IST 202 Chapter 9 Practice Questions

Which of the following statements best describes the productivity paradox for technology investment?

A) The productivity of any technology is directly proportional to the investment in that technology.
B) While it is easy to quantify the costs associated with developing an information system, it is often difficult to quantify tangible productivity gains from its use.
C) As investment in technology increases, productivity decreases steadily.
D) While it is easy to identify and quantify the intangible benefits of an information system, it is not easy to quantify the tangible benefits.
E) The productivity of an information system is in no way related to the investment in the technology.

B) While it is easy to quantify the costs associated with developing an information system, it is often difficult to quantify tangible productivity gains from its use.

2) System efficiency is the extent to which a system ________.
A) allows firms to reach their operational targets
B) allows people to plan tasks that are achievable
C) enables people to accomplish goals or tasks well
D) enables people to do things faster or at lower cost
E) allows employees to reduce the risks associated with tasks

D) enables people to do things faster or at lower cost

3) Which of the following is true of system effectiveness?
A) It is the extent to which a system enables the firm to accomplish goals well.
B) It is the extent to which a system allows a firm to plan its tasks.
C) It is the extent to which a system enables the firm to do things faster, at lower cost.
D) It is the extent to which a system allows a firm to cut operational costs.
E) It is the extent to which a system enables people to accomplish tasks with relatively little time and effort.

A) It is the extent to which a system enables the firm to accomplish goals well.

4) Which of the following scenarios demonstrates system efficiency?
A) Barker’s new information system allowed the company to reach its monthly targets.
B) Barker’s was able to easily reach its sales goals through the use of its information system.
C) Barker’s new information system allowed the company to set achievable targets.
D) Barker’s new information system helped employees to achieve their individual goals alongside the company’s goals.
E) The new information system at Barker’s helped employees work faster, with less effort.

E) The new information system at Barker’s helped employees work faster, with less effort.

5) BelAir Tech replaced its outdated information system with a newer version. As a result, its employees reported a significant increase in work speed. Which of the following is most similar to BelAir’s situation?
A) Barker’s new information system allowed the company to reach its monthly sales target easily.
B) Twining Co. targeted a 5 percent increase in customer acquisition and achieved this with the new information system.
C) Employees at Niven Ltd. felt that customer satisfaction increased after the new information system was implemented.
D) Castle’s new information system helped employees to achieve their individual goals alongside the company’s goals.
E) At Sterling Inc. the average number of application forms processed in an hour rose from 4 to 6 as a result of the new system.

E) At Sterling Inc. the average number of application forms processed in an hour rose from 4 to 6 as a result of the new system.

6) B&Z Inc. implemented a new information system two months ago but there have been no concrete increases in productivity as a result of the system. A similar system has been in place at the company headquarters for the past two years, and this system has resulted in significant, quantifiable benefits. Which of the following reasons is the most likely explanation for the lack of results?
A) The benefits of the new information system are difficult to pinpoint because the firm is considering the wrong indicators.
B) The new system is being used to redistribute market share rather than make the whole market bigger.
C) It can take years from the first implementation of this new system before the magnitude of benefits is felt by the organization.
D) The benefits of the new information system are difficult to pinpoint because the firm is not familiar with the working of the system.
E) The new system may be beneficial for individual firms but not for a particular industry or the economy as a whole.

C) It can take years from the first implementation of this new system before the magnitude of benefits is felt by the organization.

7) Business case arguments based on ________ focus on beliefs about organizational strategy, competitive advantage, industry forces, customer perceptions, market share, and so on.
A) faith
B) fear
C) facts
D) fiction
E) fallacy

A) faith

8) Business case arguments based on fear are dependent on ________.
A) the belief that implementing the new information system can have significant positive consequences for the firm
B) beliefs about organizational strategy, competitive advantage, industry forces, customer perceptions, market share, and so on
C) data, quantitative analysis, and/or indisputable factors
D) the notion that if the system is not implemented, the firm will lose out to the competition or go out of business
E) the results of a qualitative analysis of employee responses to the new information system

D) the notion that if the system is not implemented, the firm will lose out to the competition or go out of business

9) Business case arguments based on data, quantitative analysis, and/or indisputable factors are known as arguments based on ________.
A) fads
B) faith
C) facts
D) fear
E) fiction

C) Facts

10) Which of the following is an example of a business case argument based on fear?
A) If we do not implement this system, our competitors could gain a significant advantage over us.
B) This system has the potential to reduce required effort by 40 percent.
C) Using this system will help our employees serve customers more efficiently.
D) The system can help us meet both individual as well as organizational goals.
E) The new system is user-friendly and can be implemented almost immediately.

