Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

MIS 531 > Chapter 8 Questions > Flashcards

Chapter 8 Questions Flashcards

1
Q

Building a business case for an IT investment:

Allows management to establish priorities for investing in different projects.

Helps gain commitment for the IT investment from business managers.

Creates a basis for monitoring the investment.

Identifies the benefits of the investment.

All of the above.

A

All of the above.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

This method of IT funding is the most equitable, as the costs associated with IT are based on use. However, it can be difficult and tedious to calculate the usage costs.

Allocation

Corporate budgeting

Usage

Distributed

Chargeback

A

Chargeback

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Which of the following should a manager expect from the IS organization?

Promoting enterprise security.

Participating in setting and implementing strategic direction.

Innovating current processes.

Managing data, information and knowledge.

All of the above.

A

All of the above.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Corporate budgeting is a wise choice for funding newer technologies and innovation.

True
False

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Labor costs associated with an IT infrastructure far outweigh the actual capital investment cost.

True
False

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Sam has just purchased 10 new high speed color laser printers for his company. He is very excited because he got a 40% discount and paid only $2,990 for each unit. His boss, Joe, wants to know things such as operating costs, support, overhead, etc. for the printers. Joe wants to know this value:

RCO

TCO

ROI

NPV

EVM

A

TCO

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Valuing an IT investment is difficult because of many reasons. One of the reasons is:

Many IT investments are necessities and payback is hard to calculate.

Increased customer satisfaction is not valued enough to justify costs.

IT investments often add no real business value.

IT managers do not see the need to value an investment whose payback period is relatively short.

IT is seen as “a necessary evil”

A

Many IT investments are necessities and payback is hard to calculate.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

This financial calculation provides a percentage rate that measures the relationship between the amount the business gets back from an investment and the amount invested.

IRR

ROI

Payback

NPV

EVA

A

ROI

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

A CIO must spend part of the day performing _____ tasks and the some part of the day working on operational tasks. Rarely can a CIO focus on just one task in any given day.

Administrative

Strategic

Database

Financial

Technology

A

Strategic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Critical to the business case is the identification of both _________ and ________.

costs, risks

costs, benefits

advantages, disadvantages

assumptions, risks

benefits, detriments

A

costs, benefits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Denise works for a company where the IT department charges her department for actual usage of a SharePoint server, determining how often users log in and how much storage space her department consumes. What type of IT funding model is the company deploying?

Allocation method

Corporate budget method

Usage method

Distributed method

Chargeback method

A

Chargeback method

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

TCO, discussed by Gartner, stands for Technology Chief Officer

True
False

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

There are three main ways to handle funding for IT, including chargeback to users, allocation of costs to users, and providing IT services from a corporate budget.

True
False

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

All of the following are qualities of a dashboard EXCEPT:

Highly summarized

Key metric driven

Raw data

Effective Visualization

Alerts

A

Raw data

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Financial measures are the sole means for making management decisions.

True
False

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

A local marketing firm is considering launching a new and extensive social media marketing campaign. This investment of resources is being looked at through the length of the project since it is anticipated to last at least 5 years. What financial calculation should be used to compute the investment’s value, taking into account the time value of money?

ROI

NPV

EVA

IRR

TCO

A

NPV

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

In the early days of IT, the CIO would report to the ____ as IT was seen as a way to control costs. As technology has become more strategic and able to deliver a competitive advantage, CIOs now report directly to the ____.

CFO; CEO

CEO; CFO

CFO; COO

COO; CEO

CEO; CTO

A

CFO; CEO

18
Q

According to the research by Peter Weill, a firm that boosts investments in infrastructure is typical of those firms with a focus on (1) _______ and a firm that boosts investments in transaction systems is typical of those firms with a focus on (2) ______

(1) transactions (2) connections
(1) savings (2) expansion
(1) cost (2) ability
(1) agility (2) cost
(1) ability (2) agility

A

(1) agility (2) cost

19
Q

The business side of IT is very different from the business itself.

True
False

A

False

20
Q

Joe works for a company where the IT department charges him for the number of CRM login accounts that are in his department. What type of IT funding model is his company deploying?

Allocation

Corporate budgeting

Usage

TCO

Chargeback

A

Allocation

21
Q

The balanced scorecard:

Is a tool used to communicate the organizational metrics using a traffic light approach (red/yellow/green).

