Management Information Systems, 12e (Laudon

)
Chapter 14 Managing Projects

1) Between 30 and 40 percent of all software projects are "runaway" projects that far exceed
original schedule and budget projections.
Answer: TRUE
Diff: 2 Page Ref: 529
AACSB: Reflective Thinking
CASE: Content
Objective: 14.1

2) An information system project's scope is directly related to its business requirements.
Answer: TRUE
Diff: 2 Page Ref: 530
AACSB: Analytic Skills
CASE: Analysis
Objective: 14.1

3) The information systems steering committee is composed of information systems managers
and end-user managers responsible for overseeing several specific information systems projects.
Answer: FALSE
Diff: 3 Page Ref: 531-532
AACSB: Reflective Thinking
CASE: Content
Objective: 14.2

4) An information systems plan contains a statement of corporate goals and specifies how
information technology will support the attainment of those goals.
Answer: TRUE
Diff: 2 Page Ref: 532
AACSB: Reflective Thinking
CASE: Content
Objective: 14.2

5) If an intended benefit of an IT project is improved decision making, managers should develop
a set of metrics to quantify the value of an improved decision.
Answer: TRUE
Diff: 2 Page Ref: 532
AACSB: Reflective Thinking
CASE: Content
Objective: 14.2

1
Copyright © 2012 Pearson Education, Inc.

6) Scoring models are used most commonly to support decisions rather than as the final arbiters
of system selection.
Answer: TRUE
Diff: 2 Page Ref: 536
AACSB: Reflective Thinking
CASE: Content
Objective: 14.2

7) Transaction and clerical systems that displace labor and save space typically produce more
measurable, tangible benefits than management information systems.
Answer: TRUE
Diff: 3 Page Ref: 537
AACSB: Reflective Thinking
CASE: Content
Objective: 14.3

8) More timely information is a tangible benefit of information systems.
Answer: FALSE
Diff: 2 Page Ref: 537
AACSB: Reflective Thinking
CASE: Content
Objective: 14.3

9) Intangible benefits cannot be immediately quantified but may lead to quantifiable gains in the
long run.
Answer: TRUE
Diff: 1 Page Ref: 537
AACSB: Reflective Thinking
CASE: Content
Objective: 14.3

10) A benefit of using TCO analysis to evaluate an information technology investment is that it
is able to incorporate intangible and "soft" factors such as benefits and complexity costs.
Answer: FALSE
Diff: 2 Page Ref: 538
AACSB: Reflective Thinking
CASE: Content
Objective: 14.3

11) Real options pricing models use the concept of options valuation borrowed from the financial
industry.
Answer: TRUE
Diff: 1 Page Ref: 538
AACSB: Reflective Thinking
CASE: Content
Objective: 14.3

2
Copyright © 2012 Pearson Education, Inc.

5 17) Counterimplementation refers to a deliberate strategy to thwart the implementation of an information system or an innovation in an organization. . Answer: TRUE Diff: 2 Page Ref: 546 AACSB: Reflective Thinking CASE: Content Objective: 14. within budget. Inc.4 13) The larger the systems project.4 15) User concerns and designer concerns are usually the same at the beginning of the project but may diverge later as the system is built.4 14) The relationship between users and information systems specialists has traditionally been a problem area for information systems implementation efforts.4 16) A Gantt chart graphically depicts project tasks and their interrelationships. and according to project requirements.12) The systems analyst is the catalyst for the entire change process and is responsible for making sure that everyone involved accepts the changes created by a new system. Answer: FALSE Diff: 2 Page Ref: 541 AACSB: Reflective Thinking CASE: Content Objective: 14. Answer: TRUE Diff: 1 Page Ref: 540 AACSB: Reflective Thinking CASE: Content Objective: 14.5 3 Copyright © 2012 Pearson Education. Answer: TRUE Diff: 1 Page Ref: 541 AACSB: Reflective Thinking CASE: Content Objective: 14. Answer: FALSE Diff: 2 Page Ref: 543 AACSB: Reflective Thinking CASE: Content Objective: 14. Answer: TRUE Diff: 1 Page Ref: 541 AACSB: Reflective Thinking CASE: Content Objective: 14. the more risk the project runs in terms of being completed on time.