A) If we do not implement this system, our competitors could gain a significant advantage over us.

11) The total cost of ownership of a system refers to ________.
A) all non-recurring costs associated with a system
B) all costs associated with ongoing use and maintenance of a system
C) the total cost of acquisition of a particular system
D) the total cost of acquisition and all costs associated with use and maintenance of a system
E) the recurring costs associated with a system

D) the total cost of acquisition and all costs associated with use and maintenance of a system

12) Which of the following is an example of a recurring cost associated with an information system?
A) installation charges
B) purchase of office space
C) employee salaries
D) technology purchases
E) cost of system acquisition

C) employee salaries

13) Which of the following is an example of an intangible cost for a system?
A) cost of losing customers
B) employee salaries
C) cost of installation and maintenance
D) cost of employee recruitment and retention
E) customer support costs

A) cost of losing customers

14) BelAir Tech is conducting a cost-benefit analysis for its IS department. In this, the salary of an employee is an example of a(n) ________.
A) intangible and tangible cost
B) tangible and recurring cost
C) intangible and recurring cost
D) tangible and non-recurring cost
E) recurring and non-recurring cost

B) tangible and recurring cost

15) Which of the following is true for tangible costs?
A) They are only recurring costs.
B) They are always non-recurring costs.
C) They are relatively easy to quantify.
D) They are the same as intangible benefits.
E) They are difficult to qualify.

C) They are relatively easy to quantify.

16) BelAir Tech implements a new information system and sees a 5 percent increase in monthly sales after implementation. This is a(n) ________ of the system.
A) intangible benefit
B) tangible cost
C) tangible benefit
D) recurring cost
E) non-recurring cost

C) tangible benefit

17) "Increased customer reach of the new Web-based system will result in at least a modest increase in sales." This statement represents a(n) ________ for the company.
A) recurring cost
B) intangible cost
C) tangible benefit
D) non-recurring cost
E) intangible benefit

C) tangible benefit

18) Which of the following is an example of an intangible benefit for a firm?
A) lower transport and operational costs
B) a significant increase in sales
C) a reduction in operational errors
D) cost reductions as compared to previous data
E) improved customer perceptions of the firm

E) improved customer perceptions of the firm

19) A break-even analysis ________.
A) identifies at what point tangible benefits equal tangible costs
B) analyzes the relevant cash flow streams associated with the system at the organization’s discount rate
C) refers to the discounted sum, or present value, of a stream of costs associated with a project or proposal
D) attempts to summarize the overall value of money for a project or proposal
E) is the rate of return used by an organization to compute the present value of future cash flows

A) identifies at what point tangible benefits equal tangible costs

20) A method for deciding among different IS investments or when considering alternative designs for a given system is ________.
A) transactional analysis
B) weighted multicriteria analysis
C) finite element analysis
D) independent component analysis
E) link quality analysis

B) weighted multicriteria analysis

21) ________ are alternative measures of outcomes that can help clarify what the impact of a change will be on a firm.
A) Proxy variables
B) Pseudocodes
C) Patches
D) Prototypes
E) Protocols

A) Proxy variables

22) Which of the following is the main advantage of customizable software over off-the-shelf software?
A) cost effectiveness
B) ease of procurement
C) problem specificity
D) lower risks
E) user-friendliness

C) problem specificity

23) The first phase of the systems development life cycle is ________.
A) systems design
B) systems implementation
C) systems analysis
D) systems planning and selection
E) systems operation

D) systems planning and selection

24) After systems analysis, the next phase in the systems development life cycle is ________.
A) systems implementation
B) systems operation
C) systems planning
D) systems maintenance
E) systems design

E) systems design

25) During the first phase of the systems development life cycle, organizations ________.
A) transform the system design into a working information system
B) identify, plan, and select a development project from all possible projects that could be performed
C) gain a thorough understanding of an organization’s current way of doing things in the area for which the new information system will be constructed
D) elaborate on the details of the chosen approach and design the system
E) decommission the current way of doing things and install the new system in the organization

B) identify, plan, and select a development project from all possible projects that could be performed

26) Requirements collection takes place during the ________ phase of the systems development life cycle.
A) systems design
B) systems implementation
C) systems analysis
D) systems maintenance
E) systems operation

