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 organizations strategy, then large investments in ISs may
have a low payoff.
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.
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.
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.
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.
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

7. Southwest Airlines relies on IT to be a low-cost airline. Southwests 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.
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
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
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
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
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

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.
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
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
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.
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.
18. _________ is contracting work to be completed by an outside vendor.
a) Temping
b) Offshoring
c) Outsourcing
d) Sourcing
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

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.
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
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
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
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
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.

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
27. Despite the importance of IT alignment, organizations continue to demonstrate limited actual
alignment.
Ans: True
28. The main challenge to achieving IT-business alignment is for the CIO to secure the necessary
budget and other resources.
Ans: False
29. Resources must be valuable, rare, and generate net increases in revenues in order to be able
to create competitive advantages.
Ans: True
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
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
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
33. American Airlines reservation system, SABRE and Caterpillars 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
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

35. Critical success factors are those ten to twenty key factors that, if done well, will result in the
organizations success.
Ans: False
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
37. One important reason to do scenario planning is to ensure that companies focus on
catastrophes and not only opportunities.
Ans: False
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
39. Resource allocation is a harmonious process in most organizations during which high-payoff
projects are identified and budgeted.
Ans: False
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 companys IT services.
Ans: False
41. Some experts believe that all software will eventually become a service and be sold as a
utility.
Ans: True
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
43. _________ is the facility with which another firm can copy the resource.
Ans: Imitability

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
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
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)
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 firms needs.
Ans: corporate steering
48. _________ are the things that must go right in order to help ensure the organizations
survival or success.
Ans: Critical success factors
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
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
51. __________ is contracting work to be completed by an outside vendor.
Ans: Outsourcing
52. ____________ is outsourcing with a vendor located in a country other than the one in which
the client company is based.
Ans: Offshore outsourcing
53. _________ is computing that is as available, reliable, and secure as electricity, water
services, and telephony.
Ans: Utility computing
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

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 companys 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.
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.
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 departmentend-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.

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
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
3. Apples 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
4. Categories of technology adopters include each of the following except:
a) innovators
b) laggards
c) movers
d) late majority
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
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
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
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
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.
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.
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
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
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
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
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%
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
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
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

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
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.
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
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.
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.

24. What is the sequence of stages of Lewins three-stage change model?

a) negotiating, unfreezing, changing
b) acceptance, transition, change
c) unfreezing, change, (re)freezing
d) bargaining, compromising, agreeing
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.
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
27. Approximately 50 percent of the general population is slow to adopt new technology.
Ans: True
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
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
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
31. Gartners 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
32. IT infrastructures consist of the systems and programs for achieving specific objectives, such
as payroll processing or order fulfillment.
Ans: False

33. An appropriate implementation approach for mission critical information systems is the
plunge approach.
Ans: False
34. Top management support is as important in IT implementation as it is in IT adoption.
Ans: True
35. The major factors determining the risk of IT projects are project size, organization size, and
complexity of the implementation effort.
Ans: False
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
37. The activities of business process management consist of designing, analyzing,
implementing, managing, and optimizing a process for both effectiveness and efficiency.
Ans: True
38. Companies will not achieve significant productivity improvements from business process
management (BPM) if bottlenecks within the processes are not corrected.
Ans: True
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
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
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
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

43. _________ is the degree to which the new system is perceived as being better than the
system it replaces.
Ans: Relative advantage
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
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
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
47. The __________ is a simple diagramming technique that assesses a technologys potential
impact against the number of years it will take before it reaches mainstream adoption.
Ans: priority matrix
48. _________ refers to all organizational activities involved in the introduction, management
and acceptance of technology to support one or more organizational processes.
Ans: Implementation
49. Using the _________ implementation approach, both new and old systems operate
simultaneously for a designated period of time until a final cutover.
Ans: parallel
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
51. The activities of _________ consist of designing, analyzing, implementing, managing, and
optimizing a process to improve effectiveness or efficiency.
Ans: business process management
52. ____________ is the radical redesign of an organizations business.
Ans: Business process reengineering
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

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
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.
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.
57. Identify and explain two of the ten principles of change management .
Ans:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Address the human side of change systematically Develop a formal

approach for managing change and adapt it often as circumstances change within the
organization.
Start at the top Top managers must show full support for the change to
challenge and motivate the rest of the organization.
Involve every layer Cultivate leaders at various levels to support the change
so that the change cascades down.
Make the formal case A formal written statement of the envisioned change
helps create and solidify alignment between change leaders and the change team.
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.
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.
Assess the Cultural Landscape As change cascades down through
organizational levels, the culture and behaviors of employees must be addressed up front.
Address Culture Explicitly Once understood, the culture must be addressed
head on.
Prepare for the Unexpected No matter how well a plan is executed, there are
always surprises along the way.
Speak to the Individual Employees must be involved in the change process
and individual rewards must be offered to reinforce the organizations commitment to the change
process.
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.
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.
3. Offshore outsourcing is an example of the trend toward ___________, which is blurring
geographic barriers.
a) globalization
b) digitalization
c) robotics
d) mass integration
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
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
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.

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
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
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)
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

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
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.
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
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.
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
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.
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
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
19. Information technologys 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
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.
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
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.
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
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.
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
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
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
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
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
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

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
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
33. Processing confidential data offshore creates valid concerns about identity theft and privacy
issues.
Ans: True
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
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
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
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
38. Sustainability regulations such as the European Unions 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
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
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

41. Spam and other forms of electronic noise contribute to the problem of information overload.
Ans: True
Short Answer
42. __________ will increasingly substitute for human workers at home, in the workplace, in the
military, and for security.
Ans: Robots
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
44. Telecommuting by health care professionals is having a promising impact in health care. This
type of telecommuting is called _____________.
Ans: telemedicine
45. Despite the potential benefits of telemedicine/health, issues related to _________ may
constrain its growth.
Ans: information security
46. ITs 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
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

48. Many people feel a loss of identity, called__________, because of computerization that
reduces or eliminates the human element.
Ans: dehumanization
49. _________ is the science of adapting machines and work environments to people.
Ans: Ergonomics
50. __________ is the process of hiring another company to handle business activities.
Ans: Business process outsourcing

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
52. __________ is the application of Web 2.0 technologies in the enterprise.
Ans: Enterprise Web 2.0
53. There is a difficult tradeoff between privacy and ___________.
Ans: security
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
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
56. Identify two impacts of the IT revolution on structure, authority, power, or job content.
Ans: See Table 15.2
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
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.

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.
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).
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.
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
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
7. Which tests the quality of the users experience when interacting with the portal or Web site?
a) acceptance testing
b) integration testing
c) unit testing
d) usability testing
8. Buying a standard commercial software package to acquire an IT application is called the
__________ approach.

a) package
b) lease
c) turnkey
d) justification
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.
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.
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
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.
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
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.
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
16. Before a company decides how to acquire an IT application, it is necessary to understand the
enterprises current __________ in the area the application is going to be used.
a) business processes
b) budget
c) milestones
d) systems development life cycle
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
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
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.
True/False
20. IT architecture is a plan for organizing the underlying infrastructure and applications of the
IT project.
Ans: True
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

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
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
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
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
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
27. After a company has implemented an IT acquisition project and decided to acquire software,
it is necessary to understand the organizations current way of doing business in the area the
application is going to be used.
Ans: False
28. Standard features required by IT applications can be found in many commercial packages.
This option is known as the vendor approach.
Ans: False
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
30. Major ASPs for enterprise IT systems are Oracle, Microsoft, and IBM.
Ans: True
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
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
33. One of the major factors driving the switch to SaaS is that it reduces the risks involved in
acquiring new software.
Ans: True
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
Short Answer
35. After modules have been installed, _________ testing is needed to test the quality of the
users experience when interacting with the recently acquired IT portal or Web site.
Ans: usability
36. After modules have been installed, _________ testing is needed to determine whether the
application meets the original business objectives and vision.
Ans: acceptance
37. Standard features required by IT applications can be found in many commercial packages.
This option is also known as the _________ approach.
Ans: turnkey
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
39. Software can be rented on a subscription basis. This is referred to as ________.
Ans: software-as-a-service (SaaS)
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 organizations strategy
and vision.
Ans: insourcing
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

42. _________ development is the development and use of information systems by people
outside the formal IS area.
Ans: End-user
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
44. A(n) __________ is a collection of activities that convert inputs into outputs.
Ans: business process
45. _____________ is a methodology in which an organization fundamentally and radically
changes its business processes to achieve dramatic improvement.
Ans: Business process reengineering (BPR)
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)
47. Business processes that are managed via Web Services and SOA adapt faster to changing
customer needs than home-grown or ________ applications.
Ans: purchased
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.
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.