Chapter 7
Processes, Organizations, and Information Systems
True/False Questions
1) Both structured processes and dynamic processes are formally defined processes.
Answer: False
Rationale:
Structured processes are formally defined and standardized, while dynamic processes are
more flexible and adaptable, often lacking strict definitions or standardization.
2) Structured processes are standardized processes that involve day-to-day operations.
Answer: True
Rationale:
Structured processes are indeed standardized and typically involve routine, repetitive tasks
that are integral to day-to-day operations within an organization.
3) Placing an order is an example of a structured process.
Answer: True
Rationale:
Placing an order typically follows a predefined set of steps and rules, making it an example of
a structured process within the context of business operations.
4) Structured processes are adaptive processes that change structure rapidly and readily.
Answer: False
Rationale:
Structured processes are characterized by their standardization and lack of rapid adaptability.
They are designed to follow predetermined steps and do not change structure easily.
5) Dynamic processes are more specific.
Answer: False
Rationale:
Dynamic processes are characterized by their flexibility and adaptability, often encompassing
a broader range of activities and allowing for more variation compared to structured
processes.
6) Using social networking sites to generate buzz about a company's new product line is an
example of a dynamic process.
Answer: True
Rationale:
Generating buzz on social networking sites involves activities that can vary widely and may
need to adapt to changing circumstances or audience feedback, making it an example of a
dynamic process.
7) Dynamic processes support operational activities.
Answer: False
Rationale:
Dynamic processes are more often associated with strategic or innovative activities that
require flexibility and adaptability, rather than routine operational tasks.
8) A workgroup process exists to enable workgroups to fulfill the charter, purpose, and goals
of a particular group or department.
Answer: True
Rationale:
A workgroup process is designed to facilitate the collaboration and coordination of activities
within a specific workgroup or department to achieve its objectives and goals.
9) Lead generation and lead tracking are processes concerning the sales and marketing
department.
Answer: True
Rationale:
Lead generation and lead tracking are essential processes within the sales and marketing
department, involving activities related to identifying potential customers and managing their
interactions with the company.
10) Order and account tracking are business processes concerning the operations department.
Answer: False
Rationale:
Order and account tracking processes typically fall within the domain of sales, customer
service, or finance departments, rather than the operations department, which is more focused
on production and delivery of goods or services.
11) A workgroup information system is an organizational structure where a separate
department is established by the organization to support and manage its information system.
Answer: False
Rationale:
A workgroup information system refers to a system designed to support a specific workgroup
or department within an organization, rather than a separate department established solely for
managing information systems.
12) The procedures for using workgroup information systems need to be understood only by
the IT department of an organization.
Answer: False
Rationale:
Procedures for using workgroup information systems need to be understood by all users
within the workgroup or department, not just the IT department. Effective use of the system
requires collaboration and participation from all members of the workgroup.
13) Workgroup information systems typically support 10 to 100 users.
Answer: True
Rationale:
Workgroup information systems are designed to support small to medium-sized groups of
users, typically ranging from 10 to 100 individuals who collaborate on common tasks or
projects within a department or workgroup.
14) Enterprise processes span an organization and support activities in multiple departments.
Answer: True
Rationale:
Enterprise processes are cross-functional processes that span an entire organization,
supporting activities that involve multiple departments or functional areas within the
organization.
15) The solutions to problems in an enterprise system usually involve a single department of
the organization.
Answer: False
Rationale:
Solutions to problems in an enterprise system often require collaboration and coordination
between multiple departments or functional areas within the organization, as issues and
processes typically cut across departmental boundaries.
16) CRM is an example of a structured inter-enterprise information system.
Answer: False
Rationale:
Customer Relationship Management (CRM) systems are typically structured intraorganizational systems designed to manage interactions with current and potential customers,
rather than inter-enterprise systems that span multiple organizations.
17) In inter-enterprise information systems, procedures are simple and generally not
documented or formalized in any way.