C) systems analysis

27) ________ is the process of gathering and organizing information from users, managers, customers, business processes, and documents to understand how a proposed information system should function.
A) Data modeling
B) Requirements collection
C) Beta testing
D) End-user development
E) External acquisition

B) Requirements collection

28) Which of the following steps takes place in an organization during both in-house systems development as well as external acquisition?
A) vendor selection
B) systems selection
C) systems analysis
D) development of an RFP
E) proposal evaluation

C) systems analysis

29) ________ is a group meeting-based process for requirements collection.
A) Joint application design
B) Computer-aided design
C) Human-computer interface
D) Reverse engineering
E) Total ownership

A) Joint application design

30) ________ represent(s) the movement of data through an organization or within an information system.
A) Data entities
B) Data flux
C) Data attributes
D) Data flows
E) Data modeling

D) Data flows

31) ________ represents the way in which data are transformed.
A) Data parallelism
B) Processing logic
C) Data streaming
D) Process control
E) Transaction processing

B) Processing logic

32) Processing logic is often expressed in ________, which is independent of the actual programming language being used.
A) semantics encoding
B) prefix code
C) source code
D) semiotics
E) pseudocode

E) pseudocode

33) In an information system, a ________ is the point of contact between a system and users.
A) biointerface
B) network interface
C) point-to-point link
D) human-computer interface
E) data link

D) human-computer interface

34) A ________ is a business document containing some predefined data, often including some areas where additional data can be filled in.
A) form
B) script
C) sheet
D) report
E) module

A) form

35) A ________ is a business document containing only predefined data for online viewing or printing.
A) form
B) script
C) sheet
D) report
E) module

D) report

36) The processing and logic operations of an information system refer(s) to ________.
A) the procedures for entering data into a system
B) the transfer of data across system components
C) the procedures that transform raw data inputs into new or modified information
D) the multiple points of contact between a system and users
E) the process of transforming the system design into a working computer system

C) the procedures that transform raw data inputs into new or modified information

37) Software programming and testing takes place during the ________ stage of the systems development process.
A) systems planning
B) systems analysis
C) systems maintenance
D) systems implementation
E) systems design

D) systems implementation

38) Which of the following best describes developmental testing?
A) testing the correctness of individual modules and the integration of multiple modules
B) testing the system to see if it meets design requirements
C) testing of the capabilities of the system in the user environment with actual data
D) testing the system as a whole to see if it performs adequately
E) testing the system in an experimental context using sample data

A) testing the correctness of individual modules and the integration of multiple modules

39) ________ testing is testing of the overall system to see whether it meets design requirements.
A) Developmental
B) Beta
C) Evolutionary
D) Alpha
E) Comparative

D) Alpha

40) Jason has just made some changes to the information system at BelAir Tech and wants to check if the system is working correctly. He wants to conduct a beta test of the system. Which of the following should he do to achieve this?
A) He should ask other programmers to check the modules he changed.
B) He should check to see if the changed components are integrated well into the system.
C) He should ask users of the system to test it using actual data.
D) He should ask the software tester to test if the changed system meets design requirements.
E) He should test the changed modules for correctness.

C) He should ask users of the system to test it using actual data.

41) ________ testing involves testing of the capabilities of the system in the user environment with actual data.
A) Developmental
B) Beta
C) Evolutionary
D) Alpha
E) Comparative

B) Beta

42) Developmental testing of an information system is performed by ________.
A) software testers
B) actual users
C) programmers
D) systems analysts
E) project managers

C) programmers

43) ________ testing is performed by actual users of the system.
A) Developmental
B) Beta
C) Evolutionary
D) Alpha
E) Comparative

B) Beta

44) Which of the following can be considered beta testing?
A) A programmer at Linus Systems checks the integration of multiple modules of an information system.
B) Software testers compare the finished system against user requirements to see if it satisfies all necessary criteria.
C) Taro Inc. checks the correctness of the modules of its new information system.
D) System users at URP feed data into a new information system to test its capability.
E) MNP Inc. checks the system to ensure that it meets all the necessary design requirements.

D) System users at URP feed data into a new information system to test its capability.

45) Programming is the process of ________.
A) transforming the system design into a working computer system
B) testing the correctness of individual modules of a system
C) testing the integration of multiple modules of a system
D) transforming raw data inputs into new or modified information
E) gathering and organizing information from users and managers

A) transforming the system design into a working computer system

46) ________ is the process of decommissioning the current way of doing things and installing the new system in the organization.
A) Reverse engineering
B) System programming
C) Adaptive maintenance
D) Patch management
E) System conversion

E) System conversion

47) Which of the following is true for patch management?
A) It helps in testing the correctness of individual modules and the integration of multiple modules of a system.
B) It helps in the process of transforming the system design into a working computer system.
C) It helps in performing corrective or preventive maintenance for a system.
D) It helps in decommissioning the current system and installing the new system in the organization.
E) It helps to develop system documentation that details the inner workings of the system to ease future maintenance.

C) It helps in performing corrective or preventive maintenance for a system.

48) The final phase of the systems development life cycle is ________.
A) systems design
B) systems implementation
C) systems analysis
D) systems maintenance
E) systems operation

D) systems maintenance

49) ________ use the Internet to check the software vendor’s Web site for available fixes for problems. The application downloads and installs these in order to fix software flaws.
A) Alpha testing systems
B) Proxy variables
C) Benchmarking systems
D) Patch management systems
E) Workarounds

D) Patch management systems

50) The process of making changes to an information system to repair flaws in design, coding, or implementation is known as ________.
A) adaptive maintenance
B) perfective maintenance
C) preventive maintenance
D) corrective maintenance
E) predictive maintenance

D) corrective maintenance

51) The process of making changes to an information system to evolve its functionality, to accommodate changing business needs, or to migrate it to a different operating environment is known as ________.
A) adaptive maintenance
B) perfective maintenance
C) preventive maintenance
D) corrective maintenance
E) predictive maintenance

A) adaptive maintenance

52) Which of the following types of system maintenance involves making enhancements to improve processing performance or interface usability?
A) adaptive maintenance
B) perfective maintenance
C) preventive maintenance
D) corrective maintenance
E) predictive maintenance

B) perfective maintenance

53) Preventive maintenance of a system involves ________.
A) making changes to an information system to repair flaws in the design
B) making enhancements to improve processing performance or interface usability
C) making changes to a system to reduce the chance of future system failure
D) adding desired but not necessarily required system features
E) making changes to an information system to accommodate changing business needs

C) making changes to a system to reduce the chance of future system failure

54) BelAir Tech has a five-member team in charge of the development and maintenance of its information systems. An information system is in place, and the team performs routine maintenance to keep it running smoothly. Which of the following scenarios is an example of perfective maintenance?
A) Jason notices a faulty component in the system and modifies the component.
B) Justin works on the system to make the user interface more user-friendly.
C) Sara knows that the company is migrating to a different operating environment next month, and makes changes to the system.
D) Dylan predicts that the company’s old system may fail under new demands, and takes steps to avert this.
E) Kiera detects a fault in the coding, which is hampering system performance, and rectifies it.

B) Justin works on the system to make the user interface more user-friendly.

55) BelAir Tech has a five-member team in charge of development and maintenance of its information systems. An information system is in place, and the team performs routine maintenance to keep it running smoothly. Which of the following scenarios is an example of adaptive maintenance?
A) Jason notices a faulty component in the system and modifies the component.
B) Justin works on the system to make the user interface more user-friendly.
C) Sara knows that the company is migrating to a new operating environment next month, and makes the appropriate changes to the system.
D) Dylan predicts that the company’s old system may fail under new demands, and takes steps to avert this.
E) Kiera detects a fault in the coding, which is hampering system performance, and rectifies it.

C) Sara knows that the company is migrating to a new operating environment next month, and makes the appropriate changes to the system.

56) Which of the following is true for prototyping?
A) It is a part of the fourth stage of the systems development life cycle.
B) It is synonymous with adaptive maintenance of a system.
C) It does not consider user requirements for the system.
D) It uses a trial-and-error approach for discovering how a system should operate.
E) It is also known as end-user development.

D) It uses a trial-and-error approach for discovering how a system should operate.

changing demands. The company’s five-member IS team is competent and capable of developing a new system, but BelAir decides against developing a system in-house. Which of the following, if true, would most weaken BelAir’s decision?
A) The company’s preferred vendor is willing to provide a basic information system at a reduced rate.
B) The company’s IS team is short-staffed and is finding it difficult to cope with increased work.
C) The costs of outsourcing systems development are greater than those of adapting an off-the-shelf system.
D) The company’s IS department has the qualifications to develop the new system.
E) The company’s requirements for the new system are very specialized.

E) The company’s requirements for the new system are very specialized.

58) BelAir has decided to buy an information system from an external vendor. The company has made a list of its requirements and asked prospective vendors to submit proposals for the system. Which of the following is the next step in the company’s external acquisition process?
A) systems planning
B) systems analysis
C) vendor selection
D) proposal evaluation
E) system installation

D) proposal evaluation

59) Which of the following statements is true of a request for proposal?
A) It is a form sent by vendors to potential customers.
B) It requests vendors to provide a complete list of all their products.
C) It invites customers to bid for a product offered by a vendor.
D) It is a summary of the vendor’s offerings to a client.
E) It is a list of user requirements sent to prospective vendors.

E) It is a list of user requirements sent to prospective vendors.

60) ________ is the use of standardized performance tests to facilitate comparison between systems.
A) Beta testing
B) Systems benchmarking
C) Data modeling
D) Systems prototyping
E) Alpha testing

B) Systems benchmarking

61) BelAir has submitted a request for proposal to a number of vendors. It must now evaluate the proposals it has received. Which of the following methods can it use to compare the different systems?
A) systems benchmarking
B) alpha testing
C) data modeling
D) beta testing
E) prototyping

A) systems benchmarking

62) ________ licenses are activated as soon as the packaging of the software has been removed.
A) Click-wrap
B) Shareware
C) Shrink-wrap
D) Volume
E) Implied

C) Shrink-wrap

63) A(n) ________ license refers to a license primarily used for downloaded software that requires computer users to choose "I accept" before installing the software.
A) click- wrap
B) shareware
C) enterprise
D) volume
E) implied

A) click- wrap

64) An enterprise license is also known as a(n) ________ license.
A) shrink-wrap
B) volume
C) click-wrap
D) shareware
E) implied

B) volume

65) Which of the following is true of Software as a Service?
A) It is not scalable in response to large increases in demand.
B) It involves fixed monthly and yearly costs for the services.
C) It requires the installation of specialized interfaces at the client end.
D) It allows clients to access services on an as-needed basis.
E) It requires an organization to maintain and develop the software.

D) It allows clients to access services on an as-needed basis.

66) BelAir Tech has developed and run its own information system for the past ten years. However, the company has now decided to outsource its IS function to a service provider. Which of the following, if true, will strengthen BelAir’s decision?
A) BelAir’s IS team developed the existing system from scratch and has ironed out most faults over the years.
B) The service provider is highly recommended by its other clients.
C) Most BelAir employees are familiar with the current information system.
D) BelAir has seen a fall in company revenue over the last year.
E) Outsourcing its IS function did not benefit BelAir’s competitor, Amis Systems.

D) BelAir has seen a fall in company revenue over the last year.

67) Which of the following is an example of a basic relationship between an outsourcing vendor and client?
A) STS Systems usually offers BelAir a discount on every purchase it makes.
B) BelAir sets its system preferences according to STS products.
C) BelAir buys a system from the vendor who offers the cheapest prices.
D) STS has a direct stake in the success of BelAir’s performance.
E) STS modifies its product prices according to BelAir’s requirements.

C) BelAir buys a system from the vendor who offers the cheapest prices.

68) The biggest increases in productivity result from increased system efficiency rather than system effectiveness.

FALSE

69) Business case arguments based on faith do not require hard data based on system costs.

TRUE

70) The total cost of ownership is focused on understanding not only the total cost of acquisition but also all costs associated with ongoing use and maintenance of a system.

TRUE

71) Salaries and benefits for personnel managing a system are non-recurring costs.

FALSE

72) A break-even analysis is a type of cost-benefit analysis to identify at what point tangible benefits equal tangible costs.

TRUE

73) A net-present-value analysis is an analysis of the relevant cash flow streams associated with the system at the organization’s discount rate.

TRUE

74) When making the case for an IS investment, it is undesirable to translate all potential benefits into monetary terms.

FALSE

75) Steering committees are ill-equipped to handle larger, riskier projects.

FALSE

76) Proxy variables can be used to measure changes in terms of their perceived value to the organization.

TRUE

77) Traditionally, the most common option for packaged software was commercial off-the-shelf software.

TRUE

78) The first phase of the systems development lifecycle is systems design.

FALSE

79) Requirements collection is the process of gathering and organizing information to understand how a proposed information system should function.

TRUE

80) Strategic alignment considers the number of individuals and the length of time needed to complete a project.

