Communities and Virtual Worlds AACSB: Ethical and legal responsibilities in organizations and society

41. A(n) _________ is a Web-based service that uses software to build online social networks for communities of people who share interests and activities or who are interested in exploring the interests and activities of others.

Ans: Social network service (SNS)

Difficulty: Easy Section Ref: 8.3 Online Social Networking: Basics and Examples AACSB:

42. The social network named _____________ is based on the Circle of Friends technique for networking individuals in virtual communities and demonstrates the small-world phenomenon.

Ans: Friendster Difficulty: Easy Section Ref: 8.3 Online Social Networking: Basics and Examples AACSB: Use of information technology

43. The nature of the Web allows for__________, which can convey negative comments and blasphemy as well. This is not a cherished value in several foreign governments and cultures.

Ans: freedom of expression Difficulty: Hard Section Ref: 8.4 Major Social Network Services: From Facebook to Flickr AACSB: Use of information technology

44. A primary reason that Facebook expands is the network effect, which means that more users mean _________.

Ans: more value Difficulty: Easy Section Ref: 8.4 Major Social Network Services: From Facebook to Flickr AACSB:

45. A(n) ________is group of people that have some kind of commercial relationship. An example would be the relationships between sellers and buyers.

Ans: business network Difficulty: Easy Section Ref: 8.5 Business (Enterprise) Social Networks AACSB:

46. Technologies and business practices that provide business managers with access to the right information at the right time through inter-connected applications, services, and devices are referred to as _________.

Ans: Enterprise 2.0 Difficulty: Medium Section Ref: 8.5 Business (Enterprise) Social Networks AACSB: Use of information technology

47. A(n) _________ is a Web-based service that uses software to build online social networks for communities of people who share interests and activities or who are interested in exploring the interests and activities of others.

Ans: Social network service (SNS) Difficulty: Medium Section Ref: 8.6 Commercial Aspects of Web 2.0, Social Networks AACSB: Use of information technology

Essay

48. Discuss three important ways in which retailers can benefit from online communities.

Ans: 1. Consumers can be a source of feedback on existing product features and new product design and features on marketing and advertising campaigns, and how well customer service and support are performing, which can lead to innovation for a retailer.

2. Word-of-mouth (viral marketing) is free advertising that increases the visibility of retailers and their products.

3. Increased Web site traffic brings in more sales and ad dollars.

4. Increased sales can come from harnessing techniques based on personal preferences such as collaborative filtering; at a more advanced level, retailers strive for a higher degree of relevance in matching the knowledge of one person to someone of like interests who has a need to know.

Difficulty: Medium Section Ref: 8.6 Commercial Aspects of Web 2.0, Social Networks AACSB: Critical thinking

49. What business opportunities or operations do virtual communities create or support?

Ans: Virtual communities create new types of business opportunities. People with similar interests that congregate at one Web site are a natural target for advertisers and marketers. Using chat rooms, members can exchange opinions about certain products and services. Of special interest are communities of transactions, whose interest is the promotion of commercial buying and selling. Virtual communities can foster customer loyalty—increase sales of related vendors that sponsor communities and facilitate customer feedback for improved service and business.

Difficulty: Hard Section Ref: 8.2 Virtual Communities and Virtual Worlds; 8.6 Commercial Aspects of Web 2.0, Social Networks AACSB: Use of information technology

50. What risks are enterprises exposed to when they open up their marketing and advertising to social networks?

Ans: There are some risks involved in opening up your marketing and advertising to the less controlled social networks. For example, aligning a product or company with such sites where content is user-generated and often not edited or filtered has its downsides. A company needs to be willing to have negative reviews and feedback. If your company has really positive customer relationships and strong feedback, and you are willing to have customers share the good, the bad, and the ugly, you are a good candidate. If you worry about what your customers would say if they were alone in a room with your prospects—your product or business might not be ready to use Web 2.0.

Difficulty: Hard Section Ref: 8.6 Commercial Aspects of Web 2.0, Social Networks AACSB: Ethical and legal responsibilities in organizations and society

Chapter: Chapter 09: Transaction Processing, Functional Applications, and Integration

Multiple Choice

1. The accuracy of data in a TPS is critical to an enterprise’s information systems for all of the following reasons except: a) Functional ISs get much of their data from the TPS. b) BI, EC, CRM and other enterprise applications use data from the TPS. c) Data mistakes only get detected by the accounting ISs. d) Integration among functional ISs and enterprise applications means that errors in the TPS can lead to errors throughout the organization.

Ans: c Difficulty: Medium Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB: Critical thinking

2. Which of the following does not describe traditionally-designed ISs? a) IS were designed within each functional area. b) The flow of work and information between different departments worked well. c) ISs were designed to support each functional area by increasing its internal effectiveness and efficiency. d) ISs did not support certain business processes.

Ans: b Difficulty: Medium Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB: Use of Information Technology

3. Functional information systems share all of the following characteristics except: a) Do not interface with enterprise-wide systems, such as ERP. b) Consist of several smaller ISs that support specific activities performed in the functional area. c) Integrated to form a coherent departmental functional system, or can be completely independent. d) Support operational, managerial, and strategic organizational activities.

Ans: a Difficulty: Hard

Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB:

4. Which of the following is not a characteristic of a TPS? a) Monitors, collects, stores, processes, and disseminates information for routine core business transactions. b) Provides critical data to e-commerce, especially data on customers and their purchasing history. c) Provides all the information needed by law or by organizational policies to keep the business running properly and efficiently. d) Processes large amounts of data mostly from external sources.

Ans: d Difficulty: Medium Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB: Use of Information Technology

5. Generally speaking, why do organizations try to automate TPS data entry as much as possible? a) Because of high computational complexity. b) Because of the large volume of data involved. c) To keep the data private and secure. d) To reduce labor costs.

Ans: b Difficulty: Medium Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB: Reflective thinking

6. The TPS failure at TIAA-CREF, a major financial institution, showed that: a) TPS failure can cause a disaster. b) TPS failure can disrupt online customer service. c) TPS failure can have no impact on information processing d) A hot-site backup system can prevent a disaster.

Ans: a Difficulty: Medium Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB: Critical thinking

7. The production and operations management (POM) function in an organization is responsible for: a) Records of all accounts to be paid and those owed by customers. b) The processes that transform inputs into useful outputs. c) Transaction records of all items sent or received, including returns. d) Reports on compliance with government regulations and taxes.

Ans: b Difficulty: Medium Section Ref: 9.2 Managing Production/Operations and Logistics AACSB: Use of Information Technology

8. The objective of inventory management systems is to minimize the total costs of all of the following except: a) maintaining inventories b) ordering inventory c) not having inventory when needed d) stolen or misplaced inventory Ans: d Difficulty: Hard Section Ref: 9.2 Managing Production/Operations and Logistics AACSB: Use of Information Technology

9. How is quality-control data collected? a) using Web-based sensors b) using RFIDs c) using Six Sigma d) a and b Ans: d Difficulty: Hard Section Ref: 9.2 Managing Production/Operations and Logistics AACSB:

10. What is the approach that attempts to minimize waste of space, labor, materials, energy, and so on and to continuously improve processes and systems? a) POM b) ERP

c) JIT d) CIM Ans: c Difficulty: Medium Section Ref: 9.2 Managing Production/Operations and Logistics AACSB: Use of Information Technology

11. IT support of project management is needed for all of the following reasons except: a) Uncertainty exists due to the generally long completion times for projects. b) Most projects are routine undertakings, and participants have prior experience in the area. c) There can be significant participation of outsiders in projects, which is difficult to control. d) The many interrelated activities make changes in project planning and scheduling difficult.

Ans: b Difficulty: Hard Section Ref: 9.2 Managing Production/Operations and Logistics AACSB: Critical thinking

12. What is a concept or philosophy that promotes the integration of various computerized factory systems? a) POM b) ERP c) JIT d) CIM Ans: d Difficulty: Medium Section Ref: 9.2 Managing Production/Operations and Logistics AACSB: Use of Information Technology

13. Which of the following is not a basic goal of CIM? a) Simplification of all manufacturing technologies and techniques. b) Automation of as many of the manufacturing processes as possible. c) Streamlining online activities across the supply chain. d) Integration and coordination of all aspects of design, manufacturing, and related functions via computer hardware and software.

Ans: c Difficulty: Medium

Section Ref: 9.2 Managing Production/Operations and Logistics AACSB:

14. ___________ are all the systems involved in the process of getting a product or service to customers and dealing with all customers' needs. a) Channel systems b) Delivery systems c) Outbound logistics systems d) Sales systems Ans: a Difficulty: Medium Section Ref: 9.3 Managing Marketing and Sales Systems AACSB:

15. A strategy, in which the supplier monitors inventory levels and replenishes when needed, is called ____________. a) inventory-on-demand b) stocks-on-demand c) vendor-managed inventory d) virtually-managed inventory Ans: c Difficulty: Medium Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB:

16. Procter & Gamble (P&G) was able to expedite time-to-market of its new product, Whitestrips, using each of the technologies except: a) online questionnaires and research b) data mining c) data warehousing d) project management Ans: d Difficulty: Medium Section Ref: 9.3 Managing Marketing and Sales Systems AACSB:

17. A major reason small companies go out of business is _________. a) inaccurate cash flow projection b) poor customer service c) inaccurate inventory projection and management d) insufficient marketing activities Ans: a Difficulty: Medium Section Ref: 9.4 Managing Accounting and Finance Systems AACSB:

18. All of the following are characteristics of XBRL, or extensible business reporting language, except: a) With XBRL all the company’s financial data are collected, consolidated, published, and consumed without the need to use Excel spreadsheets. b) XBRL is now a U.S. standard for electronic transmission of business and financial information. c) XBRL can help banks generate cleaner data, including written explanations and supporting notes. d) XBRL allows government analysts to validate information submitted in hours instead of weeks.

Ans: b Difficulty: Medium Section Ref: 9.4 Managing Accounting and Finance Systems AACSB:

19. Benefits of Web-based human resources information systems (HRISs) include all of the following except: a) eliminates problems finding qualified people, especially engineers and salespeople. b) lower cost to advertise job openings and recruit c) release of HR staff from intermediary roles. d) more efficient online training and performance evaluations.

Ans: a Difficulty: Medium Section Ref: 9.5 Managing Human Resources Systems AACSB:

20. In their effort to streamline Human Resources processes and to better manage employees, companies are developing web applications referred to as _____________. a) asset capital management b) economic risk management c) employee relationship management d) labor relations information systems Ans: c Difficulty: Medium Section Ref: 9.5 Managing Human Resources Systems AACSB:

21. All of the following describe issues related to systems integration except: a) Although functional systems are necessary, they may not be sufficient if they work independently. b) Integrating information systems increases costs, which need to be offset by increased employees’ productivity and improved customer service. c) It is difficult to integrate functional information systems, but there are several approaches to doing so. d) In the future, Web Services could solve many integration problems, including connecting to a legacy system.

Ans: b Difficulty: Medium Section Ref: 9.6 Integrating Functional Information Systems AACSB:

True/False

22. When the flow of work and information between departments does not work well, it results in delays, poor customer service, or higher costs.

Ans: True Difficulty: Easy Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB: Use of Information Technology

23. The backbone of most information systems applications is the general ledger, which keeps track of the routine, mission-central operations of the organization.

Ans: False Difficulty: Medium Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB: Use of Information Technology

24. Logistics systems deal with topics such as investment management, financing operations, raising capital, risk analysis, and credit approval.

Ans: False Difficulty: Easy Section Ref: 9.2 Managing Production/Operations and Logistics AACSB:

25. Accounting information systems also cover many non-TPS applications in areas such as cost control, taxation, and auditing.

Ans: True Difficulty: Medium Section Ref: 9.4 Managing Accounting and Finance Systems AACSB: Use of Information Technology

26. Web-based human resource systems are extremely useful for recruiting and training.

Ans: True Difficulty: Medium Section Ref: 9.5 Managing Human Resources Systems AACSB: Use of Information Technology

27. Compliance can be very time consuming and expensive, especially resulting from the Sarbanes-Oxley Act. Using software makes it possible to expedite the process and eliminate errors.

Ans: True Difficulty: Easy Section Ref: 9.4 Managing Accounting and Finance Systems

AACSB: Reflective thinking

28. The primary goal of production and operations management (POM) is to provide all the information needed by law and/or by organizational policies to keep the business running properly and efficiently.

Ans: False Difficulty: Medium Section Ref: 9.2 Managing Production/Operations and Logistics AACSB:

29. To efficiently handle high volume, avoid errors, be able to handle large variations in volume during peak times, avoid downtime, never lose results, and maintain privacy and security, TPSs are automated.

Ans: True Difficulty: Medium Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB: Use of Information Technology

30. Data is processed in one of three ways: batch, online, and real time.

Ans: False Difficulty: Medium Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB: Use of Information Technology

31. Transactions such as making an airline reservation or paying for an item at a POS terminal in a store are processed in batch mode.

Ans: False Difficulty: Medium Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB: Reflective thinking

32. With Web technologies, such as portals and extranets, suppliers can look at the firm’s inventory level or production schedule in real time.

Ans: True Difficulty: Medium Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB: Reflective thinking

33. The fast and effective processing of orders for goods or services that flow from customers to a company by phone, on paper, or electronically is recognized as a key to customer satisfaction.

Ans: True Difficulty: Medium Section Ref: 9.3 Managing Marketing and Sales Systems AACSB: Use of Information Technology

34. The objective of IS-support of inventory management is to insure sufficiently high stock levels to avoid any shortage.

Ans: False Difficulty: Medium Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB: Critical thinking

35. Wal-Mart and many other large companies allow their suppliers to monitor inventory levels and ship when needed, eliminating the need for sending purchasing orders. Such a strategy, in which the supplier monitors inventory levels and replenishes when needed, is called vendormanaged inventory.

Ans: True Difficulty: Medium Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB: Use of Information Technology

36. Intelligent systems can facilitate auditing and fraud detection by finding financial transactions that significantly deviate from previous payment profiles.

Ans: True

Difficulty: Medium Section Ref: 9.4 Managing Accounting and Finance Systems AACSB: Use of Information Technology

37. HRM involves ethical issues in recruiting and selecting employees and in evaluating performance. Since TPS deals with private information about people care must be taken to protect this information and the privacy of employees and customers.

Ans: True Difficulty: Medium Section Ref: 9.5 Managing Human Resources Systems AACSB: Critical thinking

Short Answer

38. In___________ transaction processing, data are processed as soon as the transaction occurs.

Ans: online Difficulty: Medium Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB: Use of Information Technology

39. Many companies allow their suppliers to monitor inventory levels and ship when needed, eliminating the need for sending purchasing orders. Such a strategy, in which the supplier monitors inventory levels and replenishes when needed, is called __________________________ .

Ans: vendor-managed inventory Difficulty: Medium Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB:

40. _________ is an approach that attempts to minimize waste of space, labor, materials, and energy, and to continuously improve processes and systems.

Ans: Just-in-time

Difficulty: Easy Section Ref: 9.2 Managing Production/Operations and Logistics AACSB:

41. A(n) _________ is usually a one-time effort composed of many interrelated activities, costing a substantial amount of money, and lasting for weeks or years.

Ans: project Difficulty: Easy Section Ref: 9.2 Managing Production/Operations and Logistics AACSB:

42. _________ is a concept or philosophy that promotes the integration of various computerized factory systems.

Ans: Computer-integrated manufacturing (CIM) Difficulty: Medium Section Ref: 9.2 Managing Production/Operations and Logistics AACSB: Use of Information Technology

43. In marketing, _________ are all the systems involved in the process of getting a product or service to customers and dealing with all customers’ needs.

Ans: Channel systems Difficulty: Medium Section Ref: 9.3 Managing Marketing and Sales Systems AACSB:

44. _________ is the financing of asset acquisitions, including the disposal of major organizational assets.

Ans: Capital budgeting Difficulty: Easy Section Ref: 9.4 Managing Accounting and Finance Systems AACSB: Use of Information Technology

45. _________ is a programming language and an international standard for electronic transmission of business and financial information.

Ans: XBRL Difficulty: Medium Section Ref: 9.4 Managing Accounting and Finance Systems AACSB: Use of Information Technology

46. To implement online transaction processing, _______ transaction files containing key information about important business entities are placed on hard drives, where they are directly accessible.

Ans: master Difficulty: Medium Section Ref: 9.4 Managing Accounting and Finance Systems AACSB: Use of Information Technology

47. Taxis in Singapore are tracked by a ______________ system, which is based on the 24 satellites originally set up by the U.S. government.

Ans: global positioning Difficulty: Easy Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB:

48. To provide customers with customized products, some manufacturers offer different product configurations or options. This practice is referred to as ____________ .

Ans: mass customization Difficulty: Medium Section Ref: 9.2 Managing Production/Operations and Logistics AACSB: Use of Information Technology

49. The major purpose of __________ is to ensure the accuracy and condition of the financial health of an organization.

Ans: auditing Difficulty: Easy

Section Ref: 9.4 Managing Accounting and Finance Systems AACSB:

50. To build applications that will easily cross functional lines and reach separate databases often requires new approaches such as __________.

Ans: Web Services or integrated suites Difficulty: Hard Section Ref: 9.6 Integrating Functional Information Systems AACSB:

Essay

51. Define web analytics. Describe the web analytics process. Give an example of the information that can be learned from web analytics Ans: Web analytics is the analysis of data to understand visitor behavior on a Web site. Web analytics begins by identifying data that can assess the effectiveness of the site’s goals and objectives. Next, analytics data are collected, such as where site visitors are coming from, what pages they look at and for how long while visiting the site, and how they interact with the site’s information. For example, the data can reveal the impact of an online advertising campaign, the effectiveness of Web site design and navigation, and most important, visitor buying behavior.

Difficulty: Hard Section Ref: 9.1 Functional Information Systems and Transaction Processing Systems AACSB: Use of Information Technology

52. Discuss the advantages provided by just-in-time (JIT) systems.

Ans: JIT is an approach that attempts to minimize waste of many types of waste that occur in the manufacturing process. Those types of waste are: space, labor, materials, energy, and time. For example, if materials and parts arrive at a workstation exactly when needed, there is no need for inventory, there are no delays in production, and there are no idle production facilities or underutilized workers.

