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1. BUS 365 Week 10 Quiz – Strayer
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Quiz 9 Chapter 12
IT Strategic Planning
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

2. 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
b) SWOT
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

3. 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

4. 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

5. 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

6. 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

7. 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.

8. 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

9. 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

10. 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

11. 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.

12. 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
True/False
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.

13. 43. For more productive service level agreements, companies may hire an outsource
relationship management company 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.

14. 48. According to a survey of business leaders by Diamond Management &
Technology Consultants, 87 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.
51. Ultimately, it is the CIO’s duty to insure that IT and other critical activities are
effectively governed.
52. IT plays a pivotal role in improving corporate governance practices because most
critical business processes are automated; and managers rely on information provided
by these processes for their decision making.

15. 53. A prerequisite for effective IT–business alignment for the CIO to understand the
latest technologies and for the CEO and business planners to understand competitors.
54. The IT planning process results in a formal IT strategy or a re-assessment each
year or each quarter of the existing portfolio of IT resources.
55. The long-range IT plan, sometimes referred to as the strategic IT plan, is based on
the strategic outsourcing plan.
56. In reality, because of the rapid pace of change in IT and the environment, short-
term IT tactical plans may include major items not anticipated in the longer term IT
plans.

16. 57. An advantage of business service management software tools is that they provide
real-time dashboard views for tracking KPIs at the executive, functional, and
operations levels.
58. IT is an enabler of core competencies or competitive strengths; and it is complex,
expensive, and constantly changing.
59. Since the late 1980s, many organizations have outsourced the majority of their IT
functions, rather than just incidental parts to cut costs or manage the complexity of IT.
60. Risks associated with outsourcing are minimal because of service level
agreements.
Short Answer
61. Cloud computing and software as a service (SaaS) have expanded __________
options.

17. 62. __________ is how an organization intends to accomplish its vision. It’s the
overall game plan.
63. IT __________ is concerned with insuring that organizational investments in IT
deliver full value.
64. IT governance, like security, is an __________ and cannot be achieved by a
mandate or set of rules.
65.The CIO must understand and buy into the corporate _________ so that IS
planning does not occur in isolation.
66. __________ refers to the degree to which another resource can be used instead of
the original resource to achieve the same value,
67. Business service management is an approach for linking __________ of IT to
business goals to determine the impact on the business.

18. 68. __________ of software development has become a common practice due to
global markets, lower costs, and increased access to skilled labor.
69. The risk of __________ occurs when a vendor deliberately underperforms while
claiming full payment.
70. The risk of __________ occurs when a client enters into a long-term contract with
a vendor, but the vendor changes financial terms at some point or over-charges for
unanticipated enhancements.
Essay
71. What are the four main points of IT strategic plans?
72. What are three issues driving the need for IT governance?
73. List four types of individuals concerned about IT governance.
74. Identify and briefly describe three important skill sets of CIOs.
75. What are the major reasons why organizations are increasingly outsourcing?