Answer: False
Rationale:
In inter-enterprise information systems, procedures are typically complex and often require
formal documentation and standardization to ensure effective collaboration and
communication between multiple organizations.
18) Inter-enterprise information systems support one or more inter-enterprise processes.
Answer: True
Rationale:
Inter-enterprise information systems are designed to support processes that involve multiple
organizations, facilitating collaboration, data sharing, and communication across
organizational boundaries.
19) Process efficiency is a measure of the ratio of process outputs to inputs.
Answer: True
Rationale:
Process efficiency is indeed a measure of how well a process utilizes resources to produce
desired outputs, typically calculated as the ratio of outputs to inputs.
20) The structure of a process has no bearing on its efficiency.
Answer: False
Rationale:
The structure of a process, including its sequence of steps, workflow, and resource allocation,
can significantly impact its efficiency. Well-structured processes are often more efficient than
poorly designed ones, as they minimize waste and optimize resource utilization.
21) Adding process resources increases process effectiveness, but it adds costs.
Answer: True
Rationale:
Increasing process resources, such as adding more personnel or investing in better
technology, can indeed enhance process effectiveness by improving efficiency or quality.
However, it also adds costs associated with hiring, training, equipment, and maintenance.
22) Changing the structure of a process always involves a change in resources as well, even if
it is only a simple reordering of tasks.
Answer: False
Rationale:
While changing the structure of a process may sometimes involve reallocating resources,
such as redistributing tasks among existing personnel, it does not necessarily require
additional resources. Simple reordering of tasks within a process may not require any changes
in resources.
23) Information systems improve process quality by augmenting the actions of the human
who performs that activity.
Answer: True
Rationale:
Information systems can enhance process quality by automating routine tasks, providing realtime feedback and decision support, reducing errors, and improving information accuracy, all
of which augment the actions of human users and contribute to overall process effectiveness.
24) An information silo is a condition that exists when data are isolated in separated
information systems.
Answer: True
Rationale:
An information silo refers to a situation where data are isolated or compartmentalized within
separate systems or departments, hindering communication, collaboration, and data sharing
across the organization.
25) Workgroups can develop information systems for their own needs, but, over time, they
would result in information silos.
Answer: True
Rationale:
Workgroups or departments developing their own information systems without considering
integration with other parts of the organization can lead to the creation of information silos,
as data become isolated within these systems, making it difficult to share information across
the organization.
26) The problems of duplicated data, disjointed systems, limited information, and
inefficiencies are solved by spreading the data across multiple databases.
Answer: False
Rationale:
Spreading data across multiple databases exacerbates the problems of duplicated data,
disjointed systems, and limited information. It can lead to data redundancy, inconsistencies,
and difficulties in data integration, exacerbating inefficiencies rather than solving them.
27) Business process reengineering is the activity of altering and designing business
processes to take advantage of new information systems.
Answer: True
Rationale:
Business process reengineering involves redesigning business processes from scratch to
achieve dramatic improvements in performance, often leveraging new information systems
and technologies to streamline operations, improve efficiency, and enhance customer
satisfaction.
28) Business process reengineering is a quick process, but it is exceedingly expensive.
Answer: False
Rationale:
Business process reengineering is often a complex and time-consuming undertaking that
requires significant investment of time, resources, and effort. While it can lead to substantial
improvements in business performance, it may not always be quick, and its cost-effectiveness
depends on various factors such as the scope of changes and the organization's ability to
implement them efficiently.
29) In the customer acquisition phase of the customer life cycle, an organization categorizes
its customers according to value and attempts to win back high-value customers.
Answer: False
Rationale:
In the customer acquisition phase, an organization focuses on attracting and acquiring new
customers, rather than categorizing and attempting to win back existing customers. Customer
categorization and retention efforts typically occur in later phases of the customer life cycle,
such as retention and loyalty.
30) Relationship management processes increase the value of existing customers by selling
them more product.
Answer: True
Rationale:
Relationship management processes focus on building and maintaining strong relationships
with existing customers, understanding their needs and preferences, and providing
personalized offerings and services to increase customer satisfaction and loyalty. Selling
more products to existing customers is a common objective of relationship management
efforts, as it helps maximize customer lifetime value.
31) CRM systems incorporate accounting, manufacturing, inventory, and human resources
applications.
Answer: False
Rationale:
CRM (Customer Relationship Management) systems focus primarily on managing customer
interactions and relationships, such as sales, marketing, and customer service activities. They
typically do not include modules for accounting, manufacturing, inventory, or human
resources.
32) The primary purpose of an ERP system is integration.
Answer: True
Rationale:
The primary purpose of an ERP (Enterprise Resource Planning) system is to integrate various
business functions and processes across an organization into a single, unified system,
allowing for improved coordination, efficiency, and decision-making.
33) Enterprise application integration is a suite of applications, a database, and a set of
inherent processes for consolidating business operations into a single, consistent, computing
platform.
Answer: False
Rationale:
Enterprise application integration (EAI) refers to the process of integrating disparate
applications and systems within an organization to enable seamless data exchange and
business process automation. It typically involves middleware technologies and integration
tools rather than a suite of applications or databases.
34) Converting to an ERP system is not nearly as disruptive as converting to an EAI system.
Answer: False
Rationale:
Converting to an ERP system can be highly disruptive to an organization due to the need to
reengineer business processes, train employees, and migrate data from legacy systems.
However, converting to an EAI system may also be disruptive, as it involves integrating and
coordinating existing applications and systems, which can be complex and challenging.
35) An ERP solution consists of application programs, databases, and business process
procedures, but does not contain training and consulting.
Answer: False
Rationale:
An ERP solution typically includes not only application programs, databases, and business
process procedures but also training, consulting, and support services to help organizations
implement and utilize the system effectively.
36) Choosing an ERP solution that has applications that function close to the organization's
requirements is critical to its successful implementation.
Answer: True
Rationale:
Selecting an ERP solution that aligns closely with an organization's business requirements
and processes is essential for successful implementation. Customization may be necessary,
but minimizing the need for extensive modifications can help reduce implementation time,
cost, and complexity.
37) An ERP solution includes a database design as well as initial configuration data.
Answer: True
Rationale:
An ERP solution typically includes a database design tailored to the organization's needs,
along with initial configuration data that defines system settings, master data, and other
parameters required for system operation.
38) A trigger is a computer program stored in a database that is used to enforce business rules.
Answer: False
Rationale:
A trigger is indeed a computer program stored in a database, but its primary function is to
automatically execute a predefined action in response to a specific event or condition, rather
than enforcing business rules directly. Business rules may be enforced through triggers, but
they are not the sole purpose of triggers.
39) Triggers and stored procedures are not components of an ERP solution.
Answer: False
Rationale:
Triggers and stored procedures are commonly used components of ERP solutions to enforce
business rules, automate tasks, and manage data consistency and integrity within the system.
40) The inherent processes that are defined in an ERP solution are known as process
blueprints.
Answer: True
Rationale:
In ERP terminology, inherent processes refer to standard, pre-defined business processes that
are built into the ERP system based on industry best practices. These processes serve as
templates or blueprints for configuring and implementing the ERP solution within an
organization.
41) ERP vendors sometimes train an organization's employees to become in-house trainers in
training sessions called train the trainer.
Answer: True
Rationale:
Train the trainer sessions are common in ERP implementations, where vendor experts train
selected employees within the organization to become in-house trainers. These in-house
trainers then cascade their knowledge to other employees, facilitating widespread adoption
and ongoing training.
42) Industry-specific solutions contain program and database configuration files, but not the
process blueprints that apply to ERP implementations in specific industries.