Difficulty: Medium Section Ref: 9.2 Managing Production/Operations and Logistics AACSB: Use of Information Technology

53. Identify two methods by which IT can facilitate employee recruitment and the benefits of those methods Ans: Recruitment is finding employees, testing them, and deciding which ones to hire. Webbased recruitment helps reach more candidates faster, which may bring in better applicants. In addition, the costs of online recruitment are lower.

Using screening software, candidates who do not meet the criteria can be eliminated immediately saving managers’ time because of the reduction in the number of interviews conducted. Other features of screening software are ranking of the best candidates to fit an advertised position, tracking of applicants, reporting, and communications.

A more personal approach is available through some of the social networking sites such as LinkedIn, which offer support for companies to locate the best talent for a particular position. In this way, a company looking to recruit the best talent has its job advertised much more widely and may benefit from word-of-mouth recommendations and referrals.

Difficulty: Medium Section Ref: 9.5 Managing Human Resources Systems AACSB: Use of Information Technology

Chapter: Chapter 10: Enterprise Systems: Supply Chains, ERP, CRM, and KM

Multiple Choice

1. What important change did ChevronTexaco make before implementing IT monitoring and support systems that helped increase profitability? a) The company changed its business model from supply driven to demand driven. b) The company collaborated with its largest competitor. c) The company stopped making oil purchases in the higher-priced spot market. d) The company consolidated the three parts of its supply chain.

Ans: a Difficulty: Medium Section Ref: Chapter 10 Introduction AACSB:

2. What is the difference between enterprise systems and functional systems? a) Functional systems are confined to one department; enterprise systems involve two departments. b) Functional systems support accounting and payroll; enterprise systems support marketing and operations. c) Functional systems support production and operations; enterprise systems support accounting and payroll. d) Functional systems are confined to one department; enterprise systems involve the entire enterprise or major portions of it.

Ans: d Difficulty: Easy Section Ref: 10.1 Essentials of Enterprise Systems and Supply Chains AACSB:

3. Which of the following does not correctly match an enterprise system with what it supports? a) BPM supports reengineering and managing the flow of activities and tasks. b) CRM supports customer care. c) ERP supports the external supply chain. d) BI supports forecasting, analyzing alternatives, and evaluating risk and performance.

Ans: c

Difficulty: Medium Section Ref: 10.1 Essentials of Enterprise Systems and Supply Chains AACSB: Use of Information Technology

4. Which of the following statements most comprehensively defines the supply chain? a) Supply chains involve the flow of materials from raw materials suppliers and factories to warehouses b) Supply chains involve the flow of materials, information, money, and services from raw materials suppliers, through factories and warehouses, to the end-consumers. c) Supply chains involve the flow of materials and equipment from raw materials suppliers to factories. d) Supply chains involve the flow of materials and services from raw materials suppliers, through factories and warehouses, to the end-consumers.

Ans: b Difficulty: Medium Section Ref: 10.1 Essentials of Enterprise Systems and Supply Chains AACSB: Use of Information Technology

5. Supply chain management (SCM) systems add value to ERP systems by providing __________ capabilities. a) customer and product support b) analysis and decision support c) forecasting d) project management Ans: b Difficulty: Hard Section Ref: 10.1 Essentials of Enterprise Systems and Supply Chains AACSB:

6. The goals of SCM are all of the following except: a) to reduce uncertainty and risks along the supply chain b) to decrease inventory levels c) to decrease cycle time d) to improve quality control Ans: d Difficulty: Medium Section Ref: 10.1 Essentials of Enterprise Systems and Supply Chains

AACSB: Use of Information Technology

7. Which of the following is not a major type of supply chain? a) build-to-order b) continuous replenishment c) purchasing d) integrated make-to-stock (manufacture to inventory) Ans: c Difficulty: Medium Section Ref: 10.2 Supply Chain Management and Its Business Value AACSB:

8. One major supply chain problem is __________, in which lack of coordination or communication results in large, unnecessary inventories. a) the bullwhip effect b) downstreaming c) upstreaming d) channel conflict Ans: a Difficulty: Easy Section Ref: 10.2 Supply Chain Management and Its Business Value AACSB:

9. The following are components of CRM except: a) channel management b) sales and marketing c) partner management d) production Ans: d Difficulty: Medium Section Ref: 10.4 Customer Relationship Management (CRM) AACSB: Use of Information Technology

10. The following are characteristics of ERP software except: a) designed to improve standard business transactions from all of the functional departments.

b) utilizes IT tools and quality control methods to track and improve process efficiency and effectiveness. c) provides an integrated framework of all routine activities in the enterprise. d) provides easy interfaces to legacy systems as well as to partners’ systems.

Ans: b Difficulty: Hard Section Ref: 10.3 Enterprise Resource Planning (ERP) Systems AACSB: Use of Information Technology

11. Because outsourcing transfers some of the enterprise’s internal processes and resources to outside vendors, outsourcing decisions involve all of the following issues except: a) complex legal contracts b) payment schedules c) differentiation d) service-level agreements Ans: c Difficulty: Medium Section Ref: 10.5 Knowledge Management and IT AACSB: Reflective thinking

12. As part of its logistics strategy, Coca-Cola Enterprises (CCE) saves millions in distribution costs by implementing _______________ systems to manage the supply chain network. a) collaborative fulfillment b) direct-store delivery c) drop shipping d) supply chain integration Ans: b Difficulty: Hard Section Ref: 10.2 Supply Chain Management and Its Business Value AACSB: Use of Information Technology

13. Which company makes the leading ERP software? a) Computer Associates b) Oracle c) PeopleSoft d) SAP

Ans: d Difficulty: Medium Section Ref: 10.3 Enterprise Resource Planning (ERP) Systems AACSB:

14. In order to avoid failures and insure success, each of the following must be done when implementing an ERP program except: a) Create a steering group with a strong executive champion. b) Set expectations and manage the project effectively. c) Conduct a survey to determine how the organization responds to channel partners. d) Enable the infrastructure to support the change.

Ans: c Difficulty: Medium Section Ref: 10.3 Enterprise Resource Planning (ERP) Systems AACSB: Critical thinking

15. The heart of BPM is the streamlining or reengineering of processes. What makes reengineering of processes important to the success of a new IT initiative such as BPM? a) The organization can reduced costs significantly by reengineering processes before automating them with expensive ERP software. b) Reengineering reduces the number of participants in supply chain processes, which reduces complexity. c) Reengineering increases total quality through continuous improvement initiatives. d) Reengineering decreases risk and increases uncertainty in business processes.

Ans: a Difficulty: Hard Section Ref: 10.1 Essentials of Enterprise Systems and Supply Chains AACSB: Critical thinking

16. All of the following are characteristics or benefits of product life cycle management (PLM) except: a) PLM is a business strategy that enables manufacturers to control and share product-related data as part of product design and development efforts and to support supply chain operations. b) In PLM, Web-based and other new technologies are applied to product development to automate its collaborative aspects, which even within a given organization can prove tedious and time consuming. c) PLM can have a significant beneficial impact on engineering change, cycle time, design reuse, and engineering productivity.

d) An explosion of new products that have long life cycles, as well as increasing complexity in supply chain management, are driving the need for PLM. Ans: d Difficulty: Hard Section Ref: Online Brief 10.1 and 10.1 Essentials of Enterprise Systems and Supply Chains AACSB: Reflective thinking

17. What best describes customer relationship management (CRM)? a) CRM is an enterprisewide effort to acquire and retain all customers. b) CRM focuses on building long-term and sustainable customer relationships that add value for both the customer and the company. c) CRM is basically a simple idea: “Treat all customers the same.” d) CRM means being oriented to the needs of the typical customer in the market—the average customer.

Ans: b Difficulty: Medium Section Ref: 10.4 Customer Relationship Management (CRM) AACSB: Reflective thinking

18. Sources such as Forrester Research, IBM, and Merrill Lynch estimate that 85 percent of a company’s knowledge assets are stored in: a) relational databases on corporate servers b) e-mail, documents, spreadsheets, and presentations on individual computers c) legacy systems on off-site facilities d) supply chain systems Ans: b Difficulty: Medium Section Ref: 10.5 Knowledge Management and IT AACSB: Reflective thinking

19. Which is not a characteristic of knowledge that differentiates it from an enterprise’s other assets? a) Knowledge is usually subject to diminishing returns. b) As knowledge grows, it branches and fragments. c) It is difficult to estimate the impact of an investment in knowledge. There are too many intangible aspects. d) The utility and validity of knowledge may vary with time.

Ans: a Difficulty: Medium Section Ref: 10.5 Knowledge Management and IT AACSB: Reflective thinking

20. ____________ are interactive computerized systems that help employees find and connect with colleagues with the expertise required for specific problems---whether they are across the country or across the room---in order to solve specific business problems in seconds. a) Bluetooth b) Expert locating systems c) Global positioning systems d) Knowledge management systems Ans: b Difficulty: Medium Section Ref: 10.5 Knowledge Management and IT AACSB: Reflective thinking

True/False

21. All decision makers along the supply chain need to share information and collaborate.

Ans: True Difficulty: Easy Section Ref: 10.1 Essentials of Enterprise Systems and Supply Chains AACSB: Critical thinking

22. Knowledge management (KM) is computer-based decision analysis usually done online by managers and staff. It includes forecasting, analyzing alternatives, and evaluating risk and performance.

Ans: False Difficulty: Medium Section Ref: 10.1 Essentials of Enterprise Systems and Supply Chains AACSB:

23. A supply chain includes all of the interactions between suppliers, manufacturers, distributors, warehouses, and customers. Although the supply chain is comprised of several businesses, the chain itself is viewed as a single entity.

Ans: True Difficulty: Easy Section Ref: 10.1 Essentials of Enterprise Systems and Supply Chains AACSB: Use of Information Technology

24. Information technology (IT) must support the basic infrastructure and coordination needed for the supply chain to function.

Ans: True Difficulty: Medium Section Ref: 10.1 Essentials of Enterprise Systems and Supply Chains AACSB: Use of Information Technology

25. Materials management involves vendors, financial accounting transfers, warehousing and inventory levels, order fulfillment, distributors, and the information needed to manage it.

Ans: False Difficulty: Easy Section Ref: 10.1 Essentials of Enterprise Systems and Supply Chains AACSB: Use of Information Technology

26. There are typically three types of flows in the supply chain: materials, information, and quality control.

Ans: False Difficulty: Medium Section Ref: 10.1 Essentials of Enterprise Systems and Supply Chains AACSB: Use of Information Technology

27. A major symptom of ineffective supply chains is poor customer service, which hinders people or businesses from getting products or services when and where needed or gives them poor-quality products.

Ans: True Difficulty: Easy Section Ref: 10.2 Supply Chain Management and Its Business Value AACSB:

28. The problems along the supply chain stem mainly from two sources: complex IT and coordination problems with business partners.

Ans: False Difficulty: Medium Section Ref: 10.2 Supply Chain Management and Its Business Value AACSB:

29. With the advance of enterprisewide client/server computing comes a new challenge: how to control all major business processes in real time with a single software architecture.

Ans: True Difficulty: Medium Section Ref: 10.3 Enterprise Resource Planning (ERP) Systems AACSB:

30. The bullwhip effect refers to erratic changes in orders along the supply chain resulting from problems in forecasting demand correctly.

Ans: True Difficulty: Medium Section Ref: 10.2 Supply Chain Management and Its Business Value AACSB:

31. Trust is critical in a collaboration relationship between suppliers and buyers in a supply chain. Trust involves a calculated process wherein an organization estimates the costs of another party cheating or rewards in staying in the relationship.

Ans: True Difficulty: Medium Section Ref: 10.1 Essentials of Enterprise Systems and Supply Chains AACSB: Use of Information Technology

32. Managing a supply chain with international concerns adds many layers of complexity including political concerns, currency risk, governmental concerns, production quality, and infrastructure issues.

Ans: True Difficulty: Medium Section Ref: 10.2 Supply Chain Management and Its Business Value AACSB:

33. International supply management involves the forecasting and prediction of cost trends, labor availability, expertise, and the ability to meet schedules Ans: False Difficulty: Medium Section Ref: 10.2 Supply Chain Management and Its Business Value AACSB: Reflective thinking

34. Choosing between producing a product in-house or purchasing it from an outside source involves looking at the core competencies of the organization, analyzing the costs of producing or acquiring, assessing the suitability of suppliers, examining the expertise within the organization, and examining the ability to inventory products.

Ans: True Difficulty: Medium Section Ref: 10.5 Knowledge Management and IT AACSB: Critical thinking

35. Long-term partnering relationships are usually not entered into for commodity products using a many-supplier strategy because when products are commodities, organizations can play one supplier against another based on price.

Ans: True Difficulty: Medium Section Ref: 10.2 Supply Chain Management and Its Business Value AACSB: Use of Information Technology

36. The most common and effective solution used by companies to solve supply chain problems is building inventories as “insurance” against supply chain uncertainties.

Ans: False Difficulty: Medium Section Ref: 10.2 Supply Chain Management and Its Business Value AACSB: Critical thinking

Short Answer

37. ____________ indicates that the vendor, usually a distributor, maintains the inventories for the manufacturer or buyer. This reduces warehousing costs for suppliers.

Ans: Vendor managed inventory Difficulty: Hard Section Ref: 10.2 Supply Chain Management and Its Business Value AACSB: Use of Information Technology

38. _________ is the use of Internet technologies to purchase or provide goods and services.

Ans: E-procurement Difficulty: Medium Section Ref: 10.2 Supply Chain Management and Its Business Value AACSB: Use of Information Technology

39. A(n) _________ is a collaborative enterprise application that provides a computerized model of a factory.

Ans: virtual factory Difficulty: Easy Section Ref: 10.2 Supply Chain Management and Its Business Value AACSB: Use of Information Technology

40. One way for a business to implement ERP is to lease ERP systems from a(n) ____________.

Ans: application service provider (ASP)

Difficulty: Medium Section Ref: 10.3 Enterprise Resource Planning (ERP) Systems AACSB:

41. ERP systems force organizations to adopt __________ processes.

Ans: standardized Difficulty: Hard Section Ref: 10.3 Enterprise Resource Planning (ERP) Systems AACSB:

42. CRM is basically a simple idea: Treat different customers__________.

Ans: differently Difficulty: Easy Section Ref: 10.4 Customer Relationship Management (CRM) AACSB:

43. An important activity in e-CRM is a _________ program that recognizes customers who repeatedly use the services or products offered by a company.

Ans: loyalty Difficulty: Easy Section Ref: 10.4 Customer Relationship Management (CRM) AACSB: Use of Information Technology

44. The ___________ assessment is a list of all of the potential pitfalls related to the people, processes, and technology that are involved in the e-CRM project Ans: risk Difficulty: Easy Section Ref: 10.4 Customer Relationship Management (CRM) AACSB:

45. Historically, MIS has focused on capturing, storing, managing, and reporting _________ knowledge, which deals with objective, rational, and technical knowledge.

Ans: Explicit Difficulty: Medium Section Ref: 10.5 Knowledge Management and IT AACSB:

46. A(n) __________ presents a single access point for a vast body of explicit information, such as project plans, functional requirements, technical specifications, white papers, training materials, and customer feedback survey data.

Ans: enterprise knowledge portal Difficulty: Hard Section Ref: 10.5 Knowledge Management and IT AACSB:

47. __________ are the simplest and least expensive online tool for dealing with repetitive customer questions. Customers use this online tool by themselves, which makes the delivery cost minimal.

Ans: Frequently asked questions (FAQs) Difficulty: Medium Section Ref: 10.4 Customer Relationship Management (CRM) AACSB:

Essay

48. List three types of enterprise system and describe what each of those systems supports.

Ans: Also see Figure 10.1. Enterprise resource planning (ERP), which usually supports the internal supply chain.

Customer relationship management (CRM), which provides customer care.

Knowledge management (KM) systems, whose objective is to support knowledge creation, storage, maintenance, and distribution throughout the enterprise.

Partner relationship management (PRM), which is designed to provide care to business partners.

Business process management (BPM), which involves the understanding and realignment of processes in the organization, including reengineering and managing the flow of activities and tasks.

Supply chain management systems such as materials requirement planning (MRP).

Product life cycle management (PLM), which seeks to reduce cycle times, streamline production costs, and get more products to market.

Decision support systems (DSSs), whose purpose is to support decision making throughout the enterprise, frequently with the help of a data warehouse.

Business intelligence (BI), which is computer-based decision analysis and includes forecasting, analyzing alternatives, and evaluating risk and performance.

Difficulty: Medium Section Ref: 10.1 Essentials of Enterprise Systems and Supply Chains AACSB: Use of Information Technology

49. Discuss three key issues that should be examined prior to undertaking an ERP implementation project to ensure that the company receives business value from the ERP. Ans: First, organizations need to look at different ERP vendors and select the vendor that meets the company needs most effectively.

Second, organizations need process redesign to optimize their business processes prior to, or in conjunction with, the ERP system development processes.

Third, the business case for funding an ERP project should not be made solely on cost savings, but rather predominantly on the business benefits to be gained from added functionality.

Difficulty: Medium Section Ref: 10.3 Enterprise Resource Planning (ERP) Systems AACSB: Use of Information Technology

50. Identify and discuss three Web-related tools to enhance CRM. Ans: Personalized Web Pages. Many companies allow customers to create their own individual Web pages. These pages can be used to record purchases and preferences, as well as problems and requests.

FAQs. Frequently asked questions (FAQs) are the simplest and least expensive tool for dealing with repetitive customer questions. Customers use this tool by themselves, which makes the delivery cost minimal. However, any nonstandard question requires an e-mail.

E-Mail and Automated Response. The most popular tool of customer service is e-mail.

Inexpensive and fast, e-mail is used mostly to answer inquiries from customers but also to disseminate information.

Chat Rooms. Another tool that provides customer service, attracts new customers, and increases customers’ loyalty is a chat room.

Call Centers. One of the most important tools of customer service is the call center. New technologies are extending the functionality of the conventional call center to e-mail and to Web interaction.