Is a method used to evaluate the health of an organization by looking at all value drivers such as the customers, the workforce, the financials and business processes.

Focuses its attention on an organization’s financials.

Is used to communicate the TCO for an IT investment.

Is one of many metrics used to evaluate the value of an IT investment.

A

Is a method used to evaluate the health of an organization by looking at all value drivers such as the customers, the workforce, the financials and business processes.

22
Q

The allocation method is the most equitable funding method used by many IT organizations.

True
False

A

False

23
Q

Mary is recommending IT investments in the neighborhood of $250 million for her company. However, the board is hesitant since it’s such as capital-intensive project. If the project fails the company could go out of business. What financial calculation should they use?

ROI

NPV

EVA

IRR

FV

A

EVA

24
Q

Traditional valuation methods such as ROI, NPV, and IRR cannot be applied to information technology because it is technical, not business-oriented.

True
False

A

False

25
Q

Which dimension of the balanced scorecard answers the question “How do we look to shareholders?”

Customer perspective
Innovating and learning perspective
Internal business perspective
Financial perspective
Supplier perspective
A

Financial perspective

26
Q

A company that seeks an IT portfolio that lowers costs as the primary business objective will be more likely to increase spending on _____ because these applications can help automate processes.

strategic systems
infrastructure
informational systems
transactional systems
social media
A

transactional systems

27
Q

All of the following are methods used to value an IT investment EXCEPT:

Payback anaylsis
ROI
NPV
CTO
IRR
A

CTO

28
Q

Four asset classes of IT investments include:

Financial Systems
Marketing systems
Control systems
All the above
None of the above
A

None of the above

29
Q

An IT dashboard provides:

Summary information gathered over a period of time.

Statistics on system usage.

A distraction from where more IT attention should be focused.

Current and critical measurements for the organization in an easy to read manner.

A snapshot of a firm’s financial data at any given point in time.

A

Current and critical measurements for the organization in an easy to read manner.

30
Q

The scope of responsibilities for an IT organization seems to expand with increased IT maturity.

True
False

A

True

31
Q

Scorecards provide a summary of information gathered over a period of time. Another common IT monitoring tool is the _______.

baseline
metrics
portfolio
dashboard
monitor
A

dashboard

32
Q

Often the customer of an IT organization is not an external customer but rather an internal customer/

True
False

A

True

33
Q

The responsibility of the IT organization is to:

Manage core business functions like selling, accounting, and manufacturing.

Partner with business managers to ensure the right IS exists to support the business strategy.

Set the business strategy.

Have sole responsibility for building information systems for the organization.

Design business processes.

A

Partner with business managers to ensure the right IS exists to support the business strategy.

34
Q

To justify an IT investment and receive necessary support and approval, a manager must often create a(n) ________________.

IT portfolio

community plan

business case

workflow diagram

business technology plan

A

business case

35
Q

WalMart, the world’s largest retailer, uses RFID tags to track movement of goods across its intense supply chain. One identifiable benefit is that pallets of goods no longer need to be manually logged by a worker when received. Instead, an information system automatically logs the goods as they arrive. This benefit is identified as which type of business change:

Innovation

Efficiency

Cessation

Work force reduction

Doing new things

A

Cessation

36
Q

IT leaders must be part of the business strategy discussion.

True
False

A

True

37
Q

This is a plan designed to counter a manmade or natural disaster that could cripple an enterprise.

Business Continuity Plan

Disaster Recovery Plan

Business Disaster Plan

Disaster Business Case

Business-IT Maturity Model

A

Business Continuity Plan

38
Q

While a relatively simple method for funding, corporate budgeting ­­______________

helps control the costs of IT.

may result in an IT organization that is less end-user oriented.

encourages sharing of funding resources between IT and business units.

levies charges on specific users or business units.

gives business managers sole control over IT decisions.

A

may result in an IT organization that is less end-user oriented.

39
Q

Activity based costing _____________

groups costs into meaningful buckets that are then distributed based on the activity or product they support.

is useful for allocating small project work.

charges all costs to “cost centers”.

considers only initial capital investments.

calculates ongoing maintenance costs.

A

groups costs into meaningful buckets that are then distributed based on the activity or product they support.

40
Q

IT leaders must be part of the business strategy discussion.

True
False

A

True

MIS 531 (15 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions