Making the Business Case: Multiple Choice Questions

Tutorial 3 Making the Business Case

Multiple Choice Questions
1. A mature, stable industry may need IS to ________ the current pace of operations, while a company in a newer, more volatile industry (i.e., a cellular phone company) may find it more important to __________________ technology. a. reduce, outsource b. maintain, be on the leading edge of c. advance, reduce d. accelerate, maintain

2. Porter’s five forces include: a. competitors, new entrants, customers, suppliers, distributors b. customers, suppliers, distributors, middlemen, stockholders c. stockholders, suppliers, distributors, customers, competitors d. competitors, customers, suppliers, new entrants, substitutes

3. Probably the most important factor that can affect IS investment is the nature of ________________ in the industry. a. competition or rivalry b. technology c. customer service d. marketing

4. When making a successful business case, "Arguments based on data, quantitative analysis, and/or indisputable factors" are known as: a. arguments based on faith. b. arguments based on fear. c. arguments based on fact. d. None of the above.

5. What type of argument is this: "This analysis shows that implementing the inventory control system will reduce errors by 50% and pay for itself within 18 months"? a. An argument based on faith b. An argument based on fear c. An argument based on fact d. None of the above.

6. The most common way to make an argument based on fact, where convincing quantitative analysis proves the benefits outweigh the costs, is: a. to look at industry trends. b. hire independent consultants. c. to demonstrate what competitors are doing. d. a cost-benefit analysis.

7. Costs that are one-time costs that are not expected to continue after the system is implemented are called: a. tangible costs. b. intangible costs. c. recurring costs. d. nonrecurring costs.

8. The cost of employee salaries and benefits is an example of: a. intangible costs. b. recurring costs. c. high-risk costs. d. infrastructure costs.

9. __________ costs are ongoing costs that occur throughout the life cycle of systems development, implementation, and maintenance. a. Intangible costs b. Recurring costs c. High risk costs d. Infrastructure costs

10. ____________ costs are those that are easily identified and that are easy to recognize and track. a. Tangible costs b. Intangible costs c. Recurring costs d. Nonrecurring costs
11. ___________ costs are those that are hard to quantify, that is, they are difficult to evaluate and track. a. Tangible costs b. Intangible costs c. Recurring costs d. Nonrecurring costs

12. Benefits such as reduction in order entry errors, increase in the customer reach of a new Web-based system, etc. are examples of: a. tangible benefits. b. intangible benefits. c. recurring costs. d. nonrecurring costs.

13. Benefits such as improved perception of the firm and faster turnaround on order fulfillment are examples of: a. tangible benefits. b. intangible benefits. c. recurring costs. d. nonrecurring costs.

14. The IS manager: a. is an intangible cost. b. is a nonrecurring cost. c. is not in a position to make recommendations to decision makers. d. has overall responsibility for managing IS development, implementation, and maintenance.

15. One of the best ways to make a business case for a new system is to: a. convert benefits to monetary terms. b. take the CEO out to lunch and talk to him/her privately. c. gain influence or control of the executive committee. d. take your case to corporate stockholders.

16. A good strategy for making a business case is to: a. devise proxy variables. b. assess the value of the IT infrastructure. c. measure what is important to management. d. All of the above.

17. When direct quantification of financial benefits is difficult, an alternative is the use of __________, which are measures of changes in terms of perceived value. a. work profile matrices b. proxy variables c. outside consultants d. steering committees

18. If you use measures of perceived value changes to the organization in the context of making a business case, you can communicate these differences in terms of percentages, increases, or decreases (whatever best conveys the benefits). These changes are demonstrated by using: a. work profile matrices b. proxy variables c. outside consultants d. steering committees

19. Hot issues with senior management include: a. cycle time (time to process an order). b. customer feedback. c. employee morale. d. All of the above.

20. The mindset of managers in the past was to think about information systems as a(n) _____________. Managers must view IS as a(n) __________. a. necessary evil, asset b. competitive advantage, liability c. resource, expense d. expense, overhead

21. The term ______ is generally used to mean the use of the Internet and related technologies that support interactive purchasing. The term _______ is used more broadly to mean the use of nearly any information technologies to support business. a. e-business, e-commerce b. e-commerce, e-business c. e-technology, e-business d. e-commerce, e-technology

22. The four consecutive stages of Choosing, Matching, Executing, and Assessing make up the: a. System Development Life Cycle. b. Functional Area Assessment System. c. Executive Information System. d. E-Business Innovation Cycle.

23. To be successful in e-business it is important to match new technologies with: a. economic opportunities. b. new computers. c. new employees. d. new businesses.

24. New technologies that are anticipated to have an impact on businesses are called: a. vaporware. b. innovative growth. c. emerging technologies. d. firmware.

25. The E-Business Innovation Cycle questions the conventional wisdom that: a. databases can keep pace with rapid technological changes. b. marketing dictates which type of technology should be used. c. economic opportunities exist. d. emerging technologies are useful.

26. Competitive advantage gained by using information systems is usually: a. permanent, because innovation tends to be ongoing. b. a slow process because technology changes slowly. c. long lasting because the E-Business Innovation Cycle is cyclical. d. short-lived because competitors can copy emerging information systems.

27. For an organization to deploy emerging information systems successfully they must have: a. a tolerance for risk. b. a tolerance of uncertainty. c. a tolerance of problems. d. All of the above.

True / False Questions

28. Benefits such as improved perception of the firm and faster turnaround on order fulfillment are examples of intangible benefits.
True False

29. A steering committee is a set of company executives from within the firm. True False

30. One of the best ways to make a business case for a new system is to convert benefits to monetary terms.
True False

31. A company is said to have a monopoly when it has gained an edge over its rivals. True False

32. The term e-commerce is generally used to mean the use of the Internet and related technologies that support interactive purchasing.
True False
33. The four consecutive stages of Choosing, Matching, Executing, and Assessing make up the System Development Life Cycle.
True False

34. New technologies that are anticipated to have an impact on businesses are called firmware.
True False

35. To be successful in e-business it is important to match new technologies with economic opportunities. True False

36. Competitive advantage gained by using information systems is usually short-lived because competitors can copy emerging information systems. True False