Troubleshooting Tools. Large amounts of time can be saved by customers if they can solve problems by themselves. Many vendors provide Web-based troubleshooting software to assist customers in this task.

Difficulty: Medium Section Ref: 10.4 Customer Relationship Management (CRM) AACSB: Use of Information Technology

Chapter: Chapter 11: Interorganizational, Large-Scale, and Global Information Systems

Multiple Choice

1. The concept of on-demand enterprise is based on the premise that manufacturing will start their operation: a) when inventory is received. b) when an order is received. c) when demand is estimated. d) when production capacity becomes available.

Ans: b Difficulty: Medium Section Ref: 11.1 Interorganizational Activities and Order Fulfillment AACSB:

2. _________________implies that no production step would be ahead or behind because the entire fulfillment cycle would be primed to respond to real-time conditions. a) Supply-driven and demand-driven b) Produce-to-stock c) On-demand and real-time d) Real-time and quick response Ans: c Difficulty: Hard Section Ref: 11.1 Interorganizational Activities and Order Fulfillment AACSB: Use of Information Technology

3. What most accurately describes order fulfillment? a) Providing customers with what they ordered. b) Providing customers with what they ordered and on time. c) Providing customers with what they ordered, on time, and all customer services. d) Providing customers with what they ordered, on time, all customer services, and Web support.

Ans: c Difficulty: Medium

Section Ref: 11.1 Interorganizational Activities and Order Fulfillment AACSB: Use of Information Technology

4. What is the movement of returns from customers back to vendors? a) reverse logistics b) replenishment c) back-office operations d) front-office operations Ans: a Difficulty: Medium Section Ref: 11.1 Interorganizational Activities and Order Fulfillment AACSB:

5. Which of the following is not a characteristic of an interorganizational information system (IOS)? a) Its major objectives are efficient processing of transactions, such as transmitting orders, bills, and payments, and supporting collaboration and communication. b) It involves information flow among two or more organizations. c) It is global. d) It is dedicated to supporting one or more activities Ans: c Difficulty: Hard Section Ref: 11.2 Interorganizational Information Systems and Large-Scale Information Systems AACSB: Use of Information Technology

6. By connecting the ISs of business partners, IOSs enable both partners to do all of the following except: a) eliminate paper processing and its associated inefficiencies and costs b) reduce the costs of routine business transactions c) improve the quality of information flow by reducing or eliminating errors d) increase cycle time in the fulfillment of business transactions Ans: d Difficulty: Hard Section Ref: 11.2 Interorganizational Information Systems and Large-Scale Information Systems AACSB: Use of Information Technology

7. What is the electronic movement of business documents between business partners? a) EDI b) EFT c) VAN d) XML Ans: a Difficulty: Medium Section Ref: 11.2 Interorganizational Information Systems and Large-Scale Information Systems AACSB: Use of Information Technology

8. Several countries, such as Canada and Brazil, impose strict laws to control: a) the collection of taxes. b) the flow of corporate data across nations’ borders. c) credit card fraud. d) counterfeit products.

Ans: b Difficulty: Hard Section Ref: 11.3 Global Information Systems AACSB: Multicultural and diversity understanding

9. What legal question is raised by the transfer of information in and out of a nation? a) Who is responsible for delivering the products or services? b) How will corporate intellectual property and privacy be protected? c) How should Web sites be designed to serve a global audience? d) Whose laws have jurisdiction when records are in a different country for reprocessing or retransmission purposes?

Ans: d Difficulty: Medium Section Ref: 11.3 Global Information Systems AACSB: Ethical and legal responsibilities in organizations and society

10. Many companies use different names, colors, sizes, and packaging for their overseas products and services. This practice is referred to as: a) localization. b) globalization. c) customization.

d) standardization.

Ans: a Difficulty: Medium Section Ref: 11.3 Global Information Systems AACSB:

11. All of the following describe characteristics of the traditional supply chains except: a) The supply chain has been driven by producers and manufacturers driving products to market. b) The dominant action in a traditional supply chain was to forecast demand, make-to-stock, and push products downstream toward end customers. c) Businesses in the supply chain were merely accepting of demand based on the orders received from businesses in front of them in the supply chain. d) In this environment, demand could often be stable and therefore easy to predict.

Ans: d Difficulty: Medium Section Ref: 11.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID AACSB: Use of Information Technology

12. Which of the following best describes a demand-driven supply network (DDSN)? a) DDSN defines that companies in a supply chain will work more closely to shape market demand sharing and collaborating information. b) DDSN removes the ability of a company to push product to market. c) Instead of products being pulled to market, they are pushed to market by customers. d) It eliminates the bullwhip effect and simplifies demand forecasting.

Ans: a Difficulty: Hard Section Ref: 11.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID AACSB: Critical thinking

13. Real-time demand-driven manufacturing (DDM) require all of the following except: a) Effective communication between the supply chain and factory floor. b) Partnerships that are focused on reducing costs through shared quality goals and design responsibility. c) Demand-driven supply network software from Oracle, Teradata, or other vendor. d) Quick and efficient response to changes in demand.

Ans: c Difficulty: Hard Section Ref: 11.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID AACSB: Use of Information Technology

14. One of the newest and possibly most revolutionary solutions to supply chain problems is: a) EDI b) EPC c) RFID d) RPC Ans: c Difficulty: Easy Section Ref: 11.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID AACSB: Use of Information Technology

15. Unlike barcodes, RFID tags are important to supply chain management because they: a) do not need line-of-sight contact to be read. b) are a lower cost technology to track inventory. c) are used on single items. d) are used more extensively and by more companies.

Ans: a Difficulty: Easy Section Ref: 11.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID AACSB: Use of Information Technology

16. The major benefits of EDI and EDI/Internet include all of the following except: a) Minimization of errors. b) Reduced collaboration among business partners. c) Reduced cost of processing information. d) Improved employee productivity.

Ans: b Difficulty: Medium

Section Ref: 11.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID AACSB:

17. ____________ is a business strategy and solution that connects companies with their business partners (suppliers, customers, services) using Web technology to securely distribute and manage information. a) Partner relationship management b) Supplier relationship management c) Collaborative commerce d) Web services Ans: a Difficulty: Medium Section Ref: 11.6 Partner Relationship Management and Collaborative Commerce AACSB:

18. IOS implementation issues include all of the following except: a) appropriate partner relationship management. b) collaborative commerce. c) automatic language translation to facilitate global trade. d) intranets Ans: d Difficulty: Medium Section Ref: 11.6 Partner Relationship Management and Collaborative Commerce AACSB: Use of Information Technology

True/False

19. The concept of on-demand enterprise is based on the premise that manufacturing or service fulfillment starts after an order is received.

Ans: True Difficulty: Easy Section Ref: 11.1 Interorganizational Activities and Order Fulfillment AACSB:

20. Order fulfillment is part of back-office operations, which are the activities that support the fulfillment of orders, such as accounting, inventory management, and shipping.

Ans: True Difficulty: Medium Section Ref: 11.1 Interorganizational Activities and Order Fulfillment AACSB:

21. Logistics are customer-facing activities such as sales and advertising that touch or are visible to customers.

Ans: False Difficulty: Medium Section Ref: 11.1 Interorganizational Activities and Order Fulfillment AACSB:

22. Some of the issues that may create difficulties in global supply chains are legal issues, customs fees and fees, language and cultural difference, fast changes in currency exchange rates, and political instabilities.

Ans: True Difficulty: Medium Section Ref: 11.3 Global Information Systems AACSB: Use of Information Technology

23. Traditional EDI is extensively used by large corporations in a national level, but not in a global network.

Ans: False Difficulty: Medium Section Ref: 11.3 Global Information Systems AACSB: Use of Information Technology

24. Electronic hubs can help buyers and sellers manage the task of finding potential exchanges.

Ans: False

Difficulty: Medium Section Ref: 11.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID AACSB: Use of Information Technology

25. The main goal of extranets is to foster coordination between business partners.

Ans: False Difficulty: Medium Section Ref: 11.6 Partner Relationship Management and Collaborative Commerce AACSB: Use of Information Technology

26. PeopleSoft's SRM model is based on the idea that an e-supply chain is based on integration and collaboration.

Ans: True Difficulty: Medium Section Ref: 11.6 Partner Relationship Management and Collaborative Commerce AACSB: Use of Information Technology

27. C-commerce refers to non selling/buying electronic information between and among organizations.

Ans: False Difficulty: Medium Section Ref: 11.6 Partner Relationship Management and Collaborative Commerce AACSB:

28. Internet retailers’ biggest problems are fulfillment and after-sale customer service.

Ans: True Difficulty: Medium Section Ref: 11.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID AACSB: Use of Information Technology

29. A virtual corporation is an organization composed of two or more business partners, in different locations, sharing costs and resources for the purpose of producing a product or service.

Ans: True Difficulty: Medium Section Ref: 11.2 Interorganizational Information Systems and Large-Scale Information Systems AACSB:

30. VoIP, e-mail, wikis, instant messaging, and collaborative services are the major information technologies that support virtual corporations.

Ans: True Difficulty: Medium Section Ref: 11.2 Interorganizational Information Systems and Large-Scale Information Systems AACSB: Use of Information Technology

31. The airline reservations system SABRE is an example of a B2B trading system.

Ans: False Difficulty: Medium Section Ref: 11.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID AACSB: Use of Information Technology

32. EDI is the electronic movement of business documents between business partners. EDI runs on VANs or can be Internet-based.

Ans: True Difficulty: Medium Section Ref: 11.3 Global Information Systems AACSB: Use of Information Technology

33. International companies are joint ventures whose business partners are located in different countries.

Ans: False Difficulty: Medium Section Ref: 11.3 Global Information Systems

AACSB: Use of Information Technology

34. Web Services support IOSs and facilitate integration of B2B applications by enabling disparate systems to share data and services.

Ans: True Difficulty: Medium Section Ref: 11.5 Interorganizational Information Integration and Connectivity AACSB: Use of Information Technology

Short Answer

35. The key aspects of ____________ are delivery of materials or services at the right time, to the right place, and at the right cost.

Ans: order fulfillment Difficulty: Medium Section Ref: 11.1 Interorganizational Activities and Order Fulfillment AACSB:

36. ___________ are private, third-party networks that can be tailored to specific business needs.

Ans: value-added networks Difficulty: Medium Section Ref: 11.2 Interorganizational Information Systems and Large-Scale Information Systems AACSB: Use of Information Technology

37. _________________ provides customers with exactly what they want, when and where they want it. Effective communication between the supply chain and factory floor is needed to make it happen.

Ans: Demand-driven manufacturing Difficulty: Hard Section Ref: 11.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID AACSB: Use of Information Technology

38. ____________ is a major IOS infrastructure technology and an emerging B2B standard, promoted as a companion or replacement for EDI systems.

Ans: XML Difficulty: Medium Section Ref: 11.2 Interorganizational Information Systems and Large-Scale Information Systems AACSB: Use of Information Technology

39. Interorganizational systems that connect companies located in two or more countries are referred to as ___________________________ .

Ans: global information systems Difficulty: Easy Section Ref: 11.3 Global Information Systems AACSB:

40. Business partnerships formed for the specific purpose of producing a product or service which can be temporary (such as building an oil pipeline) or permanent are referred to as _______________.

Ans: virtual companies Difficulty: Medium Section Ref: 11.2 Interorganizational Information Systems and Large-Scale Information Systems AACSB: Use of Information Technology

41. Many companies use different names, colors, sizes, and packaging for their overseas products and services. This practice is referred to as ___________________ .

Ans: localization Difficulty: Easy Section Ref: 11.3 Global Information Systems AACSB:

42. ____________ is the ability to adjust the design of the supply chain to meet structural shifts in markets and modify supply network strategies, products, and technologies.

Ans: Adaptability Difficulty: Easy Section Ref: 11.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID AACSB:

43. B2B exchanges are used mainly to facilitate trading among companies. In contrast, a(n) _________ is used to facilitate communication and coordination among business partners, frequently along the supply chain.

Ans: hub Difficulty: Easy Section Ref: 11.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID AACSB: Use of Information Technology

44. Most large software vendors, such as Microsoft, Oracle, SAP, and IBM, offer several ___________ solutions to connect two or more organizations and can be customized to include existing systems such as ERPs Ans: IOS Difficulty: Medium Section Ref: 11.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID AACSB:

45. Many failures of EDI adoption, for example, result from lack of partners’_________ .

Ans: cooperation Difficulty: Easy Section Ref: 11.7 Managerial Issues AACSB: Reflective thinking

46. ______________ are networks driven by customer demand. That is, instead of products being pushed to market, they are pulled to market by customers. .

Ans: Demand-driven supply networks (DDSNs)

Difficulty: Hard Section Ref: 11.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID AACSB: Use of Information Technology

47. ______________ refers to the flow of material or finished goods back to the source; for example, the return of defective products by customers.

Ans: Reverse logistics Difficulty: Medium Section Ref: 11.1 Interorganizational Activities and Order Fulfillment AACSB: Use of Information Technology

Essay

48. List and briefly discuss three prominent types of interorganizational systems (IOSs).

Ans: B2B trading systems. These systems are designed to facilitate trading between or among business partners. The partners can be in the same or in different countries.

B2B support systems. These are nontrading systems such as hubs, directories, and other services.

Global systems. Global information systems connect two or more companies in two or more countries.

Electronic funds transfer (EFT). In EFT, telecommunications networks transfer money among financial institutions.

Groupware. Groupware technologies facilitate communication and collaboration between and among organizations. These include a transmission system that can be used to deliver e-mail and fax documents between organizations.

Difficulty: Medium Section Ref: 11.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID AACSB: Use of Information Technology

49. List three benefits of demand-driven supply networks (DDSNs).

Ans: Benefits of DDSNs: ▪ More accurate and detailed demand forecasting.

▪ Lower supply chain costs.

▪ Improved perfect-order performance.

▪ ▪ ▪ ▪

Reduced days of inventory.

Improved cash-to-cash performance.

It provides a customer-centric approach, as opposed to a factory-centric approach.

All participants in the supply chain are able to take part in shaping demand, minimizing the bullwhip effect.

Difficulty: Medium Section Ref: 11.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID AACSB: Use of Information Technology

50. Describe what PRM does.

Ans: PRM solutions connect companies with their business partners (suppliers, customers, services) using Web technology to securely distribute and manage information. At its core, a PRM application facilitates partner relationships. Specific functions include: partner profiles, partner communications, management of customer leads, targeted information distribution, connecting the extended enterprise, partner planning, centralized forecasting, group planning, email and Web-based alerts, messaging, price lists, and community bulletin boards.

Difficulty: Medium Section Ref: 11.6 Partner Relationship Management and Collaborative Commerce AACSB: Use of Information Technology

Chapter: Chapter 12: Business Intelligence and Decision Support Systems

Multiple Choice

1. Which of the following is not a reason why managers need the support of IT? a) It is very difficult to make good decisions without valid and relevant information. b) Modeling and quantitative analysis are needed to understand complex data. c) Exploring and comparing multiple relevant alternatives is key to good decisions. d) The timeframe for decision making is expanding.

Ans: d Difficulty: Medium Section Ref: 12.1 The Need for Business Intelligence (BI) AACSB: Use of Information Technology

2. _________ are designed to store data required by an organization and are optimized to capture and handle large volumes of transactions. In contrast, _________ are database systems optimized for reporting. a) Operational systems; data warehouses b) Data silos; ETL c) Tactical systems; strategic systems d) Data stores; transaction processing systems Ans: a Difficulty: Hard Section Ref: 12.1 The Need for Business Intelligence (BI) AACSB:

3. What is the primary business problem caused when data is not integrated into a single reporting system? a) Getting too much detailed data. b) End users have to extract their own data to analyze. c) No trusted real-time view of what is going on across the enterprise. d) Data is not standardized.

Ans: c Difficulty: Medium Section Ref: 12.1 The Need for Business Intelligence (BI)

AACSB: Critical thinking

4. Core business intelligence (BI) functions and features include all of the following except: a) enterprise reporting and analysis b) enterprise search c) visualization tools d) point of sale (POS) tools Ans: d Difficulty: Medium Section Ref: 12.1 The Need for Business Intelligence (BI) AACSB:

5. All of the following describe trends in BI except: a) Middle and senior level managers remained the primary users of BI until the early 2000s. b) The cost of BI has decreased. As a result, BI solutions are being implemented at smaller firms. c) BI has evolved from a set of technologies to business solutions. d) In 2008, several multi-billon-dollar acquisitions helped consolidate the BI vendor market and intensified competition among the mega-vendors.

Ans: a Difficulty: Hard Section Ref: 12.1 The Need for Business Intelligence (BI) AACSB:

6. The key benefit of _________ technology is that it allows a company to react to events as they happen and be proactive with respect to their future. a) key performance indicator b) predictive analytical c) compliance d) modeling Ans: b Difficulty: Medium Section Ref: 12.1 The Need for Business Intelligence (BI) AACSB:

7. Reasons why companies invested in BI include all of the following except:

a) improve data quality b) full visibility and real-time access to company data c) complete view of what had happened d) easy-to-create, accurate, up-to-the-minute reports Ans: c Difficulty: Medium Section Ref: 12.1 The Need for Business Intelligence (BI) AACSB:

8. Which is not one of the three major components of BI architecture? a) data extraction and integration b) digital dashboards c) enterprise reporting systems d) data mining, query, and analysis tools Ans: b Difficulty: Medium Section Ref: 12.2 BI Architecture, Reporting, and Performance Management AACSB:

9. Data latency is a measure of ________. a) data freshness b) self-service reporting capabilities c) information delivery speed d) data storage capabilities Ans: a Difficulty: Medium Section Ref: 12.2 BI Architecture, Reporting, and Performance Management AACSB:

10. _________ are interactive user interfaces and reporting tools. a) Dashboards and scorecards b) Data mining c) Graphics d) Ad hoc queries Ans: a Difficulty: Medium

Section Ref: 12.2 BI Architecture, Reporting, and Performance Management AACSB:

11. What is the objective of business performance management? a) The objective of BPM is tactical--to optimize the overall performance of an enterprise. b) The objective of BPM is operational--to minimize inefficiencies in the enterprise. c) The objective of BPM is strategic--to maximize customer relationships and sales revenues. d) The objective of BPM is prediction--to forecast and respond to changes in demand.