Answer: False
Rationale:
Industry-specific solutions not only contain program and database configuration files but also
incorporate process blueprints tailored to specific industries. These blueprints define best
practices and standard processes relevant to the particular industry, facilitating more efficient
ERP implementations.
43) Epicor and Microsoft Dynamics are the highest ranked ERP vendors in the market.
Answer: False
Rationale:
ERP vendor rankings can vary depending on various factors such as industry focus,
geographic presence, and customer satisfaction. While Epicor and Microsoft Dynamics are
prominent ERP vendors, there is no single ranking that universally places them as the
highest-ranked vendors.
44) In enterprise systems, a single department manager is in charge.
Answer: False
Rationale:
Enterprise systems typically involve multiple departments and stakeholders, each with their
own managers and responsibilities. Collaboration and coordination across departments are
essential for the successful implementation and operation of enterprise systems.
45) Gap identification is a major task when implementing enterprise systems.
Answer: True
Rationale:
Gap identification involves identifying discrepancies between an organization's existing
processes and the capabilities offered by the chosen enterprise system. This task is crucial
during ERP implementation to ensure that the system meets the organization's requirements
and to plan for necessary customizations or process changes.
46) Transitioning to a new enterprise system requires careful planning and substantial
training.
Answer: True
Rationale:
Transitioning to a new enterprise system involves significant organizational change,
including process reengineering, data migration, and user training. Careful planning and
extensive training are essential to minimize disruption and ensure successful adoption of the
new system.
47) Service-oriented architecture is a software design philosophy in which activities are
organized into modules of functionality that are requested and delivered over the Internet
using process-oriented architecture standards.
Answer: False
Rationale:
Service-oriented architecture (SOA) is a software design approach in which software
components (services) are loosely coupled and can be accessed and reused independently. It
focuses on creating modular, interoperable services that can be combined to fulfill business
processes, but it does not specifically rely on process-oriented architecture standards.
48) A service provider creates a service description and publishes it using a standardized
language called HyperText Markup Language (HTML).
Answer: False
Rationale:
Service descriptions are typically created using standardized languages such as Web Services
Description Language (WSDL) or OpenAPI (formerly known as Swagger), which provide a
structured way to define the interface and functionality of a service. HTML is primarily used
for creating web pages and does not serve the same purpose as service description languages.
49) Standards such as http, https, html5, CSS3, JavaScript, and others enable programs to
receive data from, and display data to, a variety of mobile and desktop devices.
Answer: True
Rationale:
Standards such as HTTP (Hypertext Transfer Protocol), HTTPS (HTTP Secure), HTML5
(Hypertext Markup Language version 5), CSS3 (Cascading Style Sheets version 3), and
JavaScript enable interoperability and compatibility across different devices and platforms,
allowing programs to communicate with servers and display content effectively on various
devices.
50) The number of ERP solutions moving to the cloud is expected to increase because of its
low costs.
Answer: True
Rationale:
The adoption of cloud-based ERP solutions is increasing due to benefits such as lower
upfront costs, scalability, accessibility, and reduced maintenance overhead. As cloud
technologies mature and organizations seek cost-effective and flexible solutions, more ERP
vendors are offering cloud-based deployment options to meet market demand.
Multiple Choice Questions
1) ________ are formally defined, standardized processes that involve day-to-day operations.
A) Dynamic processes
B) Unstructured processes
C) Structured processes
D) Kinetic processes
Answer: C
Rationale:
Structured processes are characterized by their formal definition and standardization, making
them well-suited for routine, day-to-day operations within an organization. These processes
follow predefined steps and rules to achieve consistent outcomes.
2) Which of the following is an example of a structured process?
A) deciding on the location of a new store
B) solving the problem of excessive product returns
C) purchasing raw materials
D) using social media to create buzz about a new product
Answer: C
Rationale:
Purchasing raw materials involves a series of standardized steps and procedures, such as
supplier selection, order placement, and inventory management, making it an example of a
structured process within an organization.
