Chapter 7 Processes, Organizations, and Information Systems

Using MIS, 7e (Kroenke)
Chapter 7 Processes, Organizations, and Information Systems
7.1 True/False Questions
1) Both structured processes and dynamic processes are formally defined processes.
Answer: FALSE
AACSB: Analytical Thinking
Difficulty: Easy
Course LO: Discuss the role of information systems in supporting business processes
Chapter LO: 1
2) Structured processes are standardized processes that involve day-to-day operations.

Answer: TRUE
Difficulty: Easy
Chapter LO: 1
3) Placing an order is an example of a structured process.

Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
4) Structured processes are adaptive processes that change structure rapidly and readily.
Answer: FALSE
Difficulty: Easy
Chapter LO: 1
5) Dynamic processes are usually more specific than structured ones.

Answer: FALSE
Difficulty: Easy
Chapter LO: 1
6) Using social networking sites to generate buzz about a company's new product line is an
example of a dynamic process.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
1
7) Dynamic processes support operational activities.
Answer: FALSE
Difficulty: Easy
Chapter LO: 1
8) A workgroup process exists to enable workgroups to fulfill the charter, purpose, and goals of a
particular group or department.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
9) Lead generation and lead tracking are processes concerning the sales and marketing
department.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
10) Order and account tracking are business processes concerning the operations department.
Answer: FALSE
Difficulty: Easy
Chapter LO: 1
11) A workgroup information system is an organizational structure where a separate department

is established by the organization to support and manage its information system.
Answer: FALSE
Difficulty: Easy
Chapter LO: 1
12) The procedures for using workgroup information systems need to be understood only by the
IT department of an organization.
Answer: FALSE
Difficulty: Easy
Chapter LO: 1
2
13) Workgroup information systems typically support 10 to 100 users.
Answer: TRUE
AACSB: Information Technology
Difficulty: Easy
Chapter LO: 1
14) Enterprise processes span an organization and support activities in multiple departments.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
15) The solutions to problems in an enterprise system usually involve a single department of the
organization.
Answer: FALSE
Difficulty: Easy
Chapter LO: 1
16) CRM is an example of a structured inter-enterprise information system.

Answer: FALSE
Difficulty: Easy
Chapter LO: 1
17) In inter-enterprise information systems, procedures are simple and generally not documented
or formalized in any way.
Answer: FALSE
Difficulty: Easy
Chapter LO: 1
18) Inter-enterprise information systems support one or more inter-enterprise processes.

Answer: TRUE
Difficulty: Easy
Chapter LO: 1
3
19) Process efficiency is a measure of the ratio of process outputs to inputs.
Answer: TRUE
Difficulty: Easy
Chapter LO: 2
20) The structure of a process has no bearing on its efficiency.

Answer: FALSE
Difficulty: Easy
Chapter LO: 2
21) Adding process resources increases process effectiveness, but it adds costs.
Answer: TRUE
Difficulty: Easy
Chapter LO: 2
22) Changing the structure of a process always involves a change in resources as well, even if it
is only a simple reordering of tasks.
Answer: FALSE
Difficulty: Easy
Chapter LO: 2
23) Information systems improve process quality by augmenting the actions of the human who is
performing that activity.
Answer: TRUE
Difficulty: Easy
Chapter LO: 2
24) An information silo is a condition that exists when data are isolated in separated information
systems.
Answer: TRUE
Difficulty: Easy
Chapter LO: 3
4
25) Workgroups can develop information systems for their own needs, but, over time, they would
result in information silos.
Answer: TRUE
Difficulty: Easy
Chapter LO: 3
26) The problems of duplicated data, disjointed systems, limited information, and inefficiencies
are solved by spreading the data across multiple databases.
Answer: FALSE
Difficulty: Easy
Chapter LO: 3
27) Business process reengineering is the activity of altering existing and designing new business
processes to take advantage of new information systems.
Answer: TRUE
Difficulty: Easy
Chapter LO: 4
28) Business process reengineering is a quick process, but it is exceedingly expensive.

Answer: FALSE
Difficulty: Easy
Chapter LO: 4
29) In the customer acquisition phase of the customer life cycle, an organization categorizes its
customers according to value and attempts to win back high-value customers.
Answer: FALSE
Difficulty: Easy
Course LO: Describe the functions of customer relationship management (CRM) systems
Chapter LO: 4
30) Relationship management processes increase the value of existing customers by selling them
more product.
Answer: TRUE
Difficulty: Easy
Chapter LO: 4
5
31) CRM systems incorporate accounting, manufacturing, inventory, and human resources
applications.
Answer: FALSE
Difficulty: Easy
Course LO: Describe the uses of enterprise systems and enterprise resource planning
Chapter LO: 4
32) The primary purpose of an ERP system is integration.

Answer: TRUE
Difficulty: Easy
Chapter LO: 4
33) Enterprise application integration is a suite of applications, a database, and a set of inherent
processes for consolidating business operations into a single, consistent, computing platform.
Answer: FALSE
Difficulty: Easy
Chapter LO: 4
34) Converting to an ERP system is not nearly as disruptive as converting to an EAI system.
Answer: FALSE
Difficulty: Easy
Chapter LO: 4
35) An ERP solution consists of application programs, databases, and business process
procedures but does not include training and consulting.
Answer: FALSE
Difficulty: Easy
Chapter LO: 5
36) Choosing an ERP solution that has applications that function close to the organization's
requirements is critical to its successful implementation.
Answer: TRUE
Difficulty: Easy
Chapter LO: 5
6
37) An ERP solution includes a database design, initial configuration data, and the company's
operational data.
Answer: FALSE
Difficulty: Easy
Chapter LO: 5
38) A trigger is a computer program stored in a database that is used to enforce business rules.
Answer: FALSE
Difficulty: Easy
Chapter LO: 5
39) Triggers and stored procedures are not components of an ERP solution.
Answer: FALSE
Difficulty: Easy
Chapter LO: 5
40) The inherent processes that are defined in an ERP solution are known, by some ERP vendors,
as process blueprints.
Answer: TRUE
Difficulty: Easy
Chapter LO: 5
41) ERP vendors sometimes train an organization's employees to become in-house trainers in
training sessions called train the trainer.
Answer: TRUE
Difficulty: Easy
Chapter LO: 5
42) Industry-specific solutions contain program and database configuration files but not the
process blueprints that apply to ERP implementations in specific industries.
Answer: FALSE
Difficulty: Easy
Chapter LO: 5
7
43) SAP and Oracle are the highest ranked ERP vendors in the market.
Answer: TRUE
Chapter LO: 5
44) In enterprise systems, a single department manager is solely in charge.

Answer: FALSE
Difficulty: Easy
Chapter LO: 6
45) Gap identification is a major task when implementing enterprise systems.

Answer: TRUE
Difficulty: Easy
Chapter LO: 6
46) Transitioning to a new enterprise system requires careful planning and substantial training.
Answer: TRUE
Difficulty: Easy
Chapter LO: 6
47) Inter-enterprise silos can solve the problems of workgroup information silos but not those of
enterprise silos.
Answer: FALSE
Difficulty: Easy
Chapter LO: 7
48) Operational efficiency can be increased by avoiding the usage of integrated data to analyze
an organization's day-to-day activities.
Answer: FALSE
Difficulty: Easy
Chapter LO: 7
8
49) A supermarket must choose to use distributed systems to analyze buying patterns of their
customers efficiently.
Answer: TRUE
Difficulty: Easy
Chapter LO: 7
7.2 Multiple-Choice Questions
1) ________ are formally defined, standardized processes that involve day-to-day operations.
A) Dynamic processes
B) Unstructured processes
C) Structured processes
D) Kinetic processes
Answer: C
Difficulty: Easy
Chapter LO: 1
2) Which of the following is an example of a structured process?

A) deciding on the location of a new store
B) solving the problem of excessive product returns
C) purchasing raw materials
D) using social media to create buzz about a new product
Answer: C
Chapter LO: 1
3) ________ are flexible, informal, and adaptive processes that normally involve strategic and
less specific managerial decisions and activities.
A) Operational processes
B) Dynamic processes
C) Inherent processes
D) Structured processes
Answer: B
Difficulty: Easy
Chapter LO: 1
9
4) Which of the following is an example of a dynamic process?
A) Samsung accepts a return of a defective television from its dealer.
B) Starbucks places an order for coffee beans from its local supplier.
C) Amazon.com hires customer service representatives to help customers with their online order.
D) Nike uses Facebook and Twitter to generate buzz about its new line of running shoes.
Answer: D
Chapter LO: 1
5) Which of the following is a characteristic of dynamic processes?

A) They are adaptive processes that change structure rapidly and readily.
B) They are usually formally defined and documented.
C) They support operational and managerial decisions and activities.
D) They are standardized processes.
Answer: A
Chapter LO: 1
6) Which of the following workgroup processes is related to sales and marketing?

A) lead tracking
B) order management
C) customer support
D) accounts receivable
Answer: A
Difficulty: Easy
Chapter LO: 1
7) Which of the following workgroup processes is related to operations?

A) account updating and tracking
B) sales forecasting
C) finished goods inventory management
D) treasury and account management
Answer: C
Difficulty: Easy
Chapter LO: 1
10
8) Which of the following workgroup processes is related to manufacturing?
A) order entry and tracking
B) finished goods inventory management
C) product and brand management
D) planning and scheduling
Answer: D
Difficulty: Easy
Chapter LO: 1
9) Which of the following workgroup processes is related to customer service?

A) assessment
B) account tracking
C) sales forecasting
D) accounts payable
Answer: B
Difficulty: Easy
Chapter LO: 1
10) Which of the following workgroup processes is related to human resources?

A) lead tracking
B) customer support
C) assessment
D) order management
Answer: C
Difficulty: Easy
Chapter LO: 1
11) Which of the following information systems minimizes data duplication among departments?
A) departmental information systems
B) workgroup information systems
C) personal information systems
D) enterprise information systems
Answer: D
Difficulty: Easy
Chapter LO: 1
11
12) Which of the following statements is true regarding workgroup information systems?
A) They are easy to change.
B) They minimize data duplication among departments.
C) They can be operated without training.
D) They support 10 to 100 users.
Answer: D
Chapter LO: 1
13) ________ processes span an organization and support activities in multiple departments.
A) Enterprise
B) Inter-enterprise
C) Strategic
D) Reactive
Answer: A
Difficulty: Easy
Chapter LO: 1
14) Which of the following statements about enterprise information systems is true?
A) The procedures are not documented but are understood within the group.
B) They do not require users to have any formal training.
C) They are very difficult to change.
D) They support 10 to 100 users.
Answer: C
Chapter LO: 1
15) The information system that a restaurant uses to order supplies and ingredients from its
suppliers is an example of a(n) ________.
A) enterprise information system
B) personal information system
C) inter-enterprise information system
D) departmental information system
Answer: C
Difficulty: Easy
Chapter LO: 1
12
16) Which of the following statements about a structured inter-enterprise information system is
true?
A) Its problem solutions affect multiple organizations.
B) It is flexible and easily adaptable to organizational changes.
C) It increases data duplication among departments.
D) It does not require users to have any formal training.
Answer: A
Chapter LO: 1
17) ________ is an example of an inter-enterprise information system.

A) CRM
B) PRIDE
C) ERP
D) EAI
Answer: B
Difficulty: Easy
Chapter LO: 1
18) The two dimensions of process quality are ________.

A) efficiency and effectiveness
B) performance and reliability
C) conformance and durability
D) perception and serviceability
Answer: A
Difficulty: Easy
Chapter LO: 2
19) ________ is a measure of the ratio of process outputs to inputs.

A) Process effectiveness
B) Process efficiency
C) Process conformance
D) Process reliability
Answer: B
Difficulty: Easy
Chapter LO: 2
13
20) Process ________ is a measure of how well a process achieves organizational strategy.
A) efficiency
B) conformance
C) effectiveness
D) reliability
Answer: C
Difficulty: Easy
Chapter LO: 2
21) Information systems improve process quality by ________.

A) duplicating data
B) entirely replacing human activity
C) changing the work culture
D) controlling process flow
Answer: D
Difficulty: Easy
Chapter LO: 2
22) Which of the following conditions exist when data are isolated in separated information
systems?
A) information overload
B) encapsulation
C) information silo
D) data segregation
Answer: C
Difficulty: Easy
Chapter LO: 3
23) When an organization has inconsistent duplicated data, it is said to have a problem of
________.
A) information silo
B) data integrity
C) error of omission
D) data segregation
Answer: B
Difficulty: Easy
Chapter LO: 3
14
24) Tony requests for a credit approval of $25,000 and instead gets $15,000 approved as
customer credit. Which of the following problems caused by information silos is most likely the
reason behind it?
A) data duplication
B) isolated decisions
C) limited information
D) disjointed processes
Answer: D
Difficulty: Easy
Chapter LO: 3
25) ________ is the activity of altering existing and designing new business processes to take
advantage of new information systems.
A) Business process modeling
B) Business process reengineering
C) Business process outsourcing
D) Enterprise resource planning
Answer: B
Difficulty: Easy
Chapter LO: 4
26) ________ are predesigned procedures for using software products.

A) Inherent processes
B) Triggers
C) Modules
D) Service descriptions
Answer: A
Difficulty: Easy
Chapter LO: 4
27) ________ is a suite of applications, a database, and a set of inherent processes for managing
all the interactions with the customer, from lead generation to customer service.
A) Business process reengineering
B) Customer relationship management
C) Enterprise resource planning
D) Customer lifecycle management
Answer: B
Difficulty: Easy
Chapter LO: 4
15
28) Which phase of the customer life cycle focuses on sending messages to the target market to
attract customer prospects?
A) relationship management
B) loss/churn
C) marketing
D) customer acquisition
Answer: C
Difficulty: Easy
Chapter LO: 4
29) Which phase of the customer life cycle focuses on increasing the value of existing customers
by selling them more product?
A) marketing
B) customer acquisition
C) relationship management
D) loss/churn
Answer: C
Difficulty: Easy
Chapter LO: 4
30) Which phase of the customer life cycle categorizes customers according to value and attempt
to win back high-value customers?
A) loss/churn
B) customer acquisition
C) relationship management
D) marketing
Answer: A
Difficulty: Easy
Chapter LO: 4
16
31) ________ is a suite of applications called modules, a database, and a set of inherent
processes for consolidating business operations into a single, consistent, computing platform.
A) Enterprise resource planning
B) Customer relationship management
C) Enterprise application integration
D) Business process reengineering
Answer: A
Difficulty: Easy
Chapter LO: 4
32) The primary purpose of an ERP system is ________.

A) customization
B) duplication
C) integration
D) customer acquisition
Answer: C
Difficulty: Easy
Chapter LO: 4
33) Enterprise application integration is a ________.

A) suite of software applications that consolidates existing systems by providing layers of
software that connect applications together
B) strategy that uses business process management to radically enhance the customer service
experience from any customer base
C) suite of applications called modules, a database, and a set of inherent processes for
consolidating business operations into a single, consistent, computing platform
D) suite of applications, a database, and a set of inherent processes for managing all the
interactions with the customer, from lead generation to customer service
Answer: A
Difficulty: Easy
Chapter LO: 4
17
34) Which of the following statements is true of enterprise application integration?
A) It leads to data duplication because each application has its own database.
B) It connects system "islands" via a new layer of software.
C) It leverages existing systems and enhances the capabilities of functional applications.
D) It prevents existing applications from communicating and sharing data.
Answer: B
Chapter LO: 4
35) The major benefit of enterprise application integration is that it ________.

A) minimizes the requirement for formalized procedures
B) acts as a cost effective alternative to ERP, with greater capabilities
C) utilizes a centralized database
D) enables organizations to use existing applications
Answer: D
Chapter LO: 4
36) An ERP solution does not include ________.

A) a database design
B) a company's operational data
C) initial configuration data
D) stored procedures
Answer: B
Difficulty: Easy
Chapter LO: 5
37) A(n) ________ is a computer program stored within a database that runs to keep the database
consistent when certain conditions arise.
A) stored procedure
B) index
C) trigger
D) transaction
Answer: C
Difficulty: Easy
Chapter LO: 5
18
38) A stored procedure is a ________.
A) program stored in a database that keeps the database consistent when certain conditions arise
B) history of actions executed by a database management system
C) computer program stored in a database that is used to enforce business rules
D) data structure that improves the speed of data-retrieval operations in a database
Answer: C
Chapter LO: 5
39) The inherent processes defined in an ERP solution are known, by some ERP vendors, as
________.
A) database transactions
B) stored procedures
C) transaction logs
D) process blueprints
Answer: D
Difficulty: Easy
Chapter LO: 5
40) ERP vendors train an organization's employees, called Super Users, to become in-house ERP
trainers in training sessions called ________.
A) train the trainer
B) top-down training
C) on-the-job training
D) employ the employer
Answer: A
Difficulty: Easy
Chapter LO: 5
41) ERP training falls into two broad categories, one of which is training on how to use the ERP
application software. Which of the following activities is a part of this category?
A) obtaining top-level management support
B) steps for using the applications to accomplish the activities in processes
C) dealing with employee resistance to the new system
D) preparations for organizational changes
Answer: B
Chapter LO: 5
19
42) To reduce the substantial work that needs to be done to customize an ERP application to a
particular customer, ERP vendors provide ________.
A) service descriptions
B) industry-specific solutions
C) inherent processes
D) DIY modules
Answer: B
Difficulty: Easy
Chapter LO: 5
43) The two top-ranked ERP vendors are ________.

A) Epicor and Oracle
B) SAP and Oracle
C) Microsoft Dynamics and Infor
D) Microsoft Dynamics and SAP
Answer: B
Difficulty: Easy
Chapter LO: 5
44) AX, Nav, GP, and Solomon are the four major ERP products of ________.
A) Oracle
B) SAP
C) Microsoft Dynamics
D) Epicor
Answer: C
Difficulty: Easy
Chapter LO: 5
45) Which of the following ERP products did Infor acquire?

A) Solomon
B) GP
C) Epicore 9
D) Baan
Answer: D
Difficulty: Easy
Chapter LO: 5
20
46) Which ERP vendor acquired PeopleSoft and Siebel?
A) Oracle
B) Infor
C) Epicor
D) SAP
Answer: A
Difficulty: Easy
Chapter LO: 5
47) When implementing new enterprise systems, usually the only solution for resolving process
issues and providing enterprise process management is to ________.
A) develop committees and steering groups
B) reinforce employees' sense of self-efficacy
C) establish clear and absolute contractual guidelines
D) communicate the need for change to the employees
Answer: A
Chapter LO: 6
48) Since the features and functions of complex products like CRM or ERP are not easy to
identify, ________ is a major task when implementing enterprise systems.
A) virtualization
B) encapsulation
C) gap identification
D) data duplication
Answer: C
Difficulty: Easy
Chapter LO: 6
49) Which of the following is an effective and acceptable technique to overcome employee
resistance while implementing new enterprise systems?
A) giving employees ultimatums and deadlines
B) paying employees straight-out for transitioning to the new system
C) coercing employees to learn the new system
D) conducting contests with cash prizes
Answer: D
Chapter LO: 6
21
50) ________ refers to a person's belief that he or she can be successful at his or her job.
A) Self-appraisal
B) Self-actualization
C) Self-efficacy
D) Self-elevation
Answer: C
Difficulty: Easy
Chapter LO: 6
51) Joseph wishes to increase the operational efficiency of his new startup. What should Joseph
do?
A) Joseph should use integrated data stored in his firm's central database to analyze its day-to-
day activities.
B) Joseph should avoid analyzing his firm's distribution systems as they do not play a role in its
daily activities.
C) If Joseph plans to support formally defined and documented activities in his firm, he should
use a dynamic planning system over a structured planning system.
D) If Joseph plans to include less specific and fluid activities in his firm, he should use a
structured planning system over a dynamic planning system.
Answer: A
Difficulty: Easy
Chapter LO: 7
52) Carla, a restaurateur who is new to the field, meets a veteran chef and restaurateur, Giovanni.
Carla wishes to analyze the purchasing pattern of her customer base. Which of the following is
most likely to be a piece of sound advice that Giovanni would offer Carla?
A) Carla should use her restaurant's distributed systems to know more about her customers'
buying patterns.
B) Carla should avoid using the restaurant's integrated system to analyze her customers'
purchasing patterns.
C) Carla should support strategic and less structured managerial decisions to ensure that
standardization occurs.
D) Carla should support less specific and fluid managerial decisions to ensure that
standardization occurs.
Answer: A
Chapter LO: 7
22
7.3 Essay Questions
1) Define structured processes and list their characteristics.

Answer: Structured processes are formally defined, standardized processes that involve day-to-
day operations: accepting a return, placing an order, purchasing raw materials, and so forth.
The characteristics of structured processes are:
- Support operational and structured managerial decisions and activities
- Standardized
- Usually formally defined and documented
- Exceptions rare and not (well) tolerated
- Process structure changes slowly and with organizational agony
AACSB: Information Technology; Written and oral communication
Chapter LO: 1
2) Define dynamic processes and list their characteristics.

Answer: Dynamic processes are flexible, informal, and adaptive processes that normally involve
strategic and less unstructured managerial decisions and activities. Deciding whether to open a
new store location or how best to solve the problem of excessive product returns are examples,
as is using Twitter to generate buzz about next season's product line.
The characteristics of dynamic processes are:
- Support strategic and less structured managerial decisions and activities
- Less specific, fluid
- Usually informal
- Exceptions frequent and expected
- Adaptive processes that change structure rapidly and readily
Chapter LO: 1
3) Define workgroup processes, enterprise processes, and inter-enterprise processes.

Answer: A workgroup process is a structured process that exists to enable workgroups to fulfill
the charter, purpose, and goals of a particular organizational unit. Enterprise processes are
structured processes that span an organization and support activities in multiple departments.
Inter-enterprise processes are structured processes that span two or more independent
organizations.
Difficulty: Easy
Chapter LO: 1
23
4) Define enterprise information systems and describe its characteristics.
Answer: Enterprise information systems are information systems that span an organization and
support activities in multiple departments. They typically have hundreds to thousands of users.
Procedures are formalized and extensively documented; users undergo formal procedure training.
The solutions to problems in an enterprise system usually involve more than one department.
Because enterprise systems span many departments and involve potentially thousands of users,
they are very difficult to change. Changes must be carefully planned, cautiously implemented,
and users given considerable training. Sometimes users are given incentives and other
inducements to motivate them to change.
Chapter LO: 1
5) Describe inter-enterprise information systems.

Answer: Structured inter-enterprise information systems are information systems that support
inter-enterprise processes. Such systems typically involve thousands of users, and solutions to
problems require cooperation among different, usually independently owned, organizations.
Problems are resolved by meeting, by contract, and sometimes by litigation. Data are often
duplicated between organizations, but such duplication is either eliminated or is carefully
managed. Because of their wide span, complexity, and use by multiple companies, such systems
can be exceedingly difficult to change. Supply chain management is a classic example of an
inter-enterprise information system.
Chapter LO: 1
6) What are the two dimensions of process quality? How can organizations improve process
quality? How do information systems improve process quality?
Answer: The two dimensions of process quality are efficiency and effectiveness. Process
efficiency is a measure of the ratio of process outputs to inputs. Process effectiveness is a
measure of how well a process achieves organizational strategy.
Organizations can improve the quality (efficiency and/or effectiveness) of a process in one of
three ways:
- Change the process structure
- Change the process resources
- Change both
Information systems can be used to improve process quality by:
- Performing an activity
- Augmenting a human who is performing an activity
- Controlling data quality and process flow
Chapter LO: 2
24
7) List the problems associated with information silos.
Answer: The problems associated with information silos include:
- Data duplication and data inconsistency
- Disjointed processes
- Limited information and lack of integrated information
- Isolated decisions that lead to organizational inefficiencies
- Increased expense
Chapter LO: 3
8) What is the fundamental problem of information silos? How can this problem be remedied?
Answer: The fundamental problem of information silos is that data are duplicated in isolated
systems. The most obvious fix is to integrate the data into a single database and revise
applications (and business processes) to use that database. Another remedy is to allow the
isolation, but to manage it to avoid problems.
Chapter LO: 3
9) What are the four phases of the customer life cycle? Briefly describe each phase.
Answer: The four phases of the customer life cycle include: marketing, customer acquisition,
relationship management, and loss/churn. Marketing sends messages to the target market to
attract customer prospects. When prospects order, they become customers who need to be
supported. Additionally, relationship management processes increase the value of existing
customers by selling them more product. Inevitably, over time the organization loses customers.
When this occurs, win-back processes categorize customers according to value and attempt to
win back high-value customers.
Chapter LO: 4
10) Define ERP. What is the primary purpose of an ERP system?

Answer: Enterprise resource planning (ERP) is a suite of applications called modules, a
database, and a set of inherent processes for consolidating business operations into a single,
consistent, computing platform. An ERP system is an information system based on ERP
technology. The primary purpose of an ERP system is integration; an ERP system allows the left
hand of the organization to know what the right hand is doing. This integration allows real-time
updates globally, whenever and wherever a transaction takes place. Critical business decisions
can then be made on a timely basis using the latest data.
Difficulty: Easy
Chapter LO: 4
25
11) List the functions of enterprise application integration (EAI).
Answer: The functions of EAI are as follows:
- It connects system "islands" via a new layer of software/system.
- It enables existing applications to communicate and share data.
- It provides integrated information.
- It leverages existing systems–leaving functional applications as is, but providing an integration
layer over the top.
- It enables a gradual move to ERP.
Chapter LO: 4
12) Explain the nature of the database component of an ERP solution.

Answer: An ERP solution includes a database design as well as initial configuration data. It does
not, of course, contain the company's operational data. During development, the team must enter
the initial values for that data as part of the development effort. SAP, the leading vendor of ERP
solutions, provides ERP databases that contain over 15,000 tables. The design includes the
metadata for those tables, as well as their relationships to each other, and rules and constraints
about how the data in some tables must relate to data in other tables. The ERP solution also
contains tables filled with initial configuration data.
Large organizational databases contain two types of program code. The first, called a trigger, is a
computer program stored within the database that runs to keep the database consistent when
certain conditions arise. The second, called a stored procedure, is a computer program stored in
the database that is used to enforce business rules. An example of such a rule would be never to
sell certain items at a discount. Triggers and stored procedures are also part of the ERP solution.
Developers and business users need to configure the operation of such code during the ERP
implementation as well.
Chapter LO: 5
13) Describe the two categories of ERP training.

Answer: ERP vendors have developed training curricula and numerous classes because of the
complexity and difficulty of implementing and using ERP solutions. ERP training falls into two
broad categories. The first category is training about how to implement the ERP solution. This
training includes topics such as obtaining top-level management support, preparing the
organization for change, and dealing with the inevitable resistance that develops when people are
asked to perform work in new ways. The second category is training on how to use the ERP
application software.
Chapter LO: 5
26
14) What are the four challenges of implementing new enterprise systems?
Answer: The four primary challenges or factors affecting implementation of enterprise systems
are:
- Collaborative management
- Requirements gaps
- Transition problems
- Employee resistance
Difficulty: Easy
Chapter LO: 6
15) How should organizations manage employee resistance to change, in the context of new
enterprise systems?
Answer: First, senior-level management needs to communicate the need for the change to the
organization and reiterate this, as necessary, throughout the transition process. Second,
employees fear change because it threatens self-efficacy, which is a person's belief that he or she
can be successful at his or her job. To enhance confidence, employees need to be trained and
coached on the successful use of the new system. Word-of-mouth is a very powerful factor, and
in some cases key users are trained ahead of time to create positive buzz about the new system.
Video demonstrations of employees successfully using the new system are also effective. Third,
in many ways, the primary benefits of a new ERP system are felt by the accounting and finance
departments and the senior management. Many of the employees who are asked to change their
activities to implement ERP will not receive any direct benefit from it. Therefore, employees
may need to be given extra inducement to change to the new system. Implementing new
enterprise systems can solve many problems and bring great efficiency and cost savings to an
organization, but it is not for the faint of heart.
Chapter LO: 6
27

Chapter 7 Processes, Organizations, and Information Systems

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Chapter 7 Processes, Organizations, and Information Systems

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What are structured and dynamic processes?

What are structured and dynamic processes?

What are the different types of information systems?

What are the different types of information systems?

Using MIS, 7e (Kroenke)

Chapter 7 Processes, Organizations, and Information Systems

7.1 True/False Questions

2) Structured processes are standardized processes that involve day-to-day operations.

3) Placing an order is an example of a structured process.

5) Dynamic processes are usually more specific than structured ones.

11) A workgroup information system is an organizational structure where a separate department

16) CRM is an example of a structured inter-enterprise information system.

18) Inter-enterprise information systems support one or more inter-enterprise processes.

20) The structure of a process has no bearing on its efficiency.

28) Business process reengineering is a quick process, but it is exceedingly expensive.

32) The primary purpose of an ERP system is integration.

44) In enterprise systems, a single department manager is solely in charge.

45) Gap identification is a major task when implementing enterprise systems.

7.2 Multiple-Choice Questions

2) Which of the following is an example of a structured process?

5) Which of the following is a characteristic of dynamic processes?

6) Which of the following workgroup processes is related to sales and marketing?

7) Which of the following workgroup processes is related to operations?

9) Which of the following workgroup processes is related to customer service?

10) Which of the following workgroup processes is related to human resources?

17) ________ is an example of an inter-enterprise information system.

18) The two dimensions of process quality are ________.

19) ________ is a measure of the ratio of process outputs to inputs.

21) Information systems improve process quality by ________.

26) ________ are predesigned procedures for using software products.

32) The primary purpose of an ERP system is ________.

33) Enterprise application integration is a ________.

35) The major benefit of enterprise application integration is that it ________.

36) An ERP solution does not include ________.

43) The two top-ranked ERP vendors are ________.

45) Which of the following ERP products did Infor acquire?

1) Define structured processes and list their characteristics.

2) Define dynamic processes and list their characteristics.

3) Define workgroup processes, enterprise processes, and inter-enterprise processes.

5) Describe inter-enterprise information systems.

10) Define ERP. What is the primary purpose of an ERP system?

12) Explain the nature of the database component of an ERP solution.

13) Describe the two categories of ERP training.

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