Ans: c Difficulty: Medium Section Ref: 12.2 BI Architecture, Reporting, and Performance Management AACSB:

12. _________ is used to understand customer behavior, evaluate a Web site’s effectiveness, and quantify the success of a marketing campaign. a) E-commerce analytics b) Search c) Text mining d) Web mining Ans: d Difficulty: Medium Section Ref: 12.3 Data, Text, and Web Mining and BI Search AACSB:

13. _________ is used to discover new patterns that may not be obvious or known. a) E-commerce analytics b) Search c) Text mining d) Web mining Ans: c Difficulty: Medium Section Ref: 12.3 Data, Text, and Web Mining and BI Search AACSB:

14. BI search and text analytics are capabilities added to the BI infrastructure to accommodate: a) customer data b) documents c) Web data d) unstructured data Ans: d Difficulty: Medium Section Ref: 12.3 Data, Text, and Web Mining and BI Search AACSB:

15. Discovering knowledge contained in the data stored in databases is achieved with: a) data mining b) visualization c) automated decision support d) enterprise search Ans: a Difficulty: Medium Section Ref: 12.3 Data, Text, and Web Mining and BI Search AACSB:

16. In general, it has been found that the job of __________ is the most likely job to be automated. a) senior-level managers b) mid-level managers c) lower-level managers d) marketing managers Ans: b Difficulty: Easy Section Ref: 12.4 Managers and Decision Making Processes AACSB: Critical thinking

17. The major phases in the decision making process include all of the following except: a) analysis b) choice c) design d) intelligence

Ans: a Difficulty: Medium Section Ref: 12.4 Managers and Decision Making Processes AACSB:

18. In the ___________ phase of decision making, managers examine a situation and then identify and define the problem. a) analysis b) choice c) design d) intelligence Ans: d Difficulty: Medium Section Ref: 12.4 Managers and Decision Making Processes AACSB:

19. In the ___________ phase, decision makers construct a model that simplifies the problem or opportunity. This is done by making assumptions that simplify reality and by expressing the relationships among all variables a) analysis b) choice c) design d) intelligence Ans: c Difficulty: Medium Section Ref: 12.4 Managers and Decision Making Processes AACSB:

20. Which is not a benefit of modeling in decision making? a) Models capture and represent the full complexity of the situation. b) The cost of virtual experimentation is much lower. c) Models reinforce learning, and support training. d) Modeling allows a manager to better deal with the uncertainty.

Ans: a Difficulty: Easy Section Ref: 12.4 Managers and Decision Making Processes AACSB: Reflective thinking

21. Broadly defined, a decision support system (DSS) is a computer-based information system that combines models and data in an attempt to solve _________ with intensive user involvement. a) structured decisions b) semistructured problems c) semistructured and some unstructured problems d) unstructured problems Ans: c Difficulty: Medium Section Ref: 12.5 Decision Support Systems AACSB: Use of Information Technology

22. Sensitivity analysis is extremely valuable in DSSs for all of the following reasons except: a) It makes the DSS flexible and adaptable to changing conditions. b) It allows users to enter their own data, including the most pessimistic data. c) It provides a better understanding of the model and the problem. d) It eliminates uncertainty in the decision.

Ans: d Difficulty: Medium Section Ref: 12.5 Decision Support Systems AACSB: Use of Information Technology

23. What are the major end-user tools for creating DSS applications? a) Spreadsheets b) Databases c) PDAs d) Simulation Ans: a Difficulty: Medium Section Ref: 12.5 Decision Support Systems AACSB: Use of Information Technology

24. Frontline decisions by employees interacting with customers and other business partners on a regular basis and that can be supported by automated systems include all of the following except:

a) budgeting decisions b) decisions that maximize a sales opportunity c) decisions that minimize the cost of customer service requests d) resolving a customer complaint Ans: a Difficulty: Medium Section Ref: 12.6 Automated Decision Support (ADS) AACSB: Critical thinking 25. Automating the decision-making process is usually achieved by capturing a manager’s expertise in a: a) set of business rules b) GDSS c) model base d) business base Ans: a Difficulty: Hard Section Ref: 12.6 Automated Decision Support (ADS) AACSB:

True/False

26. BI is both a management process as well as a collection of software applications and underlying technology that enables organizations to make better business decisions by exposing key metrics that drive the organization.

Ans: True Difficulty: Medium Section Ref: Introduction AACSB:

27. For most organizations, IT investments have translated into more sales.

Ans: False Difficulty: Easy Section Ref: 12.1 The Need for Business Intelligence (BI) AACSB: Reflective thinking

28. It is difficult or impossible to conduct analyses of complex problems without computerized support.

Ans: True Difficulty: Easy Section Ref: 12.1 The Need for Business Intelligence (BI) AACSB: Reflective thinking

29. Data silos with non-standardized data make it impossible to get a complete view of individual customers.

Ans: True Difficulty: Easy Section Ref: 12.1 The Need for Business Intelligence (BI) AACSB:

30. With constantly changing business environments, companies are investing in BI to be responsive to competitors’ actions, regulatory requirements, mergers and acquisitions, and the introduction of new channels for the business.

Ans: True Difficulty: Easy Section Ref: 12.1 The Need for Business Intelligence (BI) AACSB:

31. ISs are much better at collecting data than they are at helping people understand it.

Ans: True Difficulty: Easy Section Ref: 12.1 The Need for Business Intelligence (BI) AACSB:

32. Slow growth in demand for BI technologies has constrained major software companies from integrating BI capabilities into their product mix.

Ans: False

Difficulty: Easy Section Ref: 12.1 The Need for Business Intelligence (BI) AACSB:

33. Predictive analytics is the branch of data mining that focuses on forecasting trends and estimating probabilities of future events.

Ans: True Difficulty: Easy Section Ref: 12.1 The Need for Business Intelligence (BI) AACSB:

34. Companies can receive real-time notification of their customers’ transactions by implementing routing reporting applications.

Ans: False Difficulty: Medium Section Ref: 12.1 The Need for Business Intelligence (BI) AACSB:

35. Advanced dashboard technology can present KPIs, trends, and exceptions using Adobe Flash animation.

Ans: True Difficulty: Medium Section Ref: 12.2 BI Architecture, Reporting, and Performance Management AACSB:

36. The balanced scorecard methodology is a framework for defining, implementing, and managing an enterprise’s accounting and financial systems.

Ans: False Difficulty: Medium Section Ref: 12.2 BI Architecture, Reporting, and Performance Management AACSB:

37. The trend in BI is toward self-sufficiency by providing users with real-time reporting and decision support tools that they can use to explore data to learn from it themselves.

Ans: True Difficulty: Medium Section Ref: 12.2 BI Architecture, Reporting, and Performance Management AACSB:

38. Business performance management (BPM) cannot be achieved unless managers have methods to quickly and easily determine how well the organization is achieving its objectives, and how well the organization is aligned with its strategic direction.

Ans: True Difficulty: Medium Section Ref: 12.2 BI Architecture, Reporting, and Performance Management AACSB:

39. Managers are now recognizing that a major source of competitive advantage is the firm’s structured knowledge from documents, unstructured text from e-mail messages, and log data from Internet browsing histories.

Ans: False Difficulty: Medium Section Ref: 12.3 Data, Text, and Web Mining and BI Search AACSB: Critical thinking

40. Text analytics transforms unstructured text into structured text data, which can then be searched, mined, or discovered.

Ans: True Difficulty: Medium Section Ref: 12.3 Data, Text, and Web Mining and BI Search AACSB:

41. Decision making involves four major phases: awareness, design, choice, and feedback.

Ans: False Difficulty: Medium

Section Ref: 12.4 Managers and Decision Making Processes AACSB:

42. An advantage of modeling is that it allows managers to better deal with the uncertainty by introducing many “what-ifs” and calculating the risks involved in specific actions.

Ans: True Difficulty: Medium Section Ref: 12.4 Managers and Decision Making Processes AACSB:

43. Models help the decision making process by enabling fast and inexpensive virtual experiments with new or modified systems.

Ans: True Difficulty: Medium Section Ref: 12.4 Managers and Decision Making Processes AACSB:

44. DSSs deal mostly with structured problems or decisions because they are easy to model.

Ans: False Difficulty: Medium Section Ref: 12.5 Decision Support Systems AACSB: Use of Information Technology

45. With the exception of large-scale DSSs, end users can build these systems themselves using DSS development tools such as Excel.

Ans: True Difficulty: Easy Section Ref: 12.5 Decision Support Systems AACSB: Critical thinking

46. Routine or repetitive decisions, such as the approval of consumer loans, can be made or supported by automated decision support systems.

Ans: True Difficulty: Medium Section Ref: 12.6 Automated Decision Support (ADS) AACSB: Use of Information Technology

47. Sensitivity analysis is the study of the impact that changes in one or more parts of a model have on other parts.

Ans: True Difficulty: Medium Section Ref: 12.5 Decision Support Systems AACSB:

Short Answer

48. A(n) _________ is a set of rules or instructions for solving a problem in a finite number of steps.

Ans: algorithm Difficulty: Medium Section Ref: 12.1 The Need for Business Intelligence (BI) AACSB:

49. The term ____________ refers to an enterprise's ability to make informed, data-driven decisions at the time they are needed Ans: business intelligence Difficulty: Easy Section Ref: 12.1 The Need for Business Intelligence (BI) AACSB:

50. _________ systems provide standard, ad hoc, or custom reports that are populated with data from a single trusted source to get a single version of the truth Ans: Enterprise reporting

Difficulty: Medium Section Ref: 12.2 BI Architecture, Reporting, and Performance Management AACSB:

51. Dashboards and__________ are interactive user interfaces as well as reporting tools.

Ans: scorecards Difficulty: Medium Section Ref: 12.2 BI Architecture, Reporting, and Performance Management AACSB:

52. _________ is important in detecting fraudulent behavior, especially in insurance claims and credit card use.

Ans: Data mining Difficulty: Medium Section Ref: 12.3 Data, Text, and Web Mining and BI Search AACSB:

53. _________ allows users to enter their own data, including pessimistic data of the worst scenario, and to view how systems will behave under varying conditions.

Ans: Sensitivity analysis Difficulty: Medium Section Ref: 12.5 Decision Support Systems AACSB:

54. The term _________ covers all aspects of the communications between a user and the DSS, or any other computer-based system.

Ans: user interface Difficulty: Medium Section Ref: 12.5 Decision Support Systems AACSB:

55. The most popular software tool adopted as an easy-to-use and powerful DSS tool for data manipulation is Microsoft ________________.

Ans: Excel Difficulty: Medium Section Ref: 12.5 Decision Support Systems AACSB: Use of Information Technology

56. A(n) ___________ is an interactive system that supports semi-structured and unstructured decision making by groups.

Ans: group decision support system Difficulty: Easy Section Ref: 12.5 Decision Support Systems AACSB: Use of Information Technology

57. Knowledge is organized information to make it understandable and applicable to decision making. The collection of knowledge related to a specific problem to be used in an intelligent system is stored in the _______________ .

Ans: knowledge base Difficulty: Medium Section Ref: 12.5 Decision Support Systems AACSB:

58. Automated decision support (ADS) systems are rule-based systems that automatically provide solutions to ___________ managerial problems.

Ans: repetitive Difficulty: Medium Section Ref: 12.6 Automated Decision Support (ADS) AACSB:

Essay

59. Identify and briefly describe the four phases of decision making.

Ans: The four phases of decision making are intelligence, design, choice, and implementation.

The decision-making process starts with the intelligence phase, in which managers examine a situation and identify and define the problem. In the design phase, decision makers construct a model that simplifies the problem or opportunity. The model is validated, and decision makers set criteria for the evaluation of alternative potential solutions that are identified. The choice phase involves selecting a solution, which is tested “on paper.” Once this proposed solution seems to be feasible, implementation begins. Successful implementation results in resolving the original problem or opportunity.

Difficulty: Medium Section Ref: 12.4 Managers and Decision Making Processes AACSB:

60. Discuss the characteristics automated decision support (ADS) systems. Give an example of a process that can be supported by an ADS system.

Ans: ADS systems are most suitable for repetitive decisions that must be made frequently and/or rapidly using information that is available electronically. The knowledge and decision criteria, as well as the business rules that express them, must be highly structured and the problem situation must be well understood. High-quality data and/or knowledge about the problem domain must also be available. Approval of a loan or granting a credit line to a customer are typical examples.

Difficulty: Medium Section Ref: 12.6 Automated Decision Support (ADS) AACSB: Use of Information Technology

61. Explain modeling and models in decision making. List three benefits of modeling in decision making.

Ans: A model in decision making is a simplified representation, or abstraction of reality. It is simplified because reality is too complex to copy exactly, and a lot of complexity is actually irrelevant to a specific problem. With modeling, one can perform virtual experiments and an analysis on a model of reality, rather than on reality itself. The benefits of modeling in decision making are: • The cost of virtual experimentation is much lower than the cost of experimenting with a real system.

• Models allow for the simulated compression of time.

• Manipulating the model by changing variables is much easier than manipulating the real system.

• The cost of making mistakes during a real trial-and-error experiment is much lower • Modeling allows a manager to better deal with the uncertainty.

• Mathematical models allow the analysis and comparison of a very large number of alternative solutions.

• Models enhance learning and training.

Difficulty: Medium Section Ref: 12.4 Managers and Decision Making Processes AACSB: Reflective thinking

Chapter: Chapter 13: IT Strategy and Planning

Multiple Choice

1. Which of the following does not describe business and IT strategic alignment? a) The alignment of IT and business is the number-one issue facing many CIOs. b) Many IT initiatives have failed because they were not aligned to the business strategy. c) Most companies initiate the simple process of IT alignment. d) If IT is not properly aligned with the organization’s strategy, then large investments in ISs may have a low payoff.

Ans: c Difficulty: Medium Section Ref: 13.1 Alignment of Business and IT Strategies AACSB: Reflective thinking

2. IT-business alignment can be fostered by focusing on activities central to alignment. Which of the following is not one of those activities? a) The CIO is a focused, narrow technologist. b) Senior managers are committed to deploying IT to assure company success. c) The CIO is a member of senior management. d) The CIO understands and buys into the corporate culture and has good communication skills.

Ans: a Difficulty: Medium Section Ref: 13.1 Alignment of Business and IT Strategies AACSB: Critical thinking

3. What is the main challenge to achieving IT-business alignment? a) Getting end-users involved in projects to support business tactics. b) The CIO attaining strategic influence. c) Identifying a link between business and IT plans. d) Getting cross-functional cooperation among middle level managers.

Ans: b Difficulty: Hard Section Ref: 13.1 Alignment of Business and IT Strategies AACSB: Critical thinking

4. When enterprise-wide IT projects so overwhelm the workload of the IS group that there is insufficient time for communication with members of the business units, it damages IS-business alignment because: a) business solutions cannot be optimized. b) the enterprise is over-committed. c) the IS group is viewed as an order taker rather than as a partner with whom to build solutions. d) the IS budget is too limited.

Ans: c Difficulty: Hard Section Ref: 13.2 IT Strategy Initiation AACSB:

5. IT can add value to a company directly by: a) Reducing the workforce while not reducing the production level. b) Widening the geographic market. c) Providing a competitive advantage through improved customer service. d) Reducing competition based on price.

Ans: a Difficulty: Medium Section Ref: 13.2 IT Strategy Initiation AACSB: Use of Information Technology

6. Which of the following is not a characteristic of resources that give firms the potential to create a competitive advantage? a) appropriability b) cost leadership c) rarity d) value Ans: b Difficulty: Hard Section Ref: 13.2 IT Strategy Initiation AACSB: Use of Information Technology

7. Southwest Airlines relies on IT to be a low-cost airline. Southwest’s competitive strategy is sustainable under which of the following conditions? a) The IT must generate additional revenues that exceed the cost of the IT. b) The IT must generate first-mover advantage. c) Other airlines do not fly the same routes. d) There are no software upgrades.

Ans: a Difficulty: Medium Section Ref: 13.2 IT Strategy Initiation AACSB:

8. The ________ is a business leader who uses IT as a core tool to leverage IT to add value and gain a competitive advantage. a) end-user b) business technologist c) director of operations d) strategic CIO Ans: d Difficulty: Easy Section Ref: 13.2 IT Strategy Initiation AACSB:

9. The focus of IT strategy is on: a) building a sustainable, low cost IT infrastructure b) implementing cutting-edge technology c) how IT creates business value d) building mobile capabilities Ans: c Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB: Use of Information Technology

10. _________ is a group of managers and staff representing various organizational units that is set up to establish IT priorities and to ensure that the IS department is meeting the needs of the enterprise. a) Advisory council b) Board of directors

c) Corporate steering committee d) Senior management Ans: c Difficulty: Easy Section Ref: 13.3 IT Strategic Planning AACSB:

11. The success of IT steering committees largely depends on _______________, which is a formal set of statements and policies for IT alignment, level of acceptable risk, and allocation of resources. a) an IT tactical plan b) an application portfolio c) IT governance d) IT imitability Ans: c Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB: Reflective thinking

12. Most IT strategic planning methodologies start with: a) an investigation of the industry, competition, and competitiveness b) an inventory of applications and databases c) a review of newly developed IT tools d) interviews with managers who depend on IT to perform their jobs Ans: a Difficulty: Hard Section Ref: 13.3 IT Strategic Planning AACSB: Critical thinking

13. Which is not a characteristic of critical success factors (CSF)? a) The CSF approach to IT planning helps identify the information needs of managers. b) CSFs remain constant after they have been agreed upon. c) CSFs exist in business units, departments, and at the organizational level d) CSFs vary by broad industry categories, such as manufacturing, service, or government.

Ans: b Difficulty: Medium

Section Ref: 13.3 IT Strategic Planning AACSB:

14. For firms in the same industry, critical success factors (CSFs) will vary depending on each of the following except: a) whether the firms are market leaders or weaker competitors b) location of the firms c) what competitive strategies they follow d) their IT architectures Ans: d Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB: Critical thinking

15. __________ is an approach used in planning situations which involve a lot of uncertainty, such as e-commerce planning. a) Critical success factors b) Resource allocation c) Scenario planning d) Regression analysis Ans: c Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB:

16. Which is not a key factor in getting and keeping IT aligned with the organization? a) The CIO having strong relationships with other senior executives. b) Treating end-users as customers. c) The IS department having good relationships with end-user departments. d) Introducing new IT as a competitive weapon.

Ans: d Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB: Critical thinking

17. Which is not an effective way to improve the relationship between the IT department and end-users? a) Having end users from key business units on steering committees. b) Providing end users with the latest technologies. c) Creating information centers. d) Using service-level agreements.

Ans: b Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB: Reflective thinking

18. _________ is contracting work to be completed by an outside vendor. a) Temping b) Offshoring c) Outsourcing d) Sourcing Ans: c Difficulty: Medium Section Ref: 13.4 Outsourcing, Offshoring, and IT as a Subsidy AACSB:

19. Major reasons for outsourcing by large U.S. companies include all of the following except: a) desire to focus on core competency b) cost reduction c) improve quality d) develop unique capabilities Ans: d Difficulty: Medium Section Ref: 13.4 Outsourcing, Offshoring, and IT as a Subsidy AACSB:

20. Which of the following is not a characteristic of outsourcing? a) There are many hidden costs. b) The use of IT outsourcing continues to decrease. c) The failure rate of outsourcing relationships remains high, with estimates ranging from 40 to 70 percent. d) A majority of companies surveyed reported having negative experiences with outsourcing.

Ans: b Difficulty: Hard Section Ref: 13.4 Outsourcing, Offshoring, and IT as a Subsidy AACSB:

21. Which of the following is not a major risk to consider when deciding whether to outsource? a) higher developmental or operational costs than anticipated b) exceeding the time anticipated for development or transition c) inability to provide the expected service levels at implementation d) inability to sustain the competitive advantage Ans: d Difficulty: Medium Section Ref: 13.4 Outsourcing, Offshoring, and IT as a Subsidy AACSB:

22. The trend toward offshore outsourcing is primarily due to all of the following except: a) global markets b) lower costs c) skilled labor d) security concerns Ans: d Difficulty: Medium Section Ref: 13.4 Outsourcing, Offshoring, and IT as a Subsidy AACSB:

23. A popular model in which computing resources are made available over a network to the user when resources are needed is: a) Software-as-a-Service (SaaS) b) grid computing c) application services provider (ASP) d) enterprise resource planning Ans: a Difficulty: Medium Section Ref: 13.5 IT Strategy and Emerging Computing Environments AACSB:

24. Networks can be used to support the concept of __________ in which the unused processing cycles of all computers in a given network can be harnessed to create powerful computing capabilities. a) Software-as-a-Service (SaaS) b) grid computing c) application services provider (ASP) d) enterprise resource planning Ans: b Difficulty: Medium Section Ref: 13.5 IT Strategy and Emerging Computing Environments AACSB:

25. All of the following are characteristics of open source software except: a) Open source software is typically less reliable than proprietary software. b) It is a development method for software which allows users to modify the source code, enabling integration in different computing systems. c) It may allow hackers to know about the weaknesses or loopholes of the software more easily than closed-source software. d) Open source code is becoming a corporate building block.

Ans: a Difficulty: Hard Section Ref: 13.5 IT Strategy and Emerging Computing Environments AACSB:

True/False

26. A study of chief information officers (CIOs) sponsored by the Society for Information Management found that one of the top issues facing CIOs was the alignment of IT and business.

Ans: True Difficulty: Medium Section Ref: 13.1 Alignment of Business and IT Strategies AACSB:

27. Despite the importance of IT alignment, organizations continue to demonstrate limited actual alignment.

Ans: True Difficulty: Medium Section Ref: 13.1 Alignment of Business and IT Strategies AACSB:

28. The main challenge to achieving IT-business alignment is for the CIO to secure the necessary budget and other resources.

Ans: False Difficulty: Medium Section Ref: 13.1 Alignment of Business and IT Strategies AACSB:

29. Resources must be valuable, rare, and generate net increases in revenues in order to be able to create competitive advantages.

Ans: True Difficulty: Easy Section Ref: 13.2 IT Strategy Initiation AACSB: Reflective thinking

30. It is typical for a traditional CIO to routinely work with business leaders to work on their strategy and translate it into action.

Ans: False Difficulty: Medium Section Ref: 13.2 IT Strategy Initiation AACSB: Critical thinking

31. The corporate steering committee is a group of IT managers that is set up to establish IT priorities and to ensure that the IS department is meeting the needs of the enterprise.

Ans: False Difficulty: Medium Section Ref: 13.3 IT Strategic Planning

AACSB:

32. Business service management is an approach for linking key performance indicators (KPIs) of IT to business goals to determine the impact on the business.

Ans: True Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB:

33. American Airlines’ reservation system, SABRE and Caterpillar’s equipment maintenance system are examples of strategic competitive systems. A drawback of these systems is that they are expensive and easy to duplicate.

Ans: False Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB: Reflective thinking

34. The business systems planning (BSP) model was developed by IBM, and is a top-down approach for IT planning that starts with business strategies.

Ans: True Difficulty: Hard Section Ref: 13.3 IT Strategic Planning AACSB:

35. Critical success factors are those ten to twenty key factors that, if done well, will result in the organization’s success.

Ans: False Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB:

36. The critical success factors approach encourages managers to identify what is most important to their performance and then develop good indicators of performance in these areas.

Ans: True Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB:

37. One important reason to do scenario planning is to ensure that companies focus on catastrophes and not only opportunities.

Ans: False Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB:

38. One type of scenario planning involves creating customer scenarios. Creating customer scenarios helps the company better fit the products and services into the real lives of the customers, resulting in sales expansion and customer loyalty.

Ans: True Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB:

39. Resource allocation is a harmonious process in most organizations during which high-payoff projects are identified and budgeted.

Ans: False Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB: Critical thinking

40. Transactional outsourcing agreements, in which a company outsources discrete processes that have well-defined business rules, have a lower success rate than strategic partnerships, in which a single outsourcer takes responsibility for the majority of a client company’s IT services.

Ans: False

Difficulty: Medium Section Ref: 13.4 Outsourcing, Offshoring, and IT as a Subsidy AACSB: Use of Information Technology

41. Some experts believe that all software will eventually become a service and be sold as a utility.

Ans: True Difficulty: Medium Section Ref: 13.5 IT Strategy and Emerging Computing Environments AACSB: Use of Information Technology

Short Answer

42. _________ refers to the degree to which the IT staff understands the priorities of the business and expends its resources, pursues projects, and provides information consistent with these priorities.

Ans: IT-business alignment Difficulty: Easy Section Ref: 13.1 Alignment of Business and IT Strategies AACSB:

43. _________ is the facility with which another firm can copy the resource.

Ans: Imitability Difficulty: Hard Section Ref: 13.2 IT Strategy Initiation AACSB: Use of Information Technology

44. __________ refers to the ability of competing firms to substitute an alternative resource in lieu of the resources deployed by the first-moving firm in achieving an advantage.

Ans: Substitutability Difficulty: Easy Section Ref: 13.2 IT Strategy Initiation

AACSB:

45. The _________ lists major resource projects, including infrastructure, application services, data services, security services that are consistent with the long-range plan.

Ans: project portfolio Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB:

46. Business service management is an approach for linking _________ of IT to business goals to determine the impact on the business.

Ans: key performance indicators (KPIs) Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB:

47. The ___________ committee is a group of managers and staff representing various organizational units that establishes IT priorities and insures that the IS department is meeting the firm’s needs.

Ans: corporate steering Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB:

48. _________ are the things that must go right in order to help ensure the organization’s survival or success.

Ans: Critical success factors Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB:

49. _________ has been widely used by major corporations to facilitate IT planning that involves much uncertainty. It also has been particularly important to e-commerce planning.

Ans: Scenario planning Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB:

50. ___________ consists of developing the hardware, software, data communications and networks, facilities, personnel, and financial plans needed to execute the master development plan as defined in the requirements analysis.

Ans: Resource allocation Difficulty: Hard Section Ref: 13.3 IT Strategic Planning AACSB:

51. __________ is contracting work to be completed by an outside vendor.

Ans: Outsourcing Difficulty: Easy Section Ref: 13.4 Outsourcing, Offshoring, and IT as a Subsidy AACSB:

52. ____________ is outsourcing with a vendor located in a country other than the one in which the client company is based.

Ans: Offshore outsourcing Difficulty: Easy Section Ref: 13.4 Outsourcing, Offshoring, and IT as a Subsidy AACSB:

53. _________ is computing that is as available, reliable, and secure as electricity, water services, and telephony.

Ans: Utility computing Difficulty: Medium Section Ref: 13.5 IT Strategy and Emerging Computing Environments

AACSB:

54. _________ separates business applications and data from hardware resources, which can increase the flexibility of IT assets, allowing companies to consolidate IT infrastructure, reduce maintenance and administration costs, and prepare for strategic IT initiatives.

Ans: Virtualization Difficulty: Medium Section Ref: 13.5 IT Strategy and Emerging Computing Environments AACSB:

Essay

55. Identify and briefly explain two activities that can foster the IT-business alignment within an organization.

Ans: IT-business alignment can be fostered within an organization by focusing on activities central to alignment: 1. Understanding IT and Corporate Planning. A prerequisite for effective IT-business alignment is a deep understanding of business planning on the part of the CIO. 2. CIO is a Member of Senior Management. Full participation within the C-suite in company business activities gives the CIO knowledge of the company’s direction and the potential role of IT in supporting the company.

3. Shared Culture and Good Communications. Frequent, open, and effective communication is essential to ensure a shared culture and keep all apprised of planning activities and business dynamics.

4. Deep Commitment to IT Planning by Senior Management. Senior managers must maintain a deep commitment to IT planning to assure company success.

5. Shared Plan Goals. An explicit effort should be made to develop and evaluate goals shared by the business plan and the IT plan.

6. Deep End-User Involvement. The IT-business alignment should extend to deep involvement of the end-users with both IT planners and business planners.

7. Joint Architecture/Portfolio Selection. Overall corporate information needs and the necessary IT architecture should be addressed in IT strategic planning.

8. Identity of Plan Factors. A linkage between the business and IT plans should be made.

Difficulty: Hard Section Ref: 13.1 Alignment of Business and IT Strategies AACSB: Critical thinking

56. Discuss how IT can add value to a company directly and indirectly.

Ans: IT can add value to a company either directly or indirectly. IT can add value directly by reducing the costs associated with a given activity or subset of activities. Cost reduction usually occurs when IT enables the same activity or set of activities to be performed more efficiently.

Cost reduction is also possible when IT enables an activity to be redesigned such that it is performed more efficiently.

IT can add value indirectly by increasing revenues. The increase in revenues occurs when IT enables a firm to be more effective. IT enables the firm to grow in terms of service and revenue without adding personnel.

Difficulty: Medium Section Ref: 13.2 IT Strategy Initiation AACSB: Use of Information Technology

57. Discuss two ways to improve collaboration between the IS department and end-users.

Ans: To improve collaboration, end users representing important business units can be members of the steering committee. Other means of improving IS department–end-user relationships is the use of service-level agreements (SLAs). Service-level agreements (SLAs) are formal agreements regarding the division of computing responsibility between end users and the IS department and the expected services to be rendered by the IS department. A service-level agreement can be viewed as a contract between each end-user unit and the IS department.

The corporate steering committee is a group of managers and staff representing various organizational units that is set up to establish IT priorities and to ensure that the IS department is meeting the needs of the enterprise.

Difficulty: Medium Section Ref: 13.3 IT Strategic Planning AACSB:

Chapter: Chapter 14: Managing IT Projects, Process Improvement, and Organizational Change

Multiple Choice

1. Which of the following is not an element of the technology adoption process? a) the communication channels used by potential adopters b) the relative advantage of the technology c) the social system into which the technology is introduced d) the speed of adoption Ans: b Difficulty: Hard Section Ref: 14.1 Adopting IT Projects AACSB:

2. A(n) _________ is the person who promotes the benefits of a new information system on an ongoing basis and across different levels of the organization. a) adopter b) champion c) CFO d) entrepreneur Ans: b Difficulty: Easy Section Ref: 14.1 Adopting IT Projects AACSB:

3. Apple’s launch of the iPhone generated significant press and interest. This launch is an example of a: a) hype cycle b) priority matrix c) slope of enlightenment d) technology trigger Ans: d Difficulty: Medium Section Ref: 14.1 Adopting IT Projects AACSB:

4. Categories of technology adopters include each of the following except: a) innovators b) laggards c) movers d) late majority Ans: c Difficulty: Medium Section Ref: 14.1 Adopting IT Projects AACSB:

5. Which of the follow is not a distinguishing characteristic of innovators? a) slightly above average in age experience b) generally high financial status c) risk takers d) well educated Ans: a Difficulty: Medium Section Ref: 14.1 Adopting IT Projects AACSB: Reflective thinking

6. Compared to other types of IT adopters, _________ tend to be risk averse and pay little attention to the opinions of others. a) late majority b) laggards c) early majority d) non-adopters Ans: b Difficulty: Medium Section Ref: 14.1 Adopting IT Projects AACSB:

7. When a company implements a new information system, typically there is a(n): a) change in the way business is conducted. b) change in IT infrastructure

c) increase in competitive advantage d) decrease in accountability Ans: a Difficulty: Medium Section Ref: 14.1 Adopting IT Projects AACSB: Reflective thinking

8. Data centers, networks, data warehouses, and corporate knowledge bases are examples of ___________ because they provide an IT foundation for the enterprise. a) cross-functional applications b) IT applications c) IT infrastructure d) system implementations Ans: c Difficulty: Medium Section Ref: 14.2 Implementing IT Projects AACSB:

9. Which statement about research organizations is not true? a) Research organizations produce numerous reports that are useful to managers in assessing suitable technologies for IT-based systems. b) Gartner, Inc. and Forrester publish informative articles that assess the current status of different technologies. c) Gartner, Inc. and Forrester are widely respected research firms with low cost subscriptions and subscribers from a majority of organizations. d) Forrester hosts an IT Forum annually to inform and educate IT professionals about newly emerging technologies and IT methodologies.

Ans: c Difficulty: Hard Section Ref: 14.2 Implementing IT Projects AACSB:

10. The process of implementing a new information system is: a) scheduled to coincide with the beginning or ending of the fiscal year. b) complex. c) best done by the end-users. d) done using the parallel approach.

Ans: b Difficulty: Medium Section Ref: 14.2 Implementing IT Projects AACSB: Reflective thinking

11. When an information system will be implemented at numerous business units at various locations, the most appropriate implementation approach to minimize user resistance and maximize user confidence is the _____________ approach. a) parallel b) phased c) pilot d) plunge Ans: c Difficulty: Medium Section Ref: 14.2 Implementing IT Projects AACSB:

12. When an information system consists of several modules that are tested as they are developed, the appropriate implementation strategy is the _____________ approach, which can be used along with other approaches. a) parallel b) phased c) pilot d) plunge Ans: b Difficulty: Medium Section Ref: 14.2 Implementing IT Projects AACSB:

13. When the primary objective is to minimize risk during the implementation of a new information system regardless of transition costs, the most appropriate implementation strategy is the _____________ approach. a) parallel b) phased c) pilot d) plunge

Ans: a Difficulty: Medium Section Ref: 14.2 Implementing IT Projects AACSB:

14. When the primary objective is to minimize transition costs during the implementation of a new information system regardless of risk, the most appropriate implementation strategy is the _____________ approach. a) parallel b) phased c) pilot d) plunge Ans: d Difficulty: Medium Section Ref: 14.2 Implementing IT Projects AACSB:

15. It is estimated that ____________ of IT-based projects fail. a) 10 to 25% b) 25 to 33% c) 30 to 70% d) over 75% Ans: c Difficulty: Medium Section Ref: 14.2 Implementing IT Projects AACSB:

16. IT-implementation success and failure is influenced by each of the following factors except: a) level of risk b) user acceptance c) user support d) user training Ans: c Difficulty: Medium Section Ref: 14.2 Implementing IT Projects AACSB:

17. __________ involves the use of information technologies and tools to model, measure, manage, and improve core business processes enabling companies to be more competitive and better serve customers. a) Business process management b) Business process engineering c) Business activity monitoring d) Workflow management Ans: a Difficulty: Easy Section Ref: 14.3 Business Process Management AACSB:

18. Formerly, it took IBM Credit Corporation from 6 days to two weeks to issue credit to a customer. Often they would lose customers during the lengthy approval process. Today, the process takes only minutes or hours. This change is an example of: a) Business process management b) Business process reengineering c) Business activity monitoring d) Workflow management Ans: b Difficulty: Medium Section Ref: 14.3 Business Process Management AACSB: Reflective thinking

19. To put an effective business process management (BPM) strategy into place, it is critical that companies focus strongly on: a) prospective and current customers b) how operations are performed c) people who perform the operations d) desired outcomes Ans: d Difficulty: Medium Section Ref: 14.3 Business Process Management AACSB: Reflective thinking

20. A business process model is: a) a snapshot of processes within a specific time period. b) a draft of inefficient processes to be eliminated. c) similar to an income statement in that it looks at the entire organization over a long period of time. d) based on Six Sigma.

Ans: c Difficulty: Hard Section Ref: 14.3 Business Process Management AACSB:

21. _________ is a methodology to manage process variations that cause defects, defined as unacceptable deviation from the mean or target, and to systematically work toward managing variation to prevent those defects. a) Total quality management (TQM) b) ISO 9000 c) The PDCA Cycle d) Six Sigma Ans: d Difficulty: Hard Section Ref: 14.3 Business Process Management AACSB:

22. In the vast majority of cases, the problems that occur when introducing new systems into an organization are due to: a) the complexity of the technology. b) hardware or software malfunction. c) people having to relate to others and work in ways that conflict with their basic values. d) insufficient tech support.