3) ________ are flexible, informal, and adaptive processes that normally involve strategic
and less specific managerial decisions and activities.
A) Operational processes
B) Dynamic processes
C) Inherent processes
D) Structured processes
Answer: B
Rationale:
Dynamic processes are characterized by their flexibility and adaptability, allowing them to
accommodate strategic decisions and managerial activities that may not have well-defined or
standardized procedures. These processes are more fluid and responsive to changing
circumstances.
4) Which of the following is an example of a dynamic process?
A) Samsung accepts a return of a defective television from its dealer.
B) Starbucks places an order for coffee beans from its local supplier.
C) Amazon.com hires customer service representatives to help customers with their online
order.
D) Nike uses Facebook and Twitter to generate buzz about its new line of running shoes.
Answer: D
Rationale:
Nike using social media platforms like Facebook and Twitter to create buzz about its new line
of running shoes exemplifies a dynamic process. This activity involves strategic decisions
and adaptive actions to engage with customers and generate interest in the product, rather
than following standardized procedures.
5) Which of the following is a characteristic of dynamic processes?
A) They are adaptive processes that change structure rapidly and readily.
B) They are usually formally defined and documented.
C) They support operational and managerial decisions and activities.
D) They are standardized processes.
Answer: A
Rationale:
Dynamic processes are characterized by their adaptability and ability to change structure
rapidly in response to evolving circumstances. Unlike structured processes, they are not
bound by rigid rules or predefined steps, allowing for flexibility in decision-making and
execution.
6) Which of the following workgroup processes is related to sales and marketing?
A) lead tracking
B) order management
C) customer support
D) accounts receivable
Answer: A
Rationale:
Lead tracking involves monitoring and managing potential sales leads or prospects, making it
directly related to sales and marketing efforts within an organization.
7) Which of the following workgroup processes is related to operations?
A) account tracking
B) sales forecasting
C) finished-goods inventory management
D) treasury management
Answer: C
Rationale:
Finished-goods inventory management is a core operational process that involves monitoring
and controlling the inventory of finished products, ensuring availability to meet customer
demand while minimizing excess stock.
8) Which of the following workgroup processes is related to manufacturing?
A) order entry and tracking
B) finished-goods inventory management
C) product and brand management
D) planning and scheduling
Answer: D
Rationale:
Planning and scheduling processes in manufacturing involve coordinating production
activities, allocating resources, and determining optimal production schedules to meet
demand efficiently.
9) Which of the following workgroup processes is related to customer service?
A) assessment
B) account tracking
C) sales forecasting
D) accounts payable
Answer: B
Rationale:
Account tracking in the context of customer service typically involves monitoring and
managing customer accounts, tracking interactions, purchases, and inquiries to ensure prompt
and effective customer service delivery.
10) Which of the following workgroup processes is related to human resources?
A) lead tracking
B) customer support
C) assessment
D) order management
Answer: C
Rationale:
Assessment processes in human resources involve evaluating employee performance, skills,
and development needs, facilitating decisions related to hiring, training, and career
advancement within the organization.
11) Which of the following information systems minimizes data duplication among
departments?
A) departmental information systems
B) workgroup information systems
C) personal information systems
D) enterprise information systems
Answer: D
Rationale:
Enterprise information systems are designed to integrate and centralize data across various
departments within an organization, thereby minimizing data duplication. By providing a
unified database and standardized processes, enterprise systems ensure consistency and
accuracy of information across the organization.
12) Which of the following statements is true regarding workgroup information systems?
A) They are easy to change.
B) They minimize data duplication among departments.
C) They can be operated without training.
D) They support 10 to 100 users.
Answer: D
Rationale:
Workgroup information systems typically support a small group of users, typically ranging
from 10 to 100 users. While they facilitate collaboration and communication within
workgroups, they may not necessarily minimize data duplication among departments, as they
are focused on specific functional areas rather than integrating data across the organization.