FALSE

81) In an entity-relationship diagram, each data entity can have only one attribute that describes it.

FALSE

82) Data flows represent the movement of data through an organization or within an information system.

TRUE

83) Processing logic represents the way in which data are transformed.

TRUE

84) System conversion is the process of decommissioning the current way of doing things and installing the new system in the organization.

TRUE

85) Corrective maintenance involves making changes to an information system to evolve its functionality, to accommodate changing business needs, or to migrate it to a different operating environment.

FALSE

86) Purchasing an existing system from an outside vendor is referred to as outsourcing.

FALSE

87) An RFP is sent to buyers who might potentially be interested in buying hardware and/or software for the system.

FALSE

88) Systems benchmarking is the use of standardized performance tests to facilitate comparison between systems.

TRUE

89) Public domain software severely restricts access to the source code and gives users no rights to copy or modify the software.

FALSE

90) In a basic relationship, the buyer and the supplier set preferences and prices to the benefit of each other.

FALSE

91) What is the productivity paradox for technology investments? Explain the possible reasons for the productivity paradox.

Answer: While it is easy to quantify the costs associated with developing an information system, it is often difficult to quantify tangible productivity gains from its use. In many cases, IS expenditures, salaries, and the number of people on the IS staff have all been rising, but results from these investments have often been disappointing. It has been difficult to show that these vast expenditures on technologies have led to productivity gains. Information systems may have increased productivity, but other forces may have simultaneously worked to reduce it, the end results being difficult to identify. Factors such as government regulations, more complex tax codes, stricter financial reporting requirements, and more complex products can all have major impacts on a firm’s productivity. Measurement Problems: In many cases, the benefits of information systems are difficult to pinpoint because firms may be measuring the wrong things. Often, the biggest increases in productivity result from increased system effectiveness (i.e., the extent to which a system enables people and/or the firm to accomplish goals or tasks well). Unfortunately, many business metrics focus on system efficiency (i.e., the extent to which a system enables people and/or the firm to do things faster, at lower cost, or with relatively little time and effort). Time Lags: A second explanation for why productivity is sometimes difficult to demonstrate for some technology investments is that a significant time lag may occur from when a company makes the investment until that investment is translated into improvement in the bottom line. Redistribution: A third possible explanation for why IS productivity figures are not always easy to define is that a new type of system may be beneficial for individual firms but not for a particular industry or the economy as a whole. Particularly in competitive situations, new innovations may be used to redistribute the pieces of the pie rather than making the whole pie bigger. The result for the industry or economy as a whole is a wash—that is, the same number of products is being sold, and the same number of dollars is being spread across all the firms. Mismanagement: A fourth explanation is that the new system has not been implemented and managed well. Some believe that people often simply build bad systems, implement them poorly, and rely on technology fixes when the organization has problems that require a joint technology/process solution. Rather than increasing outputs or profits, IS investments might merely be a temporary bandage and may serve to mask or even increase organizational slack and inefficiency.

92) Explain the three types of arguments commonly made in the business case for an information system. Give an example for each.

Answer: People make a variety of arguments in their business cases for information systems. When managers make the business case for an information system, they typically base their arguments on faith, fear, and/or facts. Business case arguments based on faith: In some situations, arguments based on faith can be the most compelling and can drive the decision to invest in an information system despite the lack of any hard data on system costs, or even in the face of some data that say that the dollar cost for the system will be high. Arguments based on faith often hold that an information system must be implemented in order to achieve the organization’s strategy effectively and to gain or sustain a competitive advantage over rivals. Successful business case arguments based on faith should clearly describe the firm’s mission and objectives, the strategy for achieving them, and the types of information systems that are needed in order to enact the strategy. For example, a person making a business case based on faith might say: "I’m convinced that having this customer relationship management system will enable us to serve our customers significantly better than our competitors do." Business case arguments based on fear: These arguments are based on fear that if the system is not implemented, the firm will lose out to the competition or, worse, go out of business. The argument for the business case here would be something like, "If we do not implement this system, we run the risk of being sued or, worse, being thrown in jail." Business case arguments based on fact: Many people, including most chief financial officers, want to see the business case for an information system based on some convincing, quantitative analysis that proves beyond the shadow of a doubt that the benefits of the system will outweigh the costs. The most common way to prove this is to provide a detailed cost-benefit analysis of the information system. Arguments are based on data, quantitative analysis, and/or indisputable factors. An example of a business case based on facts is, "This analysis shows that implementing the inventory control system will help us reduce errors by 50 percent, reduce operating costs by 15 percent a year, increase production by 5 percent a year, and will pay for itself within eighteen months."