scope. and performance. C) time. cost. performance. quality. Answer: FALSE Diff: 2 Page Ref: 546 AACSB: Analytic Skills CASE: Analysis Objective: 14. time.5 21) On average. and risk. private sector IT projects underestimated budget and delivery time of systems by ________ percent.5 19) The design of jobs. cost. B) scope. cost. time. and risk. Answer: B Diff: 2 Page Ref: 530 AACSB: Reflective Thinking CASE: Content Objective: 14.18) Mandatory use of a system is one effective way of overcoming user resistance to an information system. Answer: TRUE Diff: 2 Page Ref: 546 AACSB: Reflective Thinking CASE: Content Objective: 14. quality. A) 30 B) 40 C) 50 D) 60 Answer: C Diff: 2 Page Ref: 529 AACSB: Reflective Thinking CASE: Content Objective: 14. Inc. cost. and performance.1 4 Copyright © 2012 Pearson Education. health issues. . and the end-user interface of information systems are all considerations in the field of ergonomics. D) time. Answer: FALSE Diff: 3 Page Ref: 548 AACSB: Reflective Thinking CASE: Content Objective: 14.1 22) The major variables in project management are A) scope.5 20) The goal of sociotechnical design is to create systems with better user interfaces and contribute to fewer health issues.

and perhaps database specialists.2 5 Copyright © 2012 Pearson Education.2 26) The ________ consists of systems analysts. specialists from the relevant end-user business areas.2 24) The ________ is directly responsible for the individual systems project. B) the CIO. Inc. A) project management group B) project team C) IS steering committee D) corporate strategic planning committee Answer: C Diff: 2 Page Ref: 532 AACSB: Reflective Thinking CASE: Content Objective: 14. . D) the IS steering committee. Answer: C Diff: 2 Page Ref: 531 AACSB: Reflective Thinking CASE: Content Objective: 14.2 25) The ________ reviews and approves plans for systems in all divisions. application programmers. A) project management group B) project team C) IS steering committee D) corporate strategic planning committee Answer: B Diff: 2 Page Ref: 532 AACSB: Reflective Thinking CASE: Content Objective: 14.23) At the top of the management structure for information systems projects in a large company is A) project management. A) project management group B) project team C) IS steering committee D) corporate strategic planning committee Answer: B Diff: 2 Page Ref: 532 AACSB: Reflective Thinking CASE: Content Objective: 14. C) the corporate strategic planning group.

Answer: C Diff: 2 Page Ref: 532 AACSB: Reflective Thinking CASE: Content Objective: 14. D) enterprise analysis. the management strategy. the rationale. B) identifying the key entities and attributes of the organization's data. D) the development of DSSs and ESSs. B) portfolio analysis. D) interview a small number of top managers to identify their goals and criteria for achieving success. and the budget is called a(n) A) project plan. .2 29) The principal method used in CFS analysis is to A) inventory all of the organization's information systems projects and assets and assign risk levels. Answer: D Diff: 2 Page Ref: 534 AACSB: Reflective Thinking CASE: Content Objective: 14.2 28) A CSF approach to establishing an enterprise's information requirements is especially suitable for A) distinguishing between individual and organizational objectives. C) information systems plan. C) survey a large sample of managers on their objectives. C) understanding how organizational units define critical data.2 6 Copyright © 2012 Pearson Education. decision-making process. new developments to consider. B) perform a weighted comparison of the criteria used to evaluate a system. and uses and needs for data and information. Inc.27) A road map indicating the direction of systems development. Answer: D Diff: 3 Page Ref: 534 AACSB: Reflective Thinking CASE: Content Objective: 14. the implementation plan. the current systems.

2 33) Which method would you use is used to develop risk profiles for a firm's information system projects and assets? A) information systems plan B) scoring model C) portfolio analysis D) CSF Answer: C Diff: 2 Page Ref: 534 AACSB: Reflective Thinking CASE: Content Objective: 14. C) distinguish between organizational and individual CSFs. and uses and needs for data and information. B) perform a weighted comparison of the criteria used to evaluate a system. D) interview a small number of top managers to identify their goals and criteria for achieving success. Inc. C) select only low-risk. D) identify operational managers that can accurately portray the day-to-day information needs of the firm. C) survey a large sample of managers on their objectives. decision-making process. high reward projects with lower-risk projects. B) limit work to those projects with great rewards.2 31) The central method used in a portfolio analysis is to A) inventory all of the organization's information systems projects and assets. D) balance high-risk. B) create a broad inquiry into the various types of information used in the company.2 7 Copyright © 2012 Pearson Education. Answer: A Diff: 2 Page Ref: 534 AACSB: Reflective Thinking CASE: Content Objective: 14. Answer: C Diff: 1 Page Ref: 534 AACSB: Reflective Thinking CASE: Content Objective: 14.2 32) In using a portfolio analysis to determine which IT projects to pursue. it is important to A) interview as many employees from different levels of the company as possible. you would A) select the most low-risk projects from the inventory. . high-reward projects. Answer: D Diff: 2 Page Ref: 535 AACSB: Reflective Thinking CASE: Content Objective: 14.30) In CFS analysis.

B) perform a weighted comparison of the criteria used to evaluate a system. any project might be beneficial Answer: C Diff: 2 Page Ref: 535 AACSB: Analytic Skills CASE: Analysis Objective: 14.2 35) You have been hired by a pharmaceutical company to evaluate its inventory of systems and IT projects. Answer: B Diff: 2 Page Ref: 535 AACSB: Reflective Thinking CASE: Content Objective: 14. C) the IS steering committee. decision-making process. D) interview a small number of top managers to identify their goals and criteria for achieving success. C) survey a large sample of managers on their objectives.2 36) Which method is used to assign weights to various features of a system? A) information systems plan B) scoring model C) portfolio analysis D) CSF Answer: B Diff: 1 Page Ref: 535 AACSB: Reflective Thinking CASE: Content Objective: 14. D) systems analysts. . B) a CSF analysis. Inc.2 8 Copyright © 2012 Pearson Education.2 37) The criteria used for evaluation in a scoring model are usually determined by A) lengthy discussions among the decision-making group.34) The central method used in a scoring model is to A) inventory all of the organization's information systems projects and assets. low benefit projects D) none. Answer: A Diff: 3 Page Ref: 535 AACSB: Reflective Thinking CASE: Content Objective: 14. and uses and needs for data and information. Which types of projects would be best avoided? A) any high risk projects B) any low-benefit projects C) all high-risk.

Answer: D Diff: 1 Page Ref: 536-537 AACSB: Analytic Skills CASE: Evaluation Objective: 14. B) adherence to information requirements. Answer: D Diff: 2 Page Ref: 537 AACSB: Reflective Thinking CASE: Content Objective: 14.38) All of the following are intangible benefits of information systems except A) improved asset utilization.3 9 Copyright © 2012 Pearson Education.3 40) The worth of systems from a financial perspective essentially revolves around the issue of A) CSFs. C) asset utilization. D) return on invested capital. Inc. D) reduced workforce. C) improved operations.3 39) Which of the following is not a tangible benefit of information systems? A) reduced rate of growth in expenses B) lower computer expenses C) improved resource control D) increased productivity Answer: C Diff: 2 Page Ref: 537 AACSB: Reflective Thinking CASE: Content Objective: 14. B) increased organizational learning. .

the net present value. D) right to purchase or sell an asset a later date at a fixed price.3 42) In working with ROPMs and options valuation. Answer: D Diff: 2 Page Ref: 538 AACSB: Reflective Thinking CASE: Content Objective: 14. C) external rate of return. B. the accounting rate of return on investment (ROI). and the A) future present value. C) right to purchase an asset a later date at a strike price.3 10 Copyright © 2012 Pearson Education. a call option is a(n) A) obligation to purchase an asset at a later date at a fixed price.41) You are using a capital budgeting method to assess the worth of your company's new information system. B) obligation to either purchase or sell an asset at a later date at a strike price. B) internal rate of return. Inc. .3 43) The principal capital budgeting models for evaluating information technology projects are the payback method. Answer: B Diff: 2 Page Ref: 538 AACSB: Reflective Thinking CASE: Content Objective: 14. Which of the following costs would you include in measuring the cash outflow? A) increased sales of products B) hardware and software expenditures C) labor expenditures D) reduced costs in production and operation E) both A and D F) both B and C G) A. D) ROPM. C and D Answer: F Diff: 2 Page Ref: 534 AACSB: Analytic Skills CASE: Evaluation Objective: 14.

C) the required technical expertise. B) good equipment. Answer: C Diff: 3 Page Ref: 540 AACSB: Reflective Thinking CASE: Content Objective: 14. C) initial expenditures on IT projects are seen as creating the right to pursue and obtain benefits from the system at a later date. and the implementation plan.4 11 Copyright © 2012 Pearson Education. Answer: C Diff: 2 Page Ref: 539 AACSB: Analytic Skills CASE: Analysis Objective: 14. C) a scoring model.44) ROPMs value information systems similar to stock options. D) financial studies and plans. project scope. and project budget. D) expenditures and benefits from IT projects are seen as inflows and outflows of cash that can be treated themselves like options. Answer: B Diff: 2 Page Ref: 538 AACSB: Analytic Skills CASE: Analysis Objective: 14. and the level of technical expertise. B) a company's worth can be evaluated by the worth of their ROPMs.4 47) The project risk will rise if the project team and the IS staff lack A) legacy applications as a starting point. C) project scope. from a financial standpoint. an IT investment whose benefits cannot be firmly established in advance. Inc. Answer: A Diff: 2 Page Ref: 540 AACSB: Reflective Thinking CASE: Content Objective: 14. D) project size. .3 46) The level of a project's risk is influenced primarily by A) project size. in that A) ROPMs can be bought and sold like stocks. B) the real option pricing model. B) project cost.3 45) To best evaluate. project structure. D) the net present value. project schedule. you would use A) capital budgeting. project scope. and the level of technical expertise.

Answer: B Diff: 2 Page Ref: 540-542 AACSB: Analytic Skills CASE: Analysis Objective: 14.4 50) One example of an implementation problem is A) poor user interface. C) project running over budget. D) acceptance. C) implementation. management. Answer: A Diff: 1 Page Ref: 540-542 AACSB: Analytic Skills CASE: Evaluation Objective: 14.4 51) According to your reading of the chapter. B) maintenance. Answer: C Diff: 1 Page Ref: 540 AACSB: Reflective Thinking CASE: Content Objective: 14. B) inadequate user training. C) is used primarily to mandate user acceptance. . B) begins when a project is implemented. change management is a process that A) should be addressed before a project is developed. Inc. D) must be addressed in all systems development. D) changes in job activities and responsibilities.4 12 Copyright © 2012 Pearson Education. and routinization of a new information system are called A) production.4 49) Which of the following is not one of the activities of the systems analyst? A) acting as a change agent B) communication with users C) mediating between competing interest groups D) formulation of capital budgeting models Answer: D Diff: 1 Page Ref: 541 AACSB: Reflective Thinking CASE: Content Objective: 14.48) The organizational activities working toward the adoption.

. Answer: F Diff: 1 Page Ref: 541 AACSB: Reflective Thinking CASE: Content Objective: 14. D) A and B.4 13 Copyright © 2012 Pearson Education. Inc.4 55) Which of the following is not a responsibility of effective change management? A) integrating legacy systems B) dealing with fear and anxiety about new systems C) training users of the new system D) enforcing user participation at all stages of system development Answer: A Diff: 2 Page Ref: 542 AACSB: Analytic Skills CASE: Analysis Objective: 14. E) B and C.4 54) Which of the following types of projects is most likely to fail? A) integration of an third-party automated payment system B) replacement of middleware with Web services for legacy application integration C) a business process redesign project that restructures workflow and responsibilities D) redesigning a user interface to an online investment site Answer: C Diff: 2 Page Ref: 542 AACSB: Analytic Skills CASE: Evaluation Objective: 14. C) are able to provide optimum hardware and software efficiency. Answer: A Diff: 2 Page Ref: 541 AACSB: Reflective Thinking CASE: Content Objective: 14.52) Users prefer systems that A) are oriented to facilitating organizational tasks and solving business problems. D) are capable of storing much more data than they need. B) work with existing DBMS. F) all of the above. B) interests.4 53) The communications gap between users and systems designers is created by their differences in A) backgrounds. C) priorities.

56) Which of the following tools would you use to control risk factors in an information systems project? A) internal integration tools B) external integration tools C) formal planning tools and formal control tools D) A and B E) A and C F) all of the above Answer: F Diff: 1 Page Ref: 543-546 AACSB: Reflective Thinking CASE: Content Objective: 14. Answer: A Diff: 3 Page Ref: 543 AACSB: Reflective Thinking CASE: Content Objective: 14.5 58) An example of using an internal integration tool would be to A) define task dependencies. D) consist of ways to link the work of the implementation team with users at all organization levels. B) enable a project manager to properly document and monitor project plans. Inc. B) include user representatives as active members of the project team. . D) hold frequent project team meetings. Answer: D Diff: 2 Page Ref: 543 AACSB: Analytic Skills CASE: Synthesis Objective: 14. C) create a PERT chart. C) portray a project as a network diagram with numbered nodes representing project tasks.5 14 Copyright © 2012 Pearson Education.5 57) Internal integration tools A) enable a project to have sufficient technical support for project management and development.

5 60) External integration tools A) enable a project to have sufficient technical support for project management and development. B) enable a project manager to properly document and monitor project plans. B) enable a project manager to properly document and monitor project plans. . C) portray a project as a network diagram with numbered nodes representing project tasks.59) Formal planning and control tools A) enable a project to have sufficient technical support for project management and development. C) portray a project as a network diagram with numbered nodes representing project tasks.5 15 Copyright © 2012 Pearson Education. Answer: B Diff: 2 Page Ref: 543 AACSB: Reflective Thinking CASE: Content Objective: 14.5 61) An example of using an external integration tool would be to A) define task dependencies. Answer: D Diff: 2 Page Ref: 545 AACSB: Reflective Thinking CASE: Content Objective: 14. B) include user representatives as active members of the project team. Answer: B Diff: 3 Page Ref: 545 AACSB: Analytic Skills CASE: Synthesis Objective: 14. C) create a PERT chart. D) consist of ways to link the work of the implementation team with users at all organization levels. D) consist of ways to link the work of the implementation team with users at all organization levels. Inc. D) hold frequent project team meetings.

5 65) Which of the following is a limitation of using a financial approach to evaluate information systems? A) inability to measure ROI B) inability to control vendor costs C) inability to assess risk D) inability to assess costs from organizational disruption Answer: D Diff: 1 Page Ref: 539 AACSB: Analytic Skills CASE: Evaluation Objective: 14.62) Which type of planning tool shows each task as a horizontal bar whose length is proportional to the time required to complete it? A) PERT chart B) Gantt chart C) both A and B D) neither A nor B Answer: B Diff: 2 Page Ref: 543 AACSB: Reflective Thinking CASE: Content Objective: 14. you would use a A) PERT chart.3 16 Copyright © 2012 Pearson Education. Inc.5 63) To review a project's tasks and their interrelationships. C) either A or B. B) Gantt chart. D) neither A nor B. Answer: A Diff: 2 Page Ref: 543 AACSB: Reflective Thinking CASE: Content Objective: 14.5 64) Which type of tool helps project managers identify bottlenecks in project development? A) internal integration tools B) external integration tools C) formal planning and control tools D) both B and C Answer: C Diff: 1 Page Ref: 543 AACSB: Reflective Thinking CASE: Content Objective: 14. .

B) Projects with relatively undefined goals are more likely to be subjected to users changing requirements and run a higher risk of not satisfying project goals. B) ergonomic features of a system and the system's technical design are given equal importance. tested. and run a higher risk of programmers and users misunderstanding the ultimate goals. C) systems analysts with proven backgrounds in sociological concerns rate and compare a system's social and technical aspects. and pose less risk of running up unforeseen costs. C) Highly structured projects tend to be larger. and implemented using cutting-edge RAD and JAD development techniques.4 67) Which of the following is not an organizational factor in systems planning and implementation? A) standards and performance monitoring B) government regulatory compliance C) health and safety D) user interface Answer: D Diff: 1 Page Ref: 546 AACSB: Reflective Thinking CASE: Content Objective: 14. affecting more organizational units.5 17 Copyright © 2012 Pearson Education. .5 68) In sociotechnical design A) separate sets of technical and social design solutions are developed and compared. D) Less structured projects are more able to be quickly developed. Answer: A Diff: 2 Page Ref: 548 AACSB: Reflective Thinking CASE: Content Objective: 14. and run both the risk of out-of-control costs and becoming too difficult to control. Inc.66) Which of the following statements best describes the effect of project structure on overall project risk? A) Highly structured projects are more complex. D) all of the above. Answer: B Diff: 2 Page Ref: 540 AACSB: Analytic Skills CASE: Analysis Objective: 14.

Answer: change Diff: 2 Page Ref: 540 AACSB: Reflective Thinking CASE: Content Objective: 14. Answer: C Diff: 1 Page Ref: 549 AACSB: Reflective Thinking CASE: Content Objective: 14. D) Microsoft Excel. tools and techniques to achieve specific targets within specified budget and time constraints. . Answer: Project management Diff: 1 Page Ref: 530 AACSB: Reflective Thinking CASE: Content Objective: 14. Answer: quality Diff: 1 Page Ref: 530 AACSB: Reflective Thinking CASE: Content Objective: 14. ________ is an indicator of how well the project satisfies management objectives.4 18 Copyright © 2012 Pearson Education.5 70) As discussed in the chapter. skills.1 72) One of the five major variables in project management.1 73) Successful system building requires careful ________ management to minimize organizational resistance. Inc. which of the following is not one of the immediate consequences of inadequate software project management? A) cost overruns B) organizational conflict C) time slippage D) technical shortfalls Answer: B Diff: 1 Page Ref: 529 AACSB: Analytic Skills CASE: Analysis Objective: 14. C) Microsoft Project.1 71) ________ refers to the application of knowledge. B) IBM Project Guide.69) The most widely used project management software today is A) Vertabase.

stock options Diff: 3 Page Ref: 539 AACSB: Reflective Thinking CASE: Content Objective: 14. interests and priorities that impedes discussion and problem solving among users and IS specialists. Answer: options. Inc.74) A(n) ________ is a method for deciding among alternative systems based on a system of ratings for selected objectives.2 75) ________ benefits cannot be immediately measured but may lead to measurable gains over time.3 19 Copyright © 2012 Pearson Education. Answer: communications gap Diff: 2 Page Ref: 541 AACSB: Reflective Thinking CASE: Content Objective: 14. Answer: scoring model Diff: 2 Page Ref: 535 AACSB: Reflective Thinking CASE: Content Objective: 14.3 76) ________ methods rely on measures of cash flows into and out of the firm. .3 77) A(n) ________ is the individual who acts as the catalyst to ensure successful adaptation to a new system or innovation. Answer: change agent Diff: 2 Page Ref: 541 AACSB: Reflective Thinking CASE: Content Objective: 14. Answer: Intangible Diff: 1 Page Ref: 537 AACSB: Reflective Thinking CASE: Content Objective: 14. Answer: Capital budgeting Diff: 2 Page Ref: 538 AACSB: Reflective Thinking CASE: Content Objective: 14.4 78) A user-designer ________ occurs when there is a difference in background.4 79) Real Options Pricing Models (ROPMs) value systems projects similar to ________.

What factors will you use to measure the success of a project? What questions would you ask in order to understand why a project succeeded or failed? Answer: Student answers will vary but should include an understanding of the main project variables: Scope. employee-oriented problems? • What difficulties occurred that were a consequence of environmental. Inc. and the end-user interface of information systems. Answer: Ergonomics Diff: 2 Page Ref: 546 AACSB: Reflective Thinking CASE: Content Objective: 14. health issues. quality.80) ________ is the interaction of people and machines in the work environment.2 20 Copyright © 2012 Pearson Education. organizational. time. and risk. A sample answer is: The factors I would use are: • Cost: What was the original budget and final budget? • Time: What was the original schedule and final schedule? • Quality: Did the project meet the requirements outlined in the project plan? • Scope: Did the scope of the project change? Questions I would ask to understand the success or failure of the project would be: • What technical difficulties were experienced and which could have been foreseen? • What risks did the project entail? • What events led to the scope changing? • What difficulties occurred that were a consequence of personal. or managerial challenges? • What do project team members consider as the primary challenges? • What do clients or stakeholders consider as the primary challenges? Diff: 2 Page Ref: 529-531 AACSB: Analytic Skills CASE: Synthesis Objective: 14. cost. including the design of jobs.5 81) You are working as a project manager for a small IT consulting firm and have been asked to create a plan for reviewing and auditing completed projects in order to gauge their success. .

Answer: In a large corporation. They can use critical success factors and/or portfolio analysis and/or scoring models to help determine the most important information systems projects to pursue. and perhaps database specialists. Diff: 2 Page Ref: 532-536 AACSB: Analytic Skills CASE: Evaluation Objective: 14. the management structure typically consists of (from top to bottom levels in the hierarchy): • Corporate strategic planning group: The higher level group of managers responsible for developing the firm's strategic plan. Answer: General categories of information included in an information plan are: • Purpose of the plan • Business rationale • Current systems or situation • New developments to consider • Management strategy • Implementation plan • Budget Diff: 3 Page Ref: 532 AACSB: Analytic Skills CASE: Analysis Objective: 14. Inc. consisting of systems analysts. Cross & Deptford.2 21 Copyright © 2012 Pearson Education. specialists from the relevant end-user business areas. • Project management: A group of information systems managers and end-user managers responsible for overseeing several specific information systems projects. but are not sure what will suit their needs.2 84) You have been hired as a consultant for a nationwide real estate firm. who are interested in achieving better organization between branches by updating their information systems. application programmers. They will need to inventory their existing systems and develop metrics to quantify any future improvements are made. • Information systems steering committee: A senior management group with responsibility for systems development and operation. What will you recommend they do in order to determine the most effective IT projects? Answer: Cross & Deptford first should have an information systems plan created to determine what their information requirements are and what systems will support their business goals. • Project team: The group directly responsible for the individual systems project. .2 83) List five types of information that should be included in an information systems plan. Diff: 2 Page Ref: 531-532 AACSB: Analytic Skills CASE: Analysis Objective: 14.82) Describe the elements of a management structure for information systems projects in a large corporation.

It assigns weights to various features of a system and then calculates the weighted totals. Inc. A mix of profiles could also be defined as acceptable in terms of the company's overall plans. High-benefit. or rating.85) Describe the process of portfolio analysis. Each feature. In a portfolio analysis. a healthy fast- food chain that is undergoing major expansion and is in need of a supply chain planning system. in terms of how important it is overall to have in the system. outsourcing contracts. In what situations is this evaluation method useful? Answer: Portfolio analysis inventories all of the organization's information systems projects and assets. you would list the various systems projects and rate them according to their potential risks and benefits. such as the processes that need support or reports they may need from the system. and licenses. High-risk.2 22 Copyright © 2012 Pearson Education. low-benefit projects would be reexamined to see if they could be modified to better fit with the companies strategic plans. while low-risk. They are evaluating two commercially available software packages. What systems evaluation model will help them assess and compare the two packages? How does this model work? Answer: A scoring model can be used for selecting projects where many criteria must be considered. high-risk projects and low-risk. Diff: 1 Page Ref: 534-535 AACSB: Analytic Skills CASE: Evaluation Objective: 14. Each package then is evaluated in terms of the percentage of requirements it contributes or supports for each criteria. similar to the financial portfolio. In the scoring model. low-benefit projects should be avoided. including infrastructure. much as is done with a financial portfolio. Diff: 2 Page Ref: 532-536 AACSB: Analytic Skills CASE: Analysis Objective: 14. the managers list is given a weight. You would use the portfolio analysis to determine which potential projects should be pursued and which should be modified or abandoned. high-benefit projects would be at the top of the list. What Smarty's would do is have decision makers such as top managers list the various features they feel are important to have in the system. or criteria. .2 86) You have been hired as a consultant to make recommendations for Smarty's. Each project can be described as having a profile of risk and benefit to the firm. you multiply the weight with the software's percentage of contribution to arrive at a score for each criteria. The scores of both software packages are totaled and compared to see overall their contribution to fulfilling the company's requirements.

87) Differentiate between intangible and tangible benefits and list three examples of each. operations. restart. Inc. If this upgraded infrastructure were available. ROPMs give managers the flexibility to stage their IT investment or test the waters with small pilot projects or prototypes to gain more knowledge about the risks of a project before investing in the entire implementation. In what types of systems are intangible benefits more predominant? Answer: Tangible benefits can be quantified and given a monetary value. reduced workforce. Systems that produce more intangible benefits are MIS. but not the obligation. Examples of intangible benefits include: improved asset utilization. lower computer expenses. organizational planning. lower clerical and professional costs. to obtain the benefits associated with further development and deployment of the technology as long as management has the freedom to cancel. telecommunications. decision making. not all of the benefits of making this investment can be established in advance. the fulfillment of legal requirements and a better corporate image. and reduced facility. Real options pricing models (ROPMs) value information systems projects similar to stock options. and personnel costs. the organization would have the technology capabilities to respond more easily to future problems and opportunities. Intangible benefits cannot be immediately quantified but may lead to quantifiable gains in the long run such as higher sales. DSS. Although the costs of this investment can be calculated.3 88) What is the purpose of using a real options pricing model to estimate the potential value of an information systems project? Answer: Some information systems projects are highly uncertain. For example.client satisfaction. lower outside vendor costs. especially investments in IT infrastructure. For example. But if the firm waits a few years until the revenue potential becomes more obvious.3 23 Copyright © 2012 Pearson Education. employee goodwill. increased flexibility. Their future revenue streams are unclear and their up-front costs are high. It is in these cases that managers might benefit from using real options pricing models to evaluate information technology investments. lower operational costs. it might be too late to make the infrastructure investment. Diff: 2 Page Ref: 538-539 AACSB: Analytic Skills CASE: Analysis Objective: 14. resource control. reduced rate of growth in expenses. . a monetary value can be given to increased productivity. services. learning. software. or change the project. more timely information and more information. job satisfaction . and collaborative work systems. Diff: 2 Page Ref: 537 AACSB: Analytic Skills CASE: Evaluation Objective: 14. where an initial expenditure on technology creates the right. consider a $20 million investment to upgrade your firm's IT infrastructure.

structure. The other project is to redesign the client interface to the company extranet to make it easier to use. as well as view project statistics. Since the time-tracking project is a new application. • Size. • Technical expertise. The time-tracking project is a larger project: It involves creating new programming that may interface with back-end systems and will immediately influence payment and cost. Compare the two projects in terms of risk factors. Inc. However. Redesigning an interface for the client extranet may simply be designing one or two pages that will be replicated for each client once the initial design is done. documents. An example answer is: The main risk factors are size. It may be easier to define the requirements of the time-tracking software. there may be some issues of making sure any in-house staff has the appropriate level of expertise. You have been assigned to evaluate two upcoming projects. . The extranet allows clients to log in and view their current Web sites under development.4 24 Copyright © 2012 Pearson Education. It also affects business processes. Understanding what makes the user interface problematic and defining ways to make it easier to use is somewhat of a less tangible quality than reporting on time. One project is to develop a time tracking solution that would allow your 20 freelancers to submit daily time sheets and would report on the time spent on each project. • Structure. Diff: 2 Page Ref: 539-540 AACSB: Analytic Skills CASE: Evaluation Objective: 14. Answer: Student answers will vary but should include an understanding of the main risks factors: size. and technical expertise. there may be a need to make sure that an expert who understands usability is present. and progress reports. and technical expertise. so this may be a concern in the second project.89) You are the senior project manager for a Web development company with upwards of 100 current client projects. The user interface involves working with existing programming that will not change. as this process is relatively straightforward. structure.

power relationships. . is creating an information system that will allow patients and doctors at participating franchises to communicate online. User training for doctors and nurses will be essential. In order to gain compliance and support of the doctors. 545-546 AACSB: Analytic Skills CASE: Synthesis Objective: 14. I would also involve focus groups of intended users to review prototypes of the system to make sure it is easy to use. and behavior that this system requires or will engender. Any organizational changes should occur prior to implementing the system. The company should also consider incentives for doctors and patients that use the system. saving patients unnecessary visits to the clinic. to determine the changes in procedures. and hopefully easier to use in the relevant health situations than going to the doctor.90) Americlinic. organizational structure. Diff: 2 Page Ref: 540-542. a national chain of budget health-care clinics. I would establish a review committee of influential participating doctors and change agents to discuss the system prior to development and during development in order to meet physician needs and requirements. The company will need to make sure that there is also an option for users that do not have Internet access. The goal of the system is to allow doctors to respond to minor health questions quickly and more efficiently.5 25 Copyright © 2012 Pearson Education. What steps would you recommend to this company to ensure the user acceptance of the system? Answer: The first step should be to conduct an organizational impact analysis. Inc. This will be a major procedural change. job function.