13) ________ processes span an organization and support activities in multiple departments.
A) Enterprise
B) Interenterprise
C) Strategic
D) Reactive
Answer: A
Rationale:
Enterprise processes are those that span an organization and support activities across multiple
departments. These processes are essential for coordinating and integrating various functions
within the organization to achieve strategic objectives and enhance overall efficiency.
14) Which of the following statements about enterprise information systems is true?
A) The procedures are not documented, but are understood within the group.
B) They do not require users to have any formal training.
C) They are very difficult to change.
D) They support 10 to 100 users.
Answer: C
Rationale:
Enterprise information systems are complex and typically involve extensive documentation
of procedures and processes. Due to their comprehensive nature and integration with
organizational functions, they can be challenging and costly to change or modify, requiring
careful planning and implementation.
15) The information system that a restaurant uses to order supplies and ingredients from its
suppliers is an example of a(n) ________.
A) enterprise information system
B) personal information system
C) inter-enterprise information system
D) departmental information system
Answer: C
Rationale:
An inter-enterprise information system facilitates communication and transactions between
different organizations or entities. In the case of a restaurant ordering supplies from suppliers,
the system involves interactions between the restaurant and its external suppliers, making it
an inter-enterprise information system.
16) Which of the following statements about a structured inter-enterprise information system
is true?
A) Its procedures are formalized and the problem solutions affect multiple organizations.
B) It is flexible and easily adaptable to organizational changes.
C) It increases data duplication among departments.
D) It does not require users to have any formal training.
Answer: A
Rationale:
A structured inter-enterprise information system involves formalized procedures and
processes that facilitate interactions and transactions between multiple organizations. These
systems are designed to streamline operations and data exchange across organizational
boundaries while ensuring consistency and compliance with standards and regulations.
17) ________ is an example of an inter-enterprise information system.
A) CRM
B) PRIDE
C) ERP
D) EAI
Answer: B
Rationale:
PRIDE (Process Re-engineering Information Systems Development) is an example of an
inter-enterprise information system. It focuses on re-engineering business processes and
integrating information systems across multiple organizations to achieve strategic objectives
and improve efficiency.
18) The two dimensions of process quality are ________.
A) efficiency and effectiveness
B) performance and reliability
C) conformance and durability
D) perception and serviceability
Answer: A
Rationale:
Process quality is typically assessed based on two dimensions: efficiency, which measures the
ratio of process outputs to inputs, and effectiveness, which evaluates how well a process
achieves its intended objectives and organizational strategy.
19) ________ is a measure of the ratio of process outputs to inputs.
A) Process effectiveness
B) Process efficiency
C) Process conformance
D) Process reliability
Answer: B
Rationale:
Process efficiency is a measure of how well a process utilizes resources to produce desired
outputs, often expressed as the ratio of outputs to inputs. It reflects the ability of a process to
achieve its objectives with minimal waste or resource utilization.
20) Process ________ is a measure of how well a process achieves organizational strategy.
A) efficiency
B) conformance
C) effectiveness
D) reliability
Answer: C
Rationale:
Process effectiveness evaluates the extent to which a process aligns with organizational
strategy and contributes to achieving overall objectives and goals. It focuses on the outcomes
and impact of the process on the organization's success and performance.
21) Information systems improve process quality by ________.
A) duplicating data
B) entirely replacing human activity
C) changing the work culture
D) controlling process flow
Answer: D
Rationale:
Information systems improve process quality by controlling process flow, ensuring that tasks
are executed efficiently and effectively according to predefined procedures and standards. By
managing and optimizing the flow of information and activities, information systems
contribute to streamlining processes and enhancing overall quality.
22) Which of the following conditions exists when data are isolated in separated information
systems?
A) information overload
B) encapsulation
C) information silo
D) data segregation
Answer: C
Rationale:
An information silo occurs when data are isolated and stored in separate systems or
departments within an organization, leading to limited data sharing and integration. This can
result in inefficiencies, redundancy, and inconsistencies in data management and decisionmaking processes.
23) When an organization has inconsistent duplicated data, it is said to have a problem of
________.
A) blind spot
B) data integrity
C) error of omission
D) bottleneck
Answer: B
Rationale:
Inconsistent duplicated data pose a problem of data integrity within an organization. Data
integrity refers to the accuracy, consistency, and reliability of data throughout its lifecycle.
Inconsistencies in duplicated data can lead to errors, discrepancies, and mistrust in the
information being used for decision-making.
24) Information silos are not a problem until they begin to ________.
A) rely on service-oriented architecture
B) integrate data
C) revise business processes
D) use and store data inconsistently across separate databases
Answer: D
Rationale:
Information silos become problematic when they begin to use and store data inconsistently
across separate databases or systems. This inconsistency hampers data integration efforts and
leads to fragmented information, making it difficult to obtain a comprehensive view of
operations and make informed decisions.
25) ________ is the activity of altering and designing business processes to take advantage of
new information systems.
A) Business process modeling
B) Business process reengineering
C) Business process outsourcing
D) Enterprise resource planning
Answer: B
Rationale:
Business process reengineering involves the analysis, redesign, and optimization of existing
business processes to leverage the capabilities of new information systems. It aims to enhance
organizational performance, efficiency, and competitiveness by aligning processes with
strategic objectives and leveraging technological advancements.
26) ________ are predesigned procedures for using software products.
A) Inherent processes
B) Triggers
C) Modules
D) Service descriptions
Answer: A
Rationale:
Inherent processes are predefined procedures or workflows embedded within software
applications to guide users in performing specific tasks or activities. These processes are
designed to streamline operations and ensure consistency in how software products are used
and configured.
27) ________ is a suite of applications, a database, and a set of inherent processes for
managing all the interactions with the customer, from lead generation to customer service.
A) Business process reengineering
B) Customer relationship management
C) Enterprise resource planning
D) Customer lifecycle management
Answer: B
Rationale:
Customer relationship management (CRM) is a comprehensive approach to managing
interactions and relationships with customers throughout the entire customer lifecycle, from
lead generation to post-sales support. It involves the use of software applications, databases,
and predefined processes to optimize customer interactions and enhance customer
satisfaction.
28) Which phase of the customer life cycle focuses on sending messages to the target market
to attract customer prospects?
A) relationship management
B) loss/churn
C) marketing
D) customer acquisition
Answer: C
Rationale:
The marketing phase of the customer life cycle focuses on sending messages and promotional
activities to the target market to attract potential customers and generate leads. It involves
various marketing strategies and campaigns aimed at increasing brand awareness and
attracting customer prospects.
29) Which phase of the customer life cycle focuses on increasing the value of existing
customers by selling them more product?
A) marketing
B) customer acquisition
C) relationship management
D) loss/churn
Answer: C
Rationale:
The relationship management phase of the customer life cycle focuses on nurturing and
maintaining relationships with existing customers to increase their value. It involves activities
such as cross-selling, upselling, and providing personalized services to enhance customer
satisfaction and loyalty.
30) Which phase of the customer life cycle categorizes customers according to value and
attempts to win back high-value customers?
A) loss/churn
B) customer acquisition
C) relationship management
D) marketing
Answer: A
Rationale:
The loss/churn phase of the customer life cycle involves identifying and categorizing
customers who have disengaged or churned from the business and implementing strategies to
win them back, particularly high-value customers. It focuses on retaining customers and
minimizing customer attrition to maintain business profitability and growth.
31) ________ is a suite of applications called modules, a database, and a set of inherent
processes for consolidating business operations into a single, consistent, computing platform.
A) Enterprise resource planning
B) Customer relationship management
C) Enterprise application integration
D) Business process reengineering
Answer: A
Rationale:
Enterprise resource planning (ERP) systems are comprehensive software solutