Chapter 5, Information Systems and Business Transformation

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. 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 Determination of employee benefit costs Pay distributed to employees Accuracy/completeness of employee payments Input Task Output 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 motorcycle Sale of a customized motorcycle to a customer Manufacturing the customized motorcycle for the customer Packaging and shipping the customized motorcycle Accounting Sales Manufacturin g Delivery 56. Associate the quality/perception of change to the appropriate change management strategy. Continuous process improvement Greater internal resistance Empowerment of the individuals Challenging old assumptions Incremental change Radical change Incremental change Radical change 57. Match the description below as belonging either to the functional (silo) perspective or the business process perspective. Process perspective Process perspective Functional perspective Functional perspective Functional perspective Recognition that processes are crossfunctional. Managers are able to coordinate work to ensure the optimal creation of value for the organization. Without seeing the big picture, often a business is not as effective. Self-contained business units like accounting, marketing and sales allow an organization to optimize expertise. 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 2nd 3rd 4th 5th Receive requirements for goods Create and send a purchase order to a vendor for the needed goods Receive the goods from the vendor Verify the vendor’s invoice Pay the vendor for the goods 59. Match the business process with the enterprise system that supports this process. ERP ERP CRM CRM SCM SCM PLM Financial management Operations management Customer services and support history Loyalty program management Demand planning and forecasting Service parts planning Innovation management 60. Match the scenario below to the enterprise system is represents. SCM CRM ERP PLM Kimberly Clark, a consumer products company, uses this IS to provide end-to-end visibility of the supply process in real time. Ritz Carlton uses this IS to capture information about guest preferences to enhance the customization of the services it provides its guests. CEMEX uses this IS to standardize its manufacturing, accounting, procurement, finance and HR business processes. Sloan Valve Company uses this IS to reduce the time-tomarket for a new product to less than 12 months (down from 24 months).