Product Description


Multiple Choice

1. Making IT investments on the basis of an immediate need or threat are sometimes necessary. What can managers expect from making investments in this way?

a) These are proactive approaches that will maximize ROI.

b) These just-in-time approaches to investments minimize long-term costs.

c) These are reactive approaches that can result in incompatible, redundant, or failed systems.

d) These quick responses provide the best defenses.

2. The alignment of IT with the business strategy is dynamic and a(n) __________.

a) ongoing process

b) annual event

c) challenge for operations managers

d) decreasing in importance

3. Cloud computing and software-as-a-service (SaaS) are forms of __________.

a) in-house development

b) offshoring

c) outsourcing

d) sourcing

4. Why did British-Swedish company AstraZeneca undergo a major restructure from a traditional model to a loosely-coupled business model?

a) Management forecasted a significant loss in its sales revenues.

b) Management wanted to implement the latest IT and social networks.

c) Competition in the pharmaceutical industry was decreasing.

d) All of the above

5. Optimally, the __________ guides investment decisions and decisions on how ISs will be developed, acquired, and/or implemented.

a) network infrastructure


c) level of IT expertise

d) IT strategy

6. Typically, ITs that provide competitive advantages, or that contain proprietary or confidential data are developed and maintained by __________.

a) consulting companies

b) the in-house IT function

c) a single vendor

d) multiple vendors

7. According to a survey of business leaders by Diamond Management & Technology Consultants, 87 percent believe that IT is critical to their companies’ strategic success. In addition, the survey reported that __________.

a) most business leaders work with IT to achieve success

b) most IT staff are very involved in the process of developing business strategy

c) only about one-third of business executives responsible for strategy work closely with the IT department

d) IT projects are rarely abandoned

8. Which is not one of the reasons why an IT project is discontinued or abandoned?

a) The project was under-budget

b) The business strategy changed

c) Technology changed

d) The project sponsors did not work well together

9. An organization’s __________ define(s) why it exists.

a) strategy

b) objectives

c) targets

d) mission statement

10. __________ are the desired levels of performance.

a) Strategy

b) Objectives

c) Targets

d) Visions

11. An organization’s __________ are action-oriented statements (e.g., achieve a ROI of at least 10 percent in 2014) that define the continuous improvement activities that must be done to be successful.

a) strategies

b) objectives

c) targets

d) mission statements

12. IT governance is concerned with insuring that organizational investments in IT __________.

a) support operations

b) provide sustainable competitive advantage

c) deliver full value

d) are audited quarterly

13. It is the duty of the __________ to insure that information systems, technology, and other critical activities are effectively governed.

a) IT function

b) Board of Directors (BOD)

c) end users

d) HR function

14. IT governance covers each of the following areas except:

a) inventory management

b) resource management

c) risk management

d) strategy support

15. Characteristics of resources that can help firms create a competitive advantage are all of the following except:

a) appropriability

b) governance

c) rarity

d) value

16. Why is it insufficient to develop a long-term IT strategy and not reexamine the strategy on a regular basis?

a) Systems need to be maintained

b) To keep the CIO part of the executive team

c) Organizational goals change over time

d) To automate business processes

17. The __________ 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) corporate steering committee

b) board of directors

c) executive suite

d) audit team

18. Based on case studies, the types of work that are not readily offshored include the following:

a) Work that has been routinized

b) Business activities that rely on an common combination of specific application-domain knowledge

c) Situations that would expose the client company to too much data security or privacy risks

d) All of the above

19. For best results, an organization’s strategic IT plan is based on __________.

a) IT governance

b) cloud computing

c) the latest mobile technologies

d) the strategic business plan

20. All of the following are tools or methodologies that managers use for IT strategic planning except:

a) business service management

b) business systems planning model

c) balanced scorecard

d) dashboards

21. Business service management is an approach for linking __________ or metrics of IT to business goals to determine the impact on the business.

a) key performance indicators (KPIs)

b) critical success factors (CSFs)

c) scorecards

d) financials

22. What do managers use KPIs for?

a) To measure real-time performance

b) To predict future results

c) To measure results of past activity

d) All of the above

23. __________  are the most essential things that must go right, or be closely tracked, to ensure the organization’s survival and success.

a) Key performance indicators (KPIs)

b) Critical success factors (CSFs)

c) Scorecards

d) Financials

24. Which is not one of the characteristics of critical success factors (CSFs)?

a) Organizations in the same industry have the same CSFs.

b) The CSF approach was developed to help identify the information needs of managers.

c) The fundamental assumption is that in every organization there are three to six key factors that, if done well, will result in the organization’s success.

d) The failure of these factors will result in some degree of failure at the organization.

25. __________ is used in planning situations that involve much uncertainty, like that of IT in general and e-commerce in particular.

a) Key performance indicators (KPIs)

b) Scenario planning

c) Critical success factors (CSFs)

d) Balanced scorecard

26. Resource allocation is a contentious process in most organizations because opportunities and requests for spending far exceed the available funds. This can lead to __________ among organizational units, which makes it __________ to objectively identify the best investments.

a) highly political competition; difficult

b) highly political competition; easier

c) cooperation; simple

d) cooperation; difficult

27. The __________ of organizations are the things they do best and that represent their competitive strengths.

a) competitive advantages

b) customer-facing activities

c) core competencies

d) back office functions

28. IT is difficult to manage for organizations __________. .

a) of all types

b) in retail

c) in manufacturing

d) in finance

29. Outsourcing can be done __________.

a) domestically or offshore

b) via cloud computing or SaaS

c) via business processing

d) a and b

30. Cloud computing is for outsourcing of __________.

a) routine tasks

b) routine tasks and the delivery of real business services

c) proprietary systems

d) nonproprietary applications

31. __________ is the process of hiring another company to handle business activities for you.

a) Cloud computing

b) Business processing outsourcing (BPO)

c) SaaS

d) IT outsourcing

32. __________ includes many functions that are considered non-core to the primary business strategy, such as financial and administration processes, human resource functions, call center and customer service activities, and accounting.

a) Cloud computing

b) Business processing outsourcing (BPO)

c) SaaS

d) IT outsourcing

33. Outsourcing deals are typically __________.

a) multi-year contracts

b) short-term service level agreements

c) temporary arrangements

d) one-year projects

34. Lessons that eBay and Genpact learned from the BPO implementation include each of the following except:

a) Manage change by securing the commitment of senior leaders

b) Set realistic expectations and manage them actively

c) Focus on minimizing costs

d) Anticipate risks and formulate a plan for mitigating them

35. Which is not one of the lessons that eBay learned from its BPO implementation?

a) Challenges can be avoided by partnering with a global leader in business process and technology management.

b) Build a project-management infrastructure

c) Create a governance mechanism

d) Properly define how success will be measured

36. Since the late 1980s, many organizations have outsourced __________.

a) supply chain functions

b) the majority of their IT functions

c) only incidental parts of their IT function

d) marketing functions

37. The trend in outsourcing has been toward the __________.

a) single vendor

b) use of short term contracts

c) mega-deal

d) multi-vendor approach

38. The major reasons why organizations are increasingly outsourcing include each of the following except:

a) to focus on core competency

b) it’s a faster way to gain or enhance IT capabilities

c) to support supply chain transactions

d) cloud computing and SaaS have proven to be effective IT strategies

39. Which of the following statements about outsourcing is false?

a) Increasingly, organizations are leveraging existing global cloud infrastructures from companies such as Amazon and Google.

b) Established companies are less willing to outsource company-critical functions in an effort to reduce costs.

c) New start-up companies typically outsource and rely on SaaS to avoid upfront IT costs.

d) Outsourcing companies have started to offer interesting new business models and services around cloud computing.

40. Which is not one of the risks associated with outsourcing?

a) flexibility

b) shirking

c) poaching

d) opportunistic repricing


41. Making IT investments on the basis of an immediate need or threat is not a smart strategy because it can result in incompatible, redundant, or failed systems.

42. The two basic types of IT strategies are offshoring often with help from a consulting firm and/or vendor; and outsourcing to a third-party that resides either in the same country or is offshore.

43. For more productive service level agreements, companies may hire an outsource relationship managementcompany to monitor and manage the outsourcing relationships.

44. To reduce costs, biopharmaceutical AstraZeneca shifted from a vertically integrated company to a loosely-coupled organizational model connected by outsourced arrangements and relationships.

45. AstraZeneca was able to quickly set up outsourcing relationships despite complex regulatory hurdles.

46. AstraZeneca had signed a seven-year global outsourcing agreement with IBM. Under the deal, IBM provides a single global technical infrastructure for AstraZeneca covering 60 countries.

47. IT strategic plans should be made within the context of the business strategy that it needs to support, which is how most IT planning is done.

48. According to a survey of business leaders by Diamond Management & Technology Consultants87 percent believe that IT is critical to their companies’ strategic success, but few business leaders work with IT to achieve that success.

49. Both IT and organizational strategies are static and can be harmed when people resist change because IS success depends on the skills and cooperation of people.

50. Business strategy sets the overall direction for the business; while the IT strategy defines what information, ISs, and architecture are needed to support the business and how infrastructure and services are to be delivered.

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