93) Explain how a cost-benefit analysis could be used to build a fact-based business case.

Answer: Many people, including most chief financial officers, want to see the business case for an information system based on some convincing, quantitative analysis that proves beyond the shadow of a doubt that the benefits of the system will outweigh the costs. The most common way to prove this is to provide a detailed cost-benefit analysis of the information system. One goal of a cost-benefit analysis is to accurately determine the total cost of ownership (TCO) for an investment. TCO is focused on understanding not only the total cost of acquisition but also all costs associated with ongoing use and maintenance of a system. Consequently, costs can usually be divided into two categories: nonrecurring costs and recurring costs. Next, you determine both tangible benefits and intangible benefits. A simplified cost-benefit analysis contrasts the total expected tangible costs versus the tangible benefits. Alternatively, you could perform a break-even analysis—a type of cost benefit analysis to identify at what point (if ever) tangible benefits equal tangible costs—or a more formal net-present-value analysis of the relevant cash flow streams associated with the system at the organization’s discount rate (i.e., the rate of return used by an organization to compute the present value of future cash flows).

94) List and explain the main steps in the systems development life cycle.

Answer: The term systems development life cycle (SDLC) describes the life of an information system from conception to retirement. The SDLC has four primary phases: 1. Systems planning and selection: The first phase of the SDLC is systems planning and selection. An organization must take care that only those projects that are critical to enabling the organization’s mission, goals, and objectives are undertaken. Consequently, the goal of systems planning and selection is simply to identify, plan, and select a development project from all possible projects that could be performed. 2. Systems analysis: The second phase of the SDLC is called systems analysis. One purpose of the systems analysis phase is for designers to gain a thorough understanding of an organization’s current way of doing things in the area for which the new information system will be constructed. The process of conducting an analysis requires that many tasks, or subphases, be performed. The first subphase focuses on determining system requirements. To determine the requirements, an analyst works closely with users to determine what is needed from the proposed system. After collecting the requirements, analysts organize this information using data, process, and logic modeling tools. 3. Systems design: The third phase of the SDLC is systems design. It is during this phase that the proposed system is designed; that is, the details of the chosen approach are elaborated. As with analysis, many different activities must occur during systems design. The elements that must be designed when building an information system include the following: (1) human-computer interface, (2) databases and files, and (3) processing and logic. 4. Systems implementation and operation: Many separate activities occur during systems implementation, the fourth phase of the SDLC. One group of activities focuses on transforming the system design into a working information system. These activities include software programming and testing. A second group of activities focuses on preparing the organization for using the new information system. These activities include system conversion, documentation, user training, and support.

95) Describe some methods of requirements collection during systems analysis.

Answer: The collection and structuring of requirements is arguably the most important activity in the systems development process because how well the IS requirements are defined influences all subsequent activities. Requirements collection is the process of gathering and organizing information from users, managers, customers, business processes, and documents to understand how a proposed information system should function. Systems analysts use a variety of techniques for collecting system requirements, including the following: • Interviews: Analysts interview people informed about the operation and issues of the current or proposed system. • Questionnaires.: Analysts design and administer surveys to gather opinions from people informed about the operation and issues of the current or proposed system. • Observations: Analysts observe workers at selected times to see how data are handled and what information people need to do their jobs. • Document analysis: Analysts study business documents to discover issues, policies, and rules as well as concrete examples of the use of data and information in the organization. • Joint application design: Joint application design (JAD) is a group meeting-based process for requirements collection. During this meeting, the users jointly define and agree on system requirements or designs. This process can result in dramatic reductions in the length of time needed to collect requirements or specify designs.

96) Describe the elements that must be considered during the systems design phase of the SDLC.

Answer: The elements that must be designed when building an information system include the following: (1) human-computer interface, (2) databases and files, and (3) processing and logic. Designing the human-computer interface: Just as people have different ways of interacting with other people, information systems can have different ways of interacting with people. A human-computer interface (HCI) is the point of contact between a system and users. Designing databases and files: To design databases and files, a systems analyst must have a thorough understanding of an organization’s data and informational needs. Designing processing and logic: The processing and logic operations of an information system are the steps and procedures that transform raw data inputs into new or modified information.

97) What are the different types of software maintenance?

Answer: After an information system is installed, it is essentially in the maintenance phase of the SDLC, in which an information system is systematically repaired and/or improved. The types of maintenance are the following: Corrective maintenance: Making changes to an information system to repair flaws in the design, coding, or implementation Adaptive maintenance: Making changes to an information system to evolve its functionality, to accommodate changing business needs, or to migrate it to a different operating environment. Perfective maintenance: Making enhancements to improve processing performance or interface usability, or adding desired but not necessarily required system features. Preventive maintenance: Making changes to a system to reduce the chance of future system failure.

98) Describe the steps in the external acquisition process for information systems.

Answer: Most external acquisition processes have at least five general steps: Systems planning and selection: The first phase of the SDLC is systems planning and selection. An organization must take care that only those projects that are critical to enabling the organization’s mission, goals, and objectives are undertaken. Consequently, the goal of systems planning and selection is simply to identify, plan, and select a development project from all possible projects that could be performed. Systems analysis: The second phase of the SDLC is called systems analysis. One purpose of the systems analysis phase is for designers to gain a thorough understanding of an organization’s current way of doing things in the area for which the new information system will be constructed. The process of conducting an analysis requires that many tasks, or subphases, be performed. The first subphase focuses on determining system requirements. To determine the requirements, an analyst works closely with users to determine what is needed from the proposed system. After collecting the requirements, analysts organize this information using data, process, and logic modeling tools. Development of a request for proposal: A request for proposal (RFP) is simply a document that is used to tell vendors what your requirements are and to invite them to provide information about how they might be able to meet those requirements. An RFP is sent to vendors who might potentially be interested in providing hardware and/or software for the system. Proposal evaluation: The fourth step in external acquisition is to evaluate proposals received from vendors. This evaluation may include viewing system demonstrations, evaluating the performance of those systems, and examining criteria important to the organization and judging how the proposed systems "stack up" to those criteria. Demonstrations are a good way to get a feel for the different systems’ capabilities. Vendor selection: One way of doing this is by devising a scoring system for each of the criteria and benchmarking results. Companies may use other, less formalized approaches to evaluate vendors. Sometimes they use simple checklists; other times they use a more subjective process. Regardless of the mechanism, eventually a company completes the evaluation stage and selects a vendor, ending the external acquisition process.

99) What is an RFP? What areas does an RFP cover?

Answer: A request for proposal (RFP) is a document that is used to tell vendors what your requirements are and to invite them to provide information about how they might be able to meet those requirements. An RFP is sent to vendors who might potentially be interested in providing hardware and/or software for the system. Among the areas that may be covered in an RFP are the following: • A summary of existing systems and applications • Requirements for system performance and features • Reliability, backup, and service requirements • The criteria that will be used to evaluate proposals • Timetable and budget constraints The RFP is then sent to prospective vendors along with an invitation to present their bids for the project.

100) Explain the reasons why a firm might choose to outsource its information systems services

Answer: A firm might outsource some (or all) of its information systems services for many reasons. Some of these are old reasons, but some are new to today’s environment: • Cost and quality concerns: In many cases it is possible to achieve higher-quality systems at a lower price through economies of scale, better management of hardware, lower labor costs, and better software licenses on the part of a service provider. • Problems in IS performance: IS departments may have problems meeting acceptable service standards because of cost overruns, delayed systems, underutilized systems, or poorly performing systems. In such cases, organizational management may attempt to increase reliability through outsourcing. • Supplier pressures: Some of the largest service providers are also the largest suppliers of computer equipment (e.g., IBM or Hewlett-Packard). In some cases, the aggressive sales forces of these suppliers are able to convince senior managers at other organizations to outsource their IS functions. • Simplifying, downsizing, and reengineering: Organizations under competitive pressure often attempt to focus on only their "core competencies." In many cases, organizations simply decide that running information systems is not one of their core competencies and decide to outsource this function to companies whose primary competency is developing and maintaining information systems. • Financial factors: When firms turn over their information systems to a service provider, they can sometimes strengthen their balance sheets by liquidating their IT assets. • Organizational culture: Political or organizational problems are often difficult for an IS group to overcome. However, an external service provider often brings enough clout, devoid of any organizational or functional ties, to streamline IS operations as needed. • Internal irritants: Tension between end users and the IS staff is sometimes difficult to eliminate. At times this tension can intrude on the daily operations of the organization, and the idea of a remote, external, relatively neutral IS group can be appealing.