Ans: c Difficulty: Medium Section Ref: 14.4 Change Management and Organizational Transformation AACSB:

23. All of the following describe change management issues arising from an IS implementation except:

a) The problems with people can be resolved with training sessions for those who want to take them. b) Problems with hardware and software usually can be fixed by redesign, integration or upgrade. c) Disgruntled people can be constant threats to the success of any project that involves change. d) The origins for resistance to system implementation can often be attributed to the redistribution of power.

Ans: a Difficulty: Medium Section Ref: 14.4 Change Management and Organizational Transformation AACSB:

24. What is the sequence of stages of Lewin’s three-stage change model? a) negotiating, unfreezing, changing b) acceptance, transition, change c) unfreezing, change, (re)freezing d) bargaining, compromising, agreeing Ans: c Difficulty: Medium Section Ref: 14.4 Change Management and Organizational Transformation AACSB:

25. Which of the following is not one of the ten principles of change management? a) Address the ‘human side’ of change systematically b) Start with the end-users c) Involve every layer or level of the organizations d) Make a formal written case for the change.

Ans: b Difficulty: Medium Section Ref: 14.4 Change Management and Organizational Transformation AACSB:

True/False

26. The IT adoption process is a linear process consisting of five stages, which ends with the decision stage that leads to adoption or rejection of the innovation.

Ans: False Difficulty: Medium Section Ref: 14.1 Adopting IT Projects AACSB:

27. Approximately 50 percent of the general population is slow to adopt new technology.

Ans: True Difficulty: Medium Section Ref: 14.1 Adopting IT Projects AACSB:

28. Age, gender and education are important individual differences that influence when certain individuals will adopt new technology and how easily they will accept the associated changes.

Ans: True Difficulty: Easy Section Ref: 14.1 Adopting IT Projects AACSB:

29. The successful adoption and implementation of an information system depends on the proper assessment of numerous individual, technology, task, organizational, and environmental factors.

Ans: True Difficulty: Easy Section Ref: 14.1 Adopting IT Projects AACSB: Reflective thinking

30. The first step in adopting a new IT-based system is to identify the technologies that competitors have adopted and the cost of those technologies.

Ans: False Difficulty: Medium Section Ref: 14.1 Adopting IT Projects AACSB: Reflective thinking

31. Gartner’s Emerging Hype Cycle has five stages that reflect the basic IT adoption path starting with a trigger point, through overblown hype, and then enduring disillusionment, before finally becoming mainstream and accepted.

Ans: True Difficulty: Medium Section Ref: 14.1 Adopting IT Projects AACSB:

32. IT infrastructures consist of the systems and programs for achieving specific objectives, such as payroll processing or order fulfillment.

Ans: False Difficulty: Medium Section Ref: 14.2 Implementing IT Projects AACSB:

33. An appropriate implementation approach for mission critical information systems is the plunge approach.

Ans: False Difficulty: Medium Section Ref: 14.2 Implementing IT Projects AACSB: Reflective thinking

34. Top management support is as important in IT implementation as it is in IT adoption.

Ans: True Difficulty: Hard Section Ref: 14.2 Implementing IT Projects AACSB:

35. The major factors determining the risk of IT projects are project size, organization size, and complexity of the implementation effort.

Ans: False Difficulty: Medium Section Ref: 14.2 Implementing IT Projects AACSB:

36. When users have the opportunity to provide input into the design and development of an IS, they are more inclined to buy-in to the system and less likely to resist it.

Ans: True Difficulty: Medium Section Ref: 14.2 Implementing IT Projects AACSB:

37. The activities of business process management consist of designing, analyzing, implementing, managing, and optimizing a process for both effectiveness and efficiency.

Ans: True Difficulty: Medium Section Ref: Section Ref: 14.3 Business Process Management AACSB:

38. Companies will not achieve significant productivity improvements from business process management (BPM) if bottlenecks within the processes are not corrected.

Ans: True Difficulty: Medium Section Ref: Section Ref: 14.3 Business Process Management AACSB: Reflective thinking

39. If organizations focus exclusively on automation and cost savings when managing business processes, they can achieve significant operational efficiencies and a competitive edge.

Ans: False Difficulty: Medium Section Ref: Section Ref: 14.3 Business Process Management AACSB: Reflective thinking

40. When faced with potential changes in organizational power from the implementation of a new IS, stakeholders tend to either consciously or unconsciously resist the implementation by delaying, sabotaging or insisting on the modification of system development.

Ans: True Difficulty: Medium Section Ref: 14.4 Change Management and Organizational Transformation AACSB: Reflective thinking

41. To minimize employees’ panic that could lead to resistance to a new and vital IS, communication about the system should be on a need to know basis until the time of implementation.

Ans: False Difficulty: Medium Section Ref: 14.4 Change Management and Organizational Transformation AACSB:

Short Answer

42. _________ is the degree to which the new system is perceived to fit with the existing values, past experiences and needs of potential adopters.

Ans: Compatibility Difficulty: Easy Section Ref: 14.1 Adopting IT Projects AACSB:

43. _________ is the degree to which the new system is perceived as being better than the system it replaces.

Ans: Relative advantage Difficulty: Hard Section Ref: 14.1 Adopting IT Projects AACSB: Use of Information Technology

44. After an organization understands the __________ in which an IT is operating, it needs to assess how new or established technologies are already being used.

Ans: social system Difficulty: Medium Section Ref: 14.1 Adopting IT Projects AACSB:

45. _________ is critical to the successful introduction of a new system because of the potentially extensive business changes that will be associated with its introduction.

Ans: Management support Difficulty: Medium Section Ref: 14.1 Adopting IT Projects AACSB:

46. A(n) ________ is the person who will promote the benefits of the new system across different levels of the organization and on an ongoing basis.

Ans: champion Difficulty: Medium Section Ref: 14.1 Adopting IT Projects AACSB:

47. The __________ is a simple diagramming technique that assesses a technology’s potential impact against the number of years it will take before it reaches mainstream adoption.

Ans: priority matrix Difficulty: Hard Section Ref: 14.1 Adopting IT Projects AACSB:

48. _________ refers to all organizational activities involved in the introduction, management and acceptance of technology to support one or more organizational processes.

Ans: Implementation Difficulty: Medium

Section Ref: 14.2 Implementing IT Projects AACSB:

49. Using the _________ implementation approach, both new and old systems operate simultaneously for a designated period of time until a final cutover.

Ans: parallel Difficulty: Easy Section Ref: 14.2 Implementing IT Projects AACSB:

50. ___________ is the extent to which a new system is perceived as being useful and easy to use by the system users Ans: User acceptance Difficulty: Easy Section Ref: 14.2 Implementing IT Projects AACSB:

51. The activities of _________ consist of designing, analyzing, implementing, managing, and optimizing a process to improve effectiveness or efficiency.

Ans: business process management Difficulty: Easy Section Ref: 14.3 Business Process Management AACSB:

52. ____________ is the radical redesign of an organization’s business.

Ans: Business process reengineering Difficulty: Easy Section Ref: 14.3 Business Process Management AACSB:

53. _________ is an activity similar to drafting a blueprint for a house. It includes techniques and activities used as part of the larger business process management discipline.

Ans: Business process modeling Difficulty: Medium Section Ref: 14.3 Business Process Management AACSB:

54. _________ is a structured approach to transition individuals, teams and organizations from a current state to a desired future state. It includes managing change as part of systems development to avoid user resistance to business and system changes.

Ans: Change management Difficulty: Medium Section Ref: 14.4 Change Management and Organizational Transformation AACSB:

Essay

55. Identify the five different adopter categories and list two characteristics of each category.

How do users’ attitudes toward change influence the adoption process?

Ans: Also see Table 14.1.

Innovators.

▪ risk-taking ▪ generally high financial status ▪ well educated ▪ younger than average Early adopters.

▪ slightly above average in age, education and experience ▪ resources are more limited than those of innovators or early adopters ▪ risk averse Early majority.

• less educated and older than average • form bulk of membership in formal organizations Late majority.

• less educated and older than average • risk averse • form bulk of membership in formal organizations Laggards.

• least educated and oldest of all categories • risk averse

• pay little attention to the opinions of others Those who have a positive attitude toward change are more likely to adopt earlier. They adapt to new systems more easily than those who prefer to stay with the status quo.

Section Ref: 14.1 Adopting IT Projects AACSB: Critical thinking

56. Identify and discuss the four implementation approaches. Under what conditions is each approach appropriate?

Ans: In the plunge approach, the old system is turned off and the new system is put into operation simultaneously. This approach is appropriate if an organization is under time pressure to comply with a new government regulation or a new business policy comes into effect with little prior notice.

In the parallel approach, both new and old systems operate concurrently for a designated period of time. This approach is appropriate if risk needs to be minimized because major flaws in the new system can be resolved without negative consequences.

In the pilot approach, the system is being implemented in more than one business unit or geographic location. This approach is appropriate when a higher level of user confidence and a lower level of user resistance over time are important.

In the phased approach, the system consists of several modules or versions. This approach is appropriate when each module or version of the system is implemented as it is developed and tested.

Difficulty: Medium Section Ref: Section Ref: 14.2 Implementing IT Projects AACSB: Use of Information Technology

57. Identify and explain two of the ten principles of change management .

Ans: 1. Address the human side of change systematically – Develop a formal approach for managing change and adapt it often as circumstances change within the organization.

2. Start at the top – Top managers must show full support for the change to challenge and motivate the rest of the organization.

3. Involve every layer – Cultivate leaders at various levels to support the change so that the change ‘cascades’ down.

4. Make the formal case –A formal written statement of the envisioned change helps create and solidify alignment between change leaders and the change team.

5. Create Ownership – Top management leaders need to work with the design teams to fully understand the changes that will result from the introduction or modification of technology.

6. Communicate the Message –Employees must be repeatedly provided with the right information at the right time through multiple channels to ensure they understand the consequences of the change initiative.

7. Assess the Cultural Landscape – As change cascades down through organizational levels, the culture and behaviors of employees must be addressed up front.

8. Address Culture Explicitly – Once understood, the culture must be addressed head on.

9. Prepare for the Unexpected – No matter how well a plan is executed, there are always surprises along the way.

10. Speak to the Individual – Employees must be involved in the change process and individual rewards must be offered to reinforce the organization’s commitment to the change process.

Difficulty: Medium Section Ref: 14.4 Change Management and Organizational Transformation AACSB:

Chapter: Chapter 15: Impact of IT on Enterprises, Users, and the Environment

Multiple Choice

1. What does the Law of Accelerating Returns suggest? a) Investments in energy-conserving data centers and other computing facilities can reduce the long-term costs of ownership and maintenance. b) Organizations that invest in green hardware find that the energy savings exceed the additional costs of that hardware. c) The return on IT investments increases exponentially because technological change is exponential rather than linear. d) The time interval between significant events gets shorter as time passes because technological change is exponential rather than linear.

Ans: d Difficulty: Hard Section Ref: 15.1 New and Accelerating Trends in IT AACSB: Critical thinking

2. The potential business value of the AI (artificial intelligence) poker-playing computer named Polaris is its ability to: a) adjust and adapt to an opponent's strategy. b) play chess like an expert. c) make strategic decisions under certainty. d) substitute for human workers on routine jobs.

Ans: a Difficulty: Medium Section Ref: 15.1 New and Accelerating Trends in IT AACSB:

3. Offshore outsourcing is an example of the trend toward ___________, which is blurring geographic barriers. a) globalization b) digitalization c) robotics d) mass integration

Ans: a Difficulty: Easy Section Ref: 15.1 New and Accelerating Trends in IT AACSB:

4. IT is expanding the __________ trend into such activities as processing of insurance claims, transcription of medical records, engineering, and market research. a) digitalization b) globalization c) outsourcing d) macroeconomic Ans: c Difficulty: Medium Section Ref: 15.1 New and Accelerating Trends in IT AACSB: Critical thinking

5. In the mid-1990s, the Web and ________ were transformational ITs. They enabled quantum leaps forward in corporate IT, creating a platform for changes during the first decade of the 21st century. a) blogs b) enterprise information systems c) social networks d) wikis Ans: b Difficulty: Medium Section Ref: 15.1 New and Accelerating Trends in IT AACSB:

6. Each of the following is a current or emerging trend being driven by IT except: a) Robots will be employed or engaged in sports, war, medicine, business, entertainment, leisure, and home care. b) Telemedicine or telehealth technologies will increase the number of patients who physicians treat remotely and lower the costs associated with treatment. c) Privacy standards, laws and safeguards are becoming very similar in countries where outsourcing of data processing occurs. d) Wireless networks and sensors can improve urban operations, reduce traffic congestion, and help drivers find curbside parking to reduce the greenhouse gas carbon dioxide.

Ans: c Difficulty: Medium Section Ref: 15.1 New and Accelerating Trends in IT AACSB: Ethical and legal responsibilities in organizations and society

7. The shift by American companies toward __________ and the consequent relocation of many operations overseas caused huge shifts in labor supply and demand. a) offshoring b) telework c) economies of scale d) ergonomics Ans: a Difficulty: Medium Section Ref: 15.1 New and Accelerating Trends in IT AACSB: Ethical and legal responsibilities in organizations and society

8. The general purpose of _________ is to increase efficiency, to reduce costs, and to acquire innovative capabilities quickly by buying the capabilities instead of developing them. a) ergonomics b) offshoring c) outsourcing d) enterprise 2.0 Ans: c Difficulty: Medium Section Ref: 15.1 New and Accelerating Trends in IT AACSB:

9. The latest business model is _________, which has become the cornerstone of the "lean and mean" way of doing business and staying competitive. a) economies of scale b) offshoring c) green computing d) business process outsourcing (BPO) Ans: d Difficulty: Medium Section Ref: 15.1 New and Accelerating Trends in IT AACSB:

10. IT delivery models that are deploying to acquire or maintain technology that enables core business functions include all of the following except: a) storage as a service b) communication as a service c) computer cluster d) business process utilities Ans: c Difficulty: Hard Section Ref: 15.1 New and Accelerating Trends in IT AACSB:

11. _________ began in 2006 as a new way to collaborate using freeform social software platforms, such as blogs, within companies, or between companies and their partners or customers. a) Business process utilities b) Communication as a service c) Enterprise Web 2.0 d) Business process outsourcing Ans: c Difficulty: Medium Section Ref: 15.2 Current Perspectives on the Enterprise Web 2.0 AACSB:

12. Which of the following statements does not describe Enterprise 2.0? a) It centralizes control and communication. b) It involves moving into a Web setting where workers can more easily conduct their day-to-day personal interactions. c) It is indifferent to formal organizational structure. d) It can replace other communication and knowledge management systems.

Ans: a Difficulty: Medium Section Ref: 15.2 Current Perspectives on the Enterprise Web 2.0 AACSB: Ethical and legal responsibilities in organizations and society

13. The role of _________ in business will play an increasing role in workers’ ability to connect with others and share expertise. a) business intelligence b) Google Mobile App c) RSS d) social networking Ans: d Difficulty: Medium Section Ref: 15.2 Current Perspectives on the Enterprise Web 2.0 AACSB:

14. Potential benefits to the community and society of telecommuting include each of the following except: a) Allows the movement of job opportunities to areas of high unemployment. b) Increases employment opportunities for the homebound. c) Decreases workers’ involvement in office politics. d) Reduces traffic accidents and resulting injuries or deaths.

Ans: c Difficulty: Medium Section Ref: 15.3 Operating Greener Businesses and Eco-Friendly Data Centers AACSB: Critical thinking

15. Potential organizational benefits of telework are the following except: a) Reduces office space needed. b) Decreases labor pool and competitive advantage in recruitment. c) Decreases employee turnover, absenteeism, and sick leave usage. d) Improves job satisfaction and productivity Ans: b Difficulty: Hard Section Ref: 15.3 Operating Greener Businesses and Eco-Friendly Data Centers AACSB: Critical thinking

16. Which is not an impact of IT on structure, authority, power, and job content? a) Expert systems increase the need for technical experts. b) IT increases span of control of supervisors. c) Resistance to changes in job skills is common, and can lead to unpleasant confrontations between employees and management.

d) Knowledge is power, and those who control information and knowledge are likely to gain power.

Ans: a Difficulty: Hard Section Ref: 15.4 Impacts of Too Much Information and Connectivity AACSB: Critical thinking

17. Which is not a factor that must be taken into consideration when deciding on the design of a data center? a) affordability and performance b) heat and space requirements c) power consumption d) presence and privacy Ans: d Difficulty: Medium Section Ref: 15.3 Operating Greener Businesses and Eco-Friendly Data Centers AACSB: Critical thinking

18. All of the following make it possible for professionals to telecommute, or work from outside the office, except: a) broadband Internet access b) data centers c) mobile computing d) virtual private networks Ans: b Difficulty: Medium Section Ref: 15.3 Operating Greener Businesses and Eco-Friendly Data Centers AACSB: Use of Information Technology

19. Information technology’s capability to introduce ever-growing amounts of data and information into our lives can exceed our capacity to keep up with them, leading to a condition known as: a) information anxiety b) data stress c) information overload d) poor problem solving

Ans: c Difficulty: Medium Section Ref: 15.4 Impacts of Too Much Information and Connectivity AACSB:

20. Information that might have prevented some of the September 11 attacks apparently existed somewhere within the vast quantity of data collected by various agencies in the intelligence community. This situation indicates that: a) systems for storing the data were not functioning. b) systems for using the information lagged far behind the ability to collect it. c) users did not understand the system because they did not receive enough training. d) access to the database systems were too restricted.

Ans: b Difficulty: Medium Section Ref: 15.4 Impacts of Too Much Information and Connectivity AACSB:

21. _________ technology optimizes the capacity and processing power of data center servers so that fewer servers are needed to provide the needed processing power. a) Green b) Enterprise 2.0 c) Virtual private network d) Virtualization Ans: d Difficulty: Medium Section Ref: 15.3 Operating Greener Businesses and Eco-Friendly Data Centers AACSB: Ethical understanding and reasoning abilities

22. Which of the following is not true? a) The projected growth of IT-related jobs is on the rise. b) Five of the top ten highest-growth jobs are IT-related. c) The risks and costs of telecommuting outweigh the benefits. d) Many IT-related jobs can be performed effectively from home due to broadband and VPNs. Ans: c Difficulty: Medium Section Ref: 15.4 Impacts of Too Much Information and Connectivity AACSB:

23. Electronic surveillance weapons that can be used to combat crime and other security threats include the following except: a) biometrics b) keystroke logging c) passwords d) network intrusion detection systems Ans: c Difficulty: Hard Section Ref: 15.5 Managerial Issues AACSB: Use of Information Technology

24. Which of the following is not true about information quality? a) Materials and information that are available from reputable sources can be trusted to be of high quality. b) The Data Quality Act of 2001 and the Sarbanes-Oxley Act of 2002 impose strict information quality requirements on government agencies and companies. c) Information quality depends on complete, accurate, up-to-date, and consistent with the purpose for which they are used. d) Millions of individuals face information quality issues everyday as they try to find information online, or in databases, wikis, blogs, and newsfeeds.

Ans: a Difficulty: Medium Section Ref: 15.4 Impacts of Too Much Information and Connectivity AACSB: Ethical and legal responsibilities in organizations and society

25. Problems caused by spam include all of the following except: a) it is anti-green b) it harms productivity c) it has a negative global economic impact d) it is dehumanizing Ans: d Difficulty: Medium Section Ref: 15.4 Impacts of Too Much Information and Connectivity AACSB: Ethical and legal responsibilities in organizations and society

True/False

26. In his article “Law of Accelerating Returns,” Ray Kurzweil, an expert on artificial intelligence, had forecasted that the equivalent of 4,000 years of technological advancement will occur during the first two decades, from 2000 to 2020.

Ans: True Difficulty: Easy Section Ref: 15.1 New and Accelerating Trends in IT AACSB:

27. IT developments and IT management will play major roles in accelerating and responding to whatever changes occur in enterprises, careers, social lives, energy prices, and the condition of the environment.

Ans: True Difficulty: Medium Section Ref: 15.1 New and Accelerating Trends in IT AACSB:

28. Throughout history, progress has been marked by the substitution of new products, services, and processes for existing ones and by the substitution of people for machines.

Ans: False Difficulty: Medium Section Ref: 15.1 New and Accelerating Trends in IT AACSB:

29. Video, imaging, and mobile communication technologies used in telehealth can improve the quality and delivery of healthcare and reduce costs. But security concerns may constrain its growth.

Ans: True Difficulty: Medium Section Ref: 15.1 New and Accelerating Trends in IT AACSB: Critical thinking

30. Congestion management and parking management systems that are based on parking sensors and wireless networked meters have been widely and successfully deployed throughout major U.S. cities.

Ans: False Difficulty: Easy Section Ref: 15.1 New and Accelerating Trends in IT AACSB:

31. Laws and regulations, including the Sarbanes-Oxley Act, make CEOs and CFOs personally liable for the quality and accuracy of financial information disclosed to the public.

Ans: True Difficulty: Medium Section Ref: 15.4 Impacts of Too Much Information and Connectivity AACSB: Ethical and legal responsibilities in organizations and society

32. Unlike the outsourcing of manufacturing, the outsourcing of white-collar services has not become mainstream because of privacy standards and security concerns.

Ans: False Difficulty: Medium Section Ref: 15.1 New and Accelerating Trends in IT AACSB: Ethical and legal responsibilities in organizations and society

33. Processing confidential data offshore creates valid concerns about identity theft and privacy issues.

Ans: True Difficulty: Medium Section Ref: 15.1 New and Accelerating Trends in IT AACSB: Ethical and legal responsibilities in organizations and society

34. Enterprise Web 2.0 consists of ways for workers to collaborate and share knowledge using freeform social software, such as blogs, wikis, RSS, and social networking.

Ans: True Difficulty: Easy Section Ref: 15.2 Current Perspectives on the Enterprise Web 2.0 AACSB:

35. Because of freedom of speech and expression, we do not harm ourselves personally or professionally by the content we post on logs, or the friends we keep on social networking pages.

Ans: False Difficulty: Medium Section Ref: 15.2 Current Perspectives on the Enterprise Web 2.0 AACSB:

36. Virtualization technology is eco-friendly because it optimizes the capacity and processing power of servers so that fewer servers are needed to provide the necessary processing power.

Ans: True Difficulty: Medium Section Ref: 15.3 Operating Greener Businesses and Eco-Friendly Data Centers AACSB: Use of Information Technology

37. According to an IDC survey, small and midsize companies are attempting to use green manufacturing applications that support a renewable way of producing products.

Ans: True Difficulty: Easy Section Ref: 15.3 Operating Greener Businesses and Eco-Friendly Data Centers AACSB: Critical thinking

38. Sustainability regulations such as the European Union’s RoHS Directive, which restricts the use of certain hazardous substances that might be used in the manufacture of CRTs and LCDs, are not having an impact on supply chains because of their complexity.

Ans: False Difficulty: Medium Section Ref: 15.3 Operating Greener Businesses and Eco-Friendly Data Centers AACSB:

39. The Electronic Product Environmental Assessment Tool, or EPEAT, is a searchable database of computer hardware that meets strict environmental criteria and that is maintained by the Green Electronics Council.

Ans: True Difficulty: Medium Section Ref: 15.3 Operating Greener Businesses and Eco-Friendly Data Centers AACSB: Use of Information Technology

40. All of the impacts of IT on the quality of human life have been positive; for example, IT has relieved people from tedious and hazardous tasks.

Ans: False Difficulty: Easy Section Ref: 15.4 Impacts of Too Much Information and Connectivity AACSB: Ethical and legal responsibilities in organizations and society

41. Spam and other forms of electronic noise contribute to the problem of information overload.

Ans: True Difficulty: Easy Section Ref: 15.4 Impacts of Too Much Information and Connectivity AACSB: Ethical and legal responsibilities in organizations and society

Short Answer

42. __________ will increasingly substitute for human workers at home, in the workplace, in the military, and for security.

Ans: Robots Difficulty: Medium Section Ref: 15.1 New and Accelerating Trends in IT AACSB:

43. __________ is the use of information and telecommunications technologies to support preventative and curative long-distance clinical health care, public health, and health administration.

Ans: Telehealth Difficulty: Medium Section Ref: 15.1 New and Accelerating Trends in IT AACSB: Use of Information Technology

44. Telecommuting by health care professionals is having a promising impact in health care. This type of telecommuting is called _____________.

Ans: telemedicine Difficulty: Easy Section Ref: 15.1 New and Accelerating Trends in IT AACSB: Use of Information Technology

45. Despite the potential benefits of telemedicine/health, issues related to _________ may constrain its growth.

Ans: information security Difficulty: Easy Section Ref: 15.1 New and Accelerating Trends in IT AACSB: Use of Information Technology

46. IT’s capability to introduce huge and growing amounts of data into our lives can exceed our capacity to keep up with them, leading to _________ .

Ans: information overload Difficulty: Medium Section Ref: 15.4 Impacts of Too Much Information and Connectivity AACSB:

47. _________ is the practice of indiscriminately broadcasting unsolicited messages via e-mail and over the Internet; and one of the most widespread forms of digital noise.

Ans: Spamming Difficulty: Easy

Section Ref: 15.4 Impacts of Too Much Information and Connectivity AACSB:

48. Many people feel a loss of identity, called__________, because of computerization that reduces or eliminates the human element.

Ans: dehumanization Difficulty: Medium Section Ref: 15.4 Impacts of Too Much Information and Connectivity AACSB: Reflective thinking

49. _________ is the science of adapting machines and work environments to people.

Ans: Ergonomics Difficulty: Medium Section Ref: 15.4 Impacts of Too Much Information and Connectivity AACSB: Use of Information Technology

50. __________ is the process of hiring another company to handle business activities.

Ans: Business process outsourcing Difficulty: Medium Section Ref: 15.1 New and Accelerating Trends in IT AACSB:

51. A _________ is a group of computers linked via a LAN and working together to form the equivalent of a single computer.

Ans: Computer cluster Difficulty: Easy Section Ref: Introduction AACSB:

52. __________ is the application of Web 2.0 technologies in the enterprise.

Ans: Enterprise Web 2.0

Difficulty: Easy Section Ref: 15.2 Current Perspectives on the Enterprise Web 2.0 AACSB:

53. There is a difficult tradeoff between privacy and ___________.

Ans: security Difficulty: Medium Section Ref: 15.2 Current Perspectives on the Enterprise Web 2.0 AACSB:

54. __________ is the study and practice of eco-friendly computing resources. It is now a key concern of businesses in all industries--not just environmental organizations.

Ans: Green computing Difficulty: Medium Section Ref: 15.4 Impacts of Too Much Information and Connectivity AACSB: Reflective thinking

Essay

55. List two potential benefits of telecommuting or virtual work to individuals. List two potential benefits of telecommuting or virtual work to communities.

Ans: See Table 15.1 Difficulty: Medium Section Ref: 15.3 Operating Greener Businesses and Eco-Friendly Data Centers AACSB: Critical thinking

56. Identify two impacts of the IT revolution on structure, authority, power, or job content.

Ans: See Table 15.2 Difficulty: Medium Section Ref: 15.4 Impacts of Too Much Information and Connectivity AACSB: Use of Information Technology

57. Explain how an enterprise can operate greener to significantly cut costs, improve space efficiency, and increase server utilization levels.

Ans: To operate greener, enterprises can: • Virtualize desktops and data centers. Most stand-alone servers are highly under-utilized.

Virtualization technology optimizes the capacity and processing power of servers so that fewer servers are needed to provide the necessary processing power. The result is savings in energy, space, and recycling.

• Turn off unused computers.

• Enable power management features.

• Replace old servers with new energy-efficient servers.

• Replace low-capacity disk technology with high-capacity.

• Move old data to tape Difficulty: Medium Section Ref: 15.3 Operating Greener Businesses and Eco-Friendly Data Centers AACSB:

Chapter 16: Acquiring and Developing Business Applications and Infrastructure

Multiple Choice

1. Which of the following is not a reason why the acquisition of IT systems is complex? a) There is a wide diversity of IT applications. b) IT systems continue to change or upgrade over time. c) IT systems may involve several business partners. d) Acquisition of IT systems involves several vendors.

Ans: d Difficulty: Medium Section Ref: 16.1 The Framework of IT Application Acquisition AACSB:

2. The process of acquiring an IT application begins with which of the following? a) Planning the IT application to align it with the organization's overall business plan. b) Creating an IT architecture plan. c) Selecting an acquisition approach. d) Securing funding for the IT application.

Ans: a Difficulty: Medium Section Ref: 16.1 The Framework of IT Application Acquisition AACSB: Critical thinking

3. Major options for acquiring an IT application do not include: a) Build the system in-house. b) Outsource a custom-made system through utility computing. c) Have a vendor build a customized system. d) Lease standard software from an application service provider (ASP).

Ans: b Difficulty: Medium Section Ref: 16.1 The Framework of IT Application Acquisition AACSB:

4. When must testing of IT applications be done? a) After the application has been rolled out to end-users. b) After applications have been integrated with a database. c) When the application is installed. d) Before final payment to the vendor.

Ans: c Difficulty: Medium Section Ref: 16.1 The Framework of IT Application Acquisition AACSB: Critical thinking

5. Which testing is done to determine whether the application meets the original business objectives and vision? a) acceptance testing b) integration testing c) unit testing d) usability testing Ans: a Difficulty: Medium Section Ref: 16.1 The Framework of IT Application Acquisition AACSB:

6. Which type of testing is done to verify that the combination of modules function together correctly? a) acceptance testing b) integration testing c) unit testing d) usability testing Ans: b Difficulty: Medium Section Ref: 16.1 The Framework of IT Application Acquisition AACSB:

7. Which tests the quality of the user’s experience when interacting with the portal or Web site? a) acceptance testing b) integration testing c) unit testing

d) usability testing Ans: d Difficulty: Medium Section Ref: 16.1 The Framework of IT Application Acquisition AACSB:

8. Buying a standard commercial software package to acquire an IT application is called the __________ approach. a) package b) lease c) turnkey d) justification Ans: c Difficulty: Medium Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB:

9. Which of the following is not true of the buy option for acquiring an IT application? a) The buy option is especially attractive if the software vendor allows for modifications. b) The buy option is suitable in cases of high obsolescence rates. c) The buy option is attractive when the package cost is low. d) The buy option is suitable when organizational needs are satisfied by one software package.

Ans: b Difficulty: Medium Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB: Critical thinking

10. Leasing is very advantageous in cases where: a) only low maintenance will be needed. b) the cost of buying is very high. c) the enterprise has excess network capacity. d) internal staff has extensive expertise.

Ans: b Difficulty: Hard Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB: Critical thinking

11. Software that is rented and paid for on a subscription basis is referred to as: a) application service provider (ASP) b) outsourcing c) software-as-a-service (SaaS) d) vendor software Ans: c Difficulty: Medium Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB:

12. What is the biggest obstacle to renting software? a) the inability to integrate different applications. b) the inability to financially justify renting software. c) the low quality of rented software. d) the shortage of rented software.

Ans: a Difficulty: Medium Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB: Use of Information Technology

13. Web-based tools such as __________ make end-user development more efficient and effective. a) data servers b) Microsoft Office Suite c) SaaS d) wikis Ans: d Difficulty: Medium Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB: Use of Information Technology

14. Under which set of conditions is outsourcing of the IT application least appropriate? a) For small companies with few IT staff and small budgets. b) For large companies whose IT staff lack expertise in the application area.

c) When the objective of the IT application is to achieve a unique competitive advantage. d) When an IT application needs to be built quickly and special expertise is needed.

Ans: c Difficulty: Hard Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB: Critical thinking

15. Which is the development and use of ISs by people outside the IS department? a) ASP sourcing b) insourcing c) end-user computing d) offshore computing Ans: c Difficulty: Medium Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB: Use of Information Technology

16. Before a company decides how to acquire an IT application, it is necessary to understand the enterprise’s current __________ in the area the application is going to be used. a) business processes b) budget c) milestones d) systems development life cycle Ans: a Difficulty: Easy Section Ref: 16.2 Identifying, Justifying, and Planning IT Systems Applications AACSB:

17. ____________ are self-contained, self-describing business and consumer applications delivered over the Internet that users can select and combine through almost any device, ranging from personal computers to mobile phones. a) EDI b) extranets c) service-oriented architecture d) Web services Ans: d

Difficulty: Medium Section Ref: 16.5 Connecting to Databases, Enterprise Systems, and Business Partners: Integration AACSB:

18. ______________ is a method for restructuring that combines workflow systems and redesign methods. It is a blending of workflow, process management, and applications integration. a) Business process management b) Business process reengineering c) Business procedure design d) Business procedure alignment Ans: a Difficulty: Medium Section Ref: 16.6 Business Process Redesign AACSB:

19. All of the following describe business process redesign except: a) The traditional approach of looking at problems first and then seeking an IT solution is not appropriate for business process redesign. b) Business process redesign has a low failure rate. c) Process redesign can break old rules that limit how work is performed. d) The role of IT in redesigning business processes is increasing due to the Internet and intranets.

Ans: b Difficulty: Hard Section Ref: 16.6 Business Process Redesign AACSB:

True/False

20. IT architecture is a plan for organizing the underlying infrastructure and applications of the IT project.

Ans: True Difficulty: Medium Section Ref: 16.1 The Framework of IT Application Acquisition AACSB:

21. The only two viable options for acquiring an IT application are building the system in-house or having a vendor build the system.

Ans: False Difficulty: Medium Section Ref: 16.1 The Framework of IT Application Acquisition AACSB:

22. After all modules of the IT application have been installed, integration testing is done to verify that they work with other applications correctly.

Ans: True Difficulty: Medium Section Ref: 16.1 The Framework of IT Application Acquisition AACSB:

23. When unit tests show that each module of an IT application works correctly and integration tests show that all modules work together correctly, the application is ready to be rolled out to the end-users.

Ans: False Difficulty: Medium Section Ref: 16.1 The Framework of IT Application Acquisition AACSB:

24. It usually takes as much time, effort, and money to operate and maintain an application as it does to acquire and install it in the first place.

Ans: True Difficulty: Easy Section Ref: 16.1 The Framework of IT Application Acquisition AACSB:

25. To maintain their usefulness, IT applications need to be updated every two years to avoid problems due to rapid changes in the IT field.

Ans: False Difficulty: Easy Section Ref: 16.1 The Framework of IT Application Acquisition AACSB:

26. The three functions of project management tools are to keep the IT acquisition project on time, on budget, and within performance specifications.

Ans: True Difficulty: Medium Section Ref: 16.2 Identifying, Justifying, and Planning IT Systems Applications AACSB:

27. After a company has implemented an IT acquisition project and decided to acquire software, it is necessary to understand the organization’s current way of doing business in the area the application is going to be used.

Ans: False Difficulty: Hard Section Ref: 16.2 Identifying, Justifying, and Planning IT Systems Applications AACSB: Critical thinking

28. Standard features required by IT applications can be found in many commercial packages.

This option is known as the vendor approach.

Ans: False Difficulty: Medium Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB:

29. The buy option for acquiring IT applications is the best approach if the software vendor allows for modifications and high obsolescence is expected.

Ans: False Difficulty: Hard Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB: Critical thinking

30. Major ASPs for enterprise IT systems are Oracle, Microsoft, and IBM. Ans: True Difficulty: Medium Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB: Use of Information Technology

31. Web-based applications are suitable to the software-as-a-service (SaaS) model because they can be easily controlled at the server level.

Ans: True Difficulty: Hard Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB:

32. SaaS usually costs more than store-bought software, but the advantage is that it only requires users to install and boot up a browser.

Ans: False Difficulty: Hard Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB:

33. One of the major factors driving the switch to SaaS is that it reduces the risks involved in acquiring new software.

Ans: True Difficulty: Medium Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB: Critical thinking

34. Business processes should not simply be automated. The correct approach is first to recognize powerful solutions that make business process redesign possible, and then to seek the processes that can be helped by such solutions.

Ans: True Difficulty: Medium Section Ref: 16.6 Business Process Redesign AACSB: Critical thinking

Short Answer

35. After modules have been installed, _________ testing is needed to test the quality of the user’s experience when interacting with the recently acquired IT portal or Web site.

Ans: usability Difficulty: Medium Section Ref: 16.1 The Framework of IT Application Acquisition AACSB:

36. After modules have been installed, _________ testing is needed to determine whether the application meets the original business objectives and vision.

Ans: acceptance Difficulty: Medium Section Ref: 16.1 The Framework of IT Application Acquisition AACSB:

37. Standard features required by IT applications can be found in many commercial packages.

This option is also known as the _________ approach.

Ans: turnkey Difficulty: Medium Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB:

38. _________ an IT application is advantageous when a company wants to experiment with a package before making a heavy up-front buy investment, protect its own internal networks, quickly utilize the application, or rely on experts to establish a major project,

Ans: Leasing Difficulty: Medium Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB: Critical thinking

39. Software can be rented on a subscription basis. This is referred to as ________.

Ans: software-as-a-service (SaaS) Difficulty: Easy Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB: Use of Information Technology

40. Although in-house development of IT applications, which is called ___________, can be time consuming and costly, it may lead to IT applications that better fit an organization’s strategy and vision.

Ans: insourcing Difficulty: Medium Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB: Critical thinking

41. One type of in-house development that is very rapid involves building a __________ which is then improved in several iterations based on users’ feedback.

Ans: prototype Difficulty: Medium Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB:

42. _________ development is the development and use of information systems by people outside the formal IS area.

Ans: End-user Difficulty: Medium Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB:

43. _________ are self-contained, self-describing business and consumer applications delivered over the Internet that users can select and combine through almost any device, ranging from personal computers to mobile phones.

Ans: Web Services Difficulty: Medium Section Ref: 16.5 Connecting to Databases, Enterprise Systems, and Business Partners: Integration AACSB:

44. A(n) __________ is a collection of activities that convert inputs into outputs.

Ans: business process Difficulty: Easy Section Ref: 16.6 Business Process Redesign AACSB:

45. _____________ is a methodology in which an organization fundamentally and radically changes its business processes to achieve dramatic improvement.

Ans: Business process reengineering (BPR) Difficulty: Medium Section Ref: 16.6 Business Process Redesign AACSB: Use of Information Technology

46. An extension of business process reengineering (BPR) is __________, which is a new method for restructuring that combines workflow systems and redesign methods.

Ans: Business process management (BPM) Difficulty: Medium Section Ref: 16.6 Business Process Redesign AACSB:

47. Business processes that are managed via Web Services and SOA adapt faster to changing customer needs than home-grown or ________ applications.

Ans: purchased

Difficulty: Hard Section Ref: 16.6 Business Process Redesign AACSB: Ethical and legal responsibilities in organizations and society

Essay

48. Explain why an organization must analyze the need for applications and justify it in terms of cost and benefits.

Ans: Information system applications may be expensive. Therefore, an organization must analyze the need for applications and justify it in terms of cost and benefits. Because most organizations operate with tight budgets, this analysis must be carefully done. The investigation is usually divided into two parts. First, it is necessary to explore the need for each system; that is, find the information needs of the users and how the application will meet those needs. Second, it is necessary to justify it from a cost-benefit point of view. The need for information systems is usually related to organizational planning and to the analysis of its performance relative to its competitors.

Difficulty: Medium Section Ref: 16.2 Identifying, Justifying, and Planning IT Systems Applications AACSB: Reflective thinking

49. What are the risks of end-user development of IT applications?

Ans: End-user development has some limitations. End users may not be skilled enough in computers, so quality and cost may be jeopardized unless proper controls are installed. Also, many end users do not take time to document their work and may neglect proper security measures.

There are three categories of potential quality risks: (1) substandard or inappropriate tools used in IT application development; (2) risks associated with the development process (e.g., the inability to develop workable systems or the development of systems that generate erroneous results); and (3) data management risks; e.g., loss of data or use of stale, inappropriate, or incorrect data.

Difficulty: Medium Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB: Use of Information Technology

50. List two advantages and two disadvantages of the "buy" option for acquiring IT applications.

Ans: See Table 16.1 Difficulty: Medium Section Ref: 16.3 Acquiring IT Applications: Available Options AACSB:

Chapter: Chapter 17: Information Technology Economics

Multiple Choice

1. According to Moore’s Law as it relates to computing power, the price-to-performance ratio of computer chips _____________. a) increases exponentially b) increases slightly c) remains fairly constant d) decreases exponentially Ans: d Difficulty: Easy Section Ref: 17.1 Technology and Economic Trends and the Productivity Paradox AACSB: Critical thinking

2. Before new IT is adopted by an enterprise, it must be ____________. a) technically feasible b) economically feasible c) technically and economically feasible d) technically and economically feasible and provide a sustainable competitive advantage Ans: c Difficulty: Medium Section Ref: 17.1 Technology and Economic Trends and the Productivity Paradox AACSB:

3. As the cost of IT decreases, IT will become an even more significant factor in the production and distribution of almost every product and service. What ethical question does this predicted situation raise? a) Will it result in more unemployment? b) Will users spend a lot of time online? c) Will it provide large companies with a competitive advantage? d) Will consumers have to pay higher prices?

Ans: a Difficulty: Medium

Section Ref: 17.1 Technology and Economic Trends and the Productivity Paradox AACSB: Ethical understanding and reasoning abilities

4. The discrepancy between measures of investment in IT and measures of output at the national level has been called ______________ . a) digital divide b) productivity paradox c) price-to-performance ratio d) Moore’s Law Ans: b Difficulty: Medium Section Ref: 17.1 Technology and Economic Trends and the Productivity Paradox AACSB:

5. How do economists define productivity? a) Outputs divided by units produced b) Inputs divided by units produced c) Outputs divided by inputs d) Inputs divided by outputs Ans: c Difficulty: Medium Section Ref: 17.1 Technology and Economic Trends and the Productivity Paradox AACSB: Use of Information Technology

6. It is important to properly assess the benefits and costs of IT because an estimated ____________ percent of all capital investment in the U.S. is in IT. a) 10 b) 20 c) 30 d) 50 Ans: d Difficulty: Medium Section Ref: 17.1 Technology and Economic Trends and the Productivity Paradox AACSB: Use of Information Technology

7. How do investments in IT infrastructure differ from investments in specific IT applications? a) Investments in IT infrastructure are made to exist for a long time, and the infrastructure is shared by many applications throughout the enterprise. b) Investments in IT applications are more critical to the organization. c) Investments in IT applications are much larger than investments in infrastructure. d) Investments in IT infrastructure cannot be economically justified.

Ans: a Difficulty: Hard Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB: Critical thinking

8. Which is not a traditional tool used to evaluate investment decisions? a) internal rate of return b) net present value c) payback d) regression Ans: d Difficulty: Medium Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB:

9. Which is not true about return on investment (ROI)? a) The ROI measure is a percentage. b) The lower the ROI, the better. c) ROI is the most common traditional tool for evaluating capital investments d) ROI is calculated by dividing net annual income attributable to a project by the cost of the assets invested in the project Ans: b Difficulty: Medium Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB:

10. In preparing the business case for IT investment, potential revenue sources generated by IT and the Web that should be included are all of the following except: a) sales b) advertising fees c) supply chain fees

d) transaction fees Ans: c Difficulty: Medium Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB: Reflective thinking

11. A(n) ____________ is a written document that is used by managers to get funding for a specific application or project. a) business case b) investment proposal c) management model d) revenue model Ans: a Difficulty: Medium Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB:

12. An approach for IT cost evaluation is the total cost of ownership (TCO). The types of costs included in the TCO formula for a PC are all of the following except: a) Acquisition cost: hardware and software. b) Activity-based costing: virus damage. c) Control cost: standardization and security d) Operations cost: maintenance, power consumption, and installation.

Ans: b Difficulty: Medium Section Ref: 17.3 Advanced Methods for Justifying IT Investment and Using IT Metrics AACSB:

13. In the _____________ approach, all costs of IT are allocated to users based on actual costs and usage levels. a) benchmark b) chargeback c) metric d) outsourcing Ans: b Difficulty: Medium

Section Ref: 17.5 Economic Aspects of IT and Web-Based Systems AACSB:

14. Potential benefits of outsourcing include all of the following except: a) avoiding huge capital investment b) access to new ITs c) vendor redevelops similar systems for other clients d) less need for office space Ans: c Difficulty: Easy Section Ref: 17.5 Economic Aspects of IT and Web-Based Systems AACSB: Reflective thinking

15. What is the primary reason why a high proportion of IS development projects either fail completely or fail to meet some of the original targets? a) For economic issues, such as incorrect cost-benefit analysis or lack of funding. b) For technical issues, such as using very cutting-edge technology that has not been proven. c) Due to outsourcing risks, such as shirking or poaching. d) For managerial reasons, such as changes in strategic direction.

Ans: a Difficulty: Medium Section Ref: 17.5 Economic Aspects of IT and Web-Based Systems AACSB: Use of Information Technology

16. Because of the complexity and associated risks of developing computer systems, some IT managers refuse to develop systems in-house beyond a certain size. This is referred to as the one, one, ten rule which indicates that the development of a system that will take: a) less than one year, has a budget under one thousand dollars, and will involve more than ten departments. b) longer than one year, has a budget over one million dollars, and will require more than ten people. c) longer than one month, has a budget over one thousand dollars, and will serve more than ten end-users. d) longer than one month, has a budget over one million dollars, and will require more than ten people.

Ans: b Difficulty: Hard

Section Ref: 17.6 Managerial Issues AACSB:

17. An economic impact of EC is the trade-off between the number of customers a company can __________ and the amount of interactions and information services it can provide to them, which is referred to as __________. a) identify; service b) attract; scope c) reach; richness d) service; sales capacity Ans: c Difficulty: Hard Section Ref: 17.5 Economic Aspects of IT and Web-Based Systems AACSB: Use of Information Technology

18. The NPV and ROI methods work well with ____________ benefits. a) low-risk b) intangible c) tangible d) chargeback Ans: c Difficulty: Easy Section Ref: 17.1 Technology and Economic Trends and the Productivity Paradox AACSB: Use of Information Technology

True/False

19. The power of computer chips is expected to continue doubling every 5 months, while costs remain about the same.

Ans: False Difficulty: Easy Section Ref: 17.1 Technology and Economic Trends and the Productivity Paradox AACSB:

20. For organizations, the critical issue is not how IT increases productivity in the economy as a whole, but how it improves their own productivity.

Ans: True Difficulty: Medium Section Ref: 17.1 Technology and Economic Trends and the Productivity Paradox AACSB: Reflective thinking

21. Investments in IT infrastructure, such as data centers and networks, are evaluated differently than investments in IT applications because infrastructures exist for a shorter time than applications.

Ans: False Difficulty: Medium Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB:

22. The value of information can be expressed as net benefits with information minus net benefits without that information.

Ans: True Difficulty: Medium Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB: Critical thinking

23. Organizations often use net present value (NPV) calculations for cost-benefit analyses of capital investments.

Ans: True Difficulty: Medium Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB:

24. After Y2K and the dot-com problems of 2000–2002, enterprises rarely justified investments in IT projects with a solid business case.

Ans: False

Difficulty: Medium Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB:

25. IT projects generate tangible benefits such as faster time to market, employee and customer satisfaction, easier distribution, and greater organizational agility that are difficult to calculate.

Ans: False Difficulty: Medium Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB: Use of Information Technology

26. An analyst could ignore intangible benefits, but doing so implies that their value is zero and may lead the organization to reject IT investments that could substantially increase revenues and profitability.

Ans: True Difficulty: Medium Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB: Use of Information Technology

27. Total cost of ownership (TCO) is a formula for calculating the cost of owning, operating, and controlling an IT system throughout its life cycle.

Ans: True Difficulty: Medium Section Ref: 17.3 Advanced Methods for Justifying IT Investment and Using IT Metrics AACSB: Use of Information Technology

28. IT outsourcing is widespread because it provides significant advantages at almost no risk.

Ans: False Difficulty: Medium Section Ref: 17.5 Economic Aspects of IT and Web-Based Systems AACSB:

29. Measuring and monitoring e-procurement activities is crucial to identifying both problematic and successful areas. It provides insight into what an organization is doing right and wrong so that it can pinpoint which activities it needs to investigate and adjust.

Ans: True Difficulty: Medium Section Ref: 17.4 Examples of IT Project Justification AACSB:

30. Because of the complexity and associated risks of developing computer systems, some IT managers refuse to develop systems in-house if it will take longer than one year, has a budget over one million dollars, and will require more than ten people. This is called the “one, one, ten rule.”

Ans: True Difficulty: Medium Section Ref: 17.6 Managerial Issues AACSB:

31. If an enterprise wants to measure its performance with ‘customer satisfaction,’ two appropriate sample metrics are ‘ease of ordering’ and ‘ability to find items.’

Ans: True Difficulty: Medium Section Ref: 17.4 Examples of IT Project Justification AACSB: Use of Information Technology

32. An economic impact of EC is the trade-off between the number of customers a company can reach and the amount of interactions and information services it can provide to them, which is referred to as richness.

Ans: True Difficulty: Medium Section Ref: 17.5 Economic Aspects of IT and Web-Based Systems AACSB: Use of Information Technology

33. Multicriteria methods are appropriate only for justifying nonfinancial impacts that cannot be expressed in monetary terms. Information economics and value analysis are examples of the multicriteria approach.

Ans: False Difficulty: Medium Section Ref: 17.3 Advanced Methods for Justifying IT Investment and Using IT Metrics AACSB: Use of Information Technology

34. Web-based technologies may be approached differently for conducting cost-benefit analysis due to their different economic curves, lack of baseline data, and frequent changes.

Ans: True Difficulty: Hard Section Ref: 17.5 Economic Aspects of IT and Web-Based Systems AACSB: Critical thinking

Short Answer

35. The power of Intel chips is measured in MIPS, which stands for _________ .

Ans: millions of instructions per second Difficulty: Medium Section Ref: 17.1 Technology and Economic Trends and the Productivity Paradox AACSB:

36. The discrepancy between measures of investment in IT and measures of output at the national level has been called the _____________ .

Ans: productivity paradox Difficulty: Medium Section Ref: 17.1 Technology and Economic Trends and the Productivity Paradox AACSB:

37. Economists define productivity as outputs divided by _________ .

Ans: inputs Difficulty: Medium Section Ref: 17.1 Technology and Economic Trends and the Productivity Paradox AACSB:

38. Because approximately ____________ percent of all capital investment in the United States is in IT and it is growing, it is important to properly assess its benefits and costs, Ans: 50 Difficulty: Medium Section Ref: 17.1 Technology and Economic Trends and the Productivity Paradox AACSB: Use of Information Technology

39. Data centers, networks, and data warehouses are components of the IT _______________, which provides the foundations for IT applications in the enterprise.

Ans: infrastructure Difficulty: Medium Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB:

40. IT ____________ are specific systems and programs for achieving certain objectives—for example, providing a payroll or taking a customer order.

Ans: applications Difficulty: Medium Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB:

41. The most common traditional tool for evaluating capital investments is _______________, which measures the effectiveness of management in generating profits with its assets.

Ans: return on investment (ROI) Difficulty: Medium Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB:

42. During the analysis method referred to as ______________, analysts evaluate IT investments by converting the value of future benefits to their present-value equivalents.

Ans: net present value Difficulty: Medium Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB:

43. An IT project with an estimated NPV less than _________ would be excluded from further consideration.

Ans: zero Difficulty: Hard Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB: Use of Information Technology

44. The_________ period is the point in time when an IT projects benefits equal the costs.

Ans: payback Difficulty: Medium Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB:

45. A(n) _________ is a specific, measurable standard against which actual performance is compared.

Ans: metric Difficulty: Medium Section Ref: 17.3 Advanced Methods for Justifying IT Investment and Using IT Metrics AACSB:

46. For many organizations, the most effective strategy for obtaining the economic benefits of IT and controlling its costs may be ____________, which is obtaining IT services from outside vendors Ans: outsourcing Difficulty: Medium

Section Ref: 17.5 Economic Aspects of IT and Web-Based Systems AACSB:

47. To include intangible benefits in traditional financial approaches, it is necessary to ____________ those benefits.

Ans: quantify Difficulty: Medium Section Ref: 17.5 Economic Aspects of IT and Web-Based Systems AACSB:

Essay

48. How do economists measure productivity? What is labor productivity? What is the productivity paradox? What are two possible explanations of the apparent productivity paradox?

Ans: Economists define productivity as outputs divided by inputs. Outputs are calculated by multiplying units produced (for example, number of automobiles) by their average value. The resulting figure needs to be adjusted for price inflation and also for any changes in quality (such as increased safety or better gas mileage). If inputs are measured simply as hours of work, the resulting ratio of outputs to inputs is labor productivity.

The discrepancy between measures of investment in information technology and measures of output at the national level has been called the productivity paradox.

A summary of possible explanations of the apparent productivity paradox is provided in Table 17.1.

Difficulty: Hard Section Ref: 17.1 Technology and Economic Trends and the Productivity Paradox AACSB:

49. Traditional financial methods to evaluate investment decisions are net present value (NPV), internal rate of return (IRR), and payback period. Explain these methods.

Ans: In an NPV analysis, the values of future benefits are converted (discounted) to their present-value equivalent. Then the present value of future benefits is compared to the costs to determine whether the benefits exceed the costs. A project with an estimated NPV greater than zero may be a candidate for acceptance. One with an estimated NPV less than zero would probably be rejected.

If an investment requires and produces a number of cash flows over time, the IRR can be calculated. IRR is the discount rate that makes the NPV of those cash flows equal to zero. Some companies set a minimum acceptable IRR (or hurdle rate) based on their own cost of capital and the minimum percentage return they’d like to see from their investments.

The payback period is the point at which the yearly benefits of a project equal the costs.

Difficulty: Hard Section Ref: 17.2 Evaluating IT Investments: Needs, Benefits, Issues, and Traditional Methods AACSB:

50. Select an IT-going green initiative. Describe how you would build the business case to justify such an investment. List at least 2 metrics for the justification.

Ans: Answers will vary depending on the initiative selected. The business case should identify and incorporate at least 2 metrics.

Difficulty: Medium Section Ref: 17.5 Economic Aspects of IT and Web-Based Systems AACSB: