File: 6e chapter5TestBank.

docx, Chapter 5, Information Systems and Business

Transformation

Multiple Choice

1. Which one of the following enterprise systems is social IT increasingly integrating

with?
a) ERP
b) SCM
c) PLM
d) CRM
e) SAP

Ans: d (easy)
Response: See page 114

2. This is an approach that links a company with providers of the raw components it
needs to make a product or service, manufacture that product or service, and delivers it to
customers.
a) Customer Relationship Management (CRM)
b) Supply Chain Management (SCM)
c) Product Lifecycle Management (PLM)
d) Enterprise Resource Planning (ERP)
e) Value Chain Management (VCM)

Ans: b (Easy)
Response: See page 114

3. Businesses today link their customers and suppliers through a single network that
optimizes cost and opportunities for all. This is possible because of all of the following
reasons EXCEPT:
a) Standardized communication networks (like the Internet)
b) The availability of SCM enterprise systems
c) The inability to coordinate workflow across organizational boundaries
d) The globalization of business
e) The ubiquity of IT

Ans: c (Medium)
Response: See pages 114-115

4. Enterprise systems are useful for organizations seeking to do all of the following
EXCEPT:
a) Encourage duplication of data
b) Centralize decision making
c) Make effective use of organizational databases
d) Unify operations
e) Standardize processes

Ans: a (Medium)
Response: See page 116

5. Organizations use the enterprise system to drive the redesign of a business process
(rather than the process driving the system implementation) for all of the following
reasons EXCEPT:
a) The organization is just starting out and has no defined processes.
b) The business process itself is not seen as a competitive strategic advantage.
c) There is little time or resources to deviate from best practices.
d) The organization has highly specialized processes that are not seen as best
practices.
e) The needs of the business are met by the enterprise system.

Ans: d (Hard)
Response: See page 118-119

6. In this business structure the firm is a hierarchy organized around a set of functions.
Each group has a core competency that it concentrates upon.
a) Technology
b) Business reengineering approach
c) Functional
d) Process Control
e) Business process

Ans: c (Medium)
Response: See page 101

7. This type of process reengineering uses a radical improvement method for change.
a) Business Process Reengineering
b) System Development Engineering
c) Six Sigma
d) System Quality Management
e) Total Quality Management

Ans: a (Medium)
Response: See page 105

8. If an organization was going to make substantial changes to its customer service

department, it would use this type of transformation tool.
a) Business Process Reengineering (BPR)
b) Reengineering Process Control (RPC)
c) Engineering Control System (ECS)
d) Total Process Improvement (TPI)
e) System Process Control (SPC)

Ans: a (Medium)
Response: See page 106

9. These are comprehensive software packages that incorporate all modules needed to run
the internal operations of a business. They should include the following modules:
Manufacturing, Accounting, Human Resources and Sales.
a) SCM systems
b) Groupware system
c) ERP systems
d) CRM systems
e) PLM systems

Ans: c (Medium)
Response: See page 110

10. All of the following are characteristics of an ERP system EXCEPT:

a) ERP systems provide seamless integration of information flow across the
organization.
b) ERP systems provide best (or at least “very good”) practices for generic business
processes.
c) ERP systems have evolved to support newer IT architectures.
d) ERP systems work “out of the box” with little configuration requirements.
e) ERP systems are usually software packages obtained from a provider/vendor

Ans: d (Medium)
Response: See page 112

11. Middleware is software used to:

a) connect processes running on different computer systems across a network.
b) integrate a computer’s operating system and its applications.
c) connect a computer system to the network.
d) support agile process redesign.
e) provide best business practices to ERP systems.

Ans: a (Medium)
Response: See page 112

12. Enterprise Rent-A-Car was able to model and better understand how service requests
were handled and then optimize the process, greatly benefiting the customer experience.
Enterprise achieved this benefit using which tool?
a) Business Process Management (BPM)
b) Radical redesign
c) New Product Development (NPD)
d) Six sigma
e) Product life cycle management

Ans: a (Medium)
Response: See page 108

13. All of the follow are negative outcomes found in a firm that is set up using a
functional model, EXCEPT for:
a) suboptimization
b) communication gaps
c) lose site of the business goals
d) lost information
e) redundancy of expertise

Ans: e (Medium)
Response: See pages 101-102

14. A company that wants to make incremental improvements to existing business

processes would utilize which of the following?
a) Total quality management
b) Workflow management
c) Business process management
d) Business process reengineering
e) Enterprise resource planning
Ans: a (Medium)
Response: See pages 105-106

15. Which one of the following is NOT a quality associated with agile and dynamic
business processes?
a) Designed to support incremental improvement of processes
b) Relies on a high degree of IT
c) Allows for companies to take advantage of the latest innovations
d) Change requires significant redesign effort
e) Readily supports changing business requirements

Ans: d (Hard)
Response: See pages 106-107

16. When would an organization elect to use BPR over TQM?

a) When they want to make small, incremental changes
b) When they need to attain aggressive improvement goals
c) When they have time to refine their improvement goals
d) When there is not a need to make significant immediate changes
e) When they want the employees to have control over the changes

Ans: b (Medium)
Response: See page 106

17. Computer systems in the 1960s and early 1970s were typically designed around a
specific departmental need and did not interface very well. These systems were designed
to support:
a) The functional perspective.
b) The entire enterprise.
c) The silo perspective.
d) Incremental change.
e) Social IT and mobile needs.

Ans; c (Medium)
Response: See page 110

18. The Six Sigma process received its name from:

a) The intersection of six bell curves, where there are no errors
b) Six degrees of freedom in removing an error, called “sigma“
c) Six tries to change or give up
d) Six standard deviations, or less than 3.4 deects per million
e) Sigma, the computer company that invented it

Ans: d (Hard)
Response: See page 106

19. _________________________is an all-encompassing tool used for modeling,

building, executing and monitoring business processes that go across organizational
boundaries (and often systems).
a) Enterprise system
b) Workflow diagrams
c) SharePoint
d) Business Process Management systems
e) Integrated information systems
Ans: d (Medium) Response: See pages 107-108

20. All of the following are good metrics a firm can use to measure the success of a
business process EXCEPT for:
a) A customer’s satisfaction with the quality of the product received
b) The time elapsed from when the customer placed an order to the time the product
is received
c) The change in demographics of a region.
d) The number of orders the customer places in a given timeframe.
e) Revenue received from a service

Ans: c (Hard)
Response: See page 102

21. ERP systems are expensive for all of the following reasons EXCEPT:
a) The software is costly to purchase.
b) There is an enormous amount of work required to implement.
c) There are a number of hidden costs such as project management, training and
support.
d) They require organizational changes and impact the way people work.
e) They do not require business process redesign.

Ans: e (Medium)
Response: See page 112

22. Apple Inc. has developed iTunes, a unique propriety software system that supports
Apple’s need to delivery digital content to its customers. Apple chooses to develop
iTunes rather than use an existing enterprise system solution, most likely because:
a) The critical process of content delivery is Apple’s strategic advantage.
b) The ability to integrate with existing enterprise systems does not exist.
c) It was too costly for Apple to purchase an enterprise system.
d) The existing solutions were developed by a fierce competitor
e) Apple was not satisfied with the look and feel of existing enterprise systems.

Ans: a (Hard)
Response: See page 102

23. An effective workflow diagram should do all of the following EXCEPT:

a) Map the sequence and details of a business process
b) Identify all persons/roles who play a part in the process
c) Use active verbs to describe activities
d) Identify inputs and outputs of a process
e) Try to mask the steps of a business process

Ans: e (Medium)
Response: See page 107

24. Sloan Valve Company redesigned their new product development process and as a
result greatly reduced time-to-market as well as improved quality. Which one of the
following enterprise systems supported Sloan’s transformation?
a) ERP
b) SCM
c) PLM
d) TQM
e) NPD
Ans: c (Hard)
Response: See page 110

25. The major difference between an ERP and ERP II system is this feature.
a) Advances in software usability and flexibility
b) Information is made immediately available to external stakeholders using social
and collaborative tools
c) Information is made available to all departments in the company
d) Advanced quering and reporting capabilities
e) Close integration with e-business technologies

Ans: b (Hard)
Response: See page 111

26. ERP systems have all of the following characteristics except:

a) They are expensive
b) They are implemented in all, or nearly all, large organizations
c) They are difficult to implement
d) Organizations use them to reduce redundancy and make better decisions
e) They are expensive but are easy to use.

Ans: e (Medium)
Response: See page 111

27. Reengineering is all of the following except:

a) Gradual and systematic
b) Threatening to employees
c) Associated with very high reward if it succeeds
d) Associated with quick rewards if it succeeds
e) Sometimes suspected to be used to justify downsizing

Ans: a (Medium)
Response: See pages 105-106

28. ERP has all the following advantages except:

a) Modules throughout a corporation can communicate with each other
b) While purchasing is difficult, the vendors such as SAP make it worthwhile due to
easy implementation
c) Have predefined software that represents "pretty good practices" or even "best
practices"
d) Enables standardized procedures in an organization
e) Reduces inconsistent data stored in various locations of the organization

Ans: b (Medium)
Response: See page 111

29. The system should drive the transformation in a company when:

a) The firm has competitive advantage because of its processes
b) Advantageous processes exist in the organization
c) When a firm has been around for a long time
d) When the systems are in a crisis
e) When employees have quite a lot of knowledge about transformation in the firm.

Ans: d (Medium)
Response: See page 118

True/False
30. The Process Perspective is also called the Silo perspective

Ans: False
Response: See page 100

31. At the heart of how a business operates, you will find a collection of core business
processes.

Ans: True
Response: See page 99

32. The speed and magnitude at which organizations must make changes today continues
to decrease as a result of technology.

Ans: False
Response: See page 100.

33. Early computer systems were designed to support the silo perspective rather than a
cross-functional business process approach.

Ans: True
Response: See page 110.

34. Enterprise systems are large information systems that provide the core functionality
needed to run a business and share data across all divisions of the business.

Ans: True
Response: See page 110

35. ERP systems are credited with establishing new business models, rather than simply
making a firm improve its practices.

Ans: False
Response: See page 112

36. Sloane Valve’s successful effort to redesign its new product development (NPD)
process can be classified as radical redesign.

Ans: True
Response: See page 105

37. Business processes are functional in nature and rarely cut across different departments
in an organization.

Ans: False (Medium)

Response: See page 102

38. The functional perspective keeps the “big picture” in view.

Ans: False (Medium)
Response: See page 102

39. Personnel often react more favorable to incremental change rather than radical change
because incremental change gives them control and ownership of improvements.

Ans: True (Medium)

Response: See page 106

Short Answer

40. List one of the largest enterprise systems vendors as identified in this chapter.

Ans: SAP or Oracle (may also allow for Salesforce.com)

Response: See page 110.

41. What does SCM stand for?

Ans: Supply Chain Management
Response: See page 110.

42. The reason some supply chains are succumbing to the “neighborhood effect” in which
factories are built closer to suppliers and consumers is to reduce _______ costs.

Ans: transportation
Response: See page 115

43. The enterprise system used to manage all information regarding customer interactions
is called_____.

Ans: CRM (customer relationship management)

Response: See page 113

44. This is a set of information system tools used to enable information flow within and
between processes across an organization.

Ans: Enterprise systems

Response: See pages 110-112

45. This type of organizational structure (perspective) results in duplication of

information, lack of coordination between departments, and lack of communication on a
company wide basis.

Ans: Silo or Functional

Response: See page 101
46. This is the tool that is used to help map a sequence of tasks that support a business
process.

Ans : Workflow diagram

Response: See page 107

47. IS can impede change, particularly when the _________ don’t match the capabilities
of the IS.

Ans: Business processes

Response: See page 100

48. A business uses __________to measure the critical success dimensions of a business
process.

Ans: Metrics
Response: See page 102

Essay

49. Describe a business process by identifying the input to the process, some tasks
associated with the process, the output of the process and a metric that could measure its
effectiveness.

50. Outline how Zara demonstrates a strong sense of process perspective in comparison
to other more traditional retailers who seem to have a silo perspective.

51. Identify the benefits a company can receive after successfully implementing a CRM
system.

52. Explain why installing an enterprise system often requires the redesign of existing
business processes and the impact this has on the organization.

53. Explain issues companies have with one another when linking systems in order to
participate in an integrated supply chain.

Matching

54. Identify the specific components of the payroll business process.

Hours worked by employees for the pay period Input

Determination of employee benefit costs Task
Pay distributed to employees Output
Accuracy/completeness of employee payments Metric

55. Match the task of the order fulfillment process to the department that would most
likely be responsible for completing the task.

Receipt of payment from the customer for the Accounting

motorcycle
Sale of a customized motorcycle to a customer Sales
Manufacturing the customized motorcycle for the Manufacturing
customer
Packaging and shipping the customized motorcycle Delivery

56. Associate the quality/perception of change to the appropriate change management

strategy.

Continuous process improvement Incremental change

Greater internal resistance Radical change
Empowerment of the individuals Incremental change
Challenging old assumptions Radical change

57. Match the description below as belonging either to the functional (silo) perspective or
the business process perspective.

Process perspective Recognition that processes are cross-

functional.
Process perspective Managers are able to coordinate work to
ensure the optimal creation of value for the
organization.
Functional perspective Without seeing the big picture, often a
business is not as effective.
Functional perspective Self-contained business units like
accounting, marketing and sales allow an
organization to optimize expertise.
Functional perspective Communication gaps between departments
are often wide and handoffs between
departments are often a source of problems.

58. Order the tasks below as they would appear in a simple, linear workflow diagram for
the procurement process.

1st Receive requirements for goods

2nd Create and send a purchase order to a vendor for the
needed goods
3rd Receive the goods from the vendor
4th Verify the vendor’s invoice
5th Pay the vendor for the goods

59. Match the business process with the enterprise system that supports this process.

ERP Financial management

ERP Operations management
CRM Customer services and support history
CRM Loyalty program management
SCM Demand planning and forecasting
SCM Service parts planning
PLM Innovation management

60. Match the scenario below to the enterprise system is represents.

SCM Kimberly Clark, a consumer products company, uses this IS to

provide end-to-end visibility of the supply process in real time.
CRM Ritz Carlton uses this IS to capture information about guest
preferences to enhance the customization of the services it
provides its guests.
ERP CEMEX uses this IS to standardize its manufacturing,
accounting, procurement, finance and HR business processes.
PLM Sloan Valve Company uses this IS to reduce the time-to-market
for a new product to less than 12 months (down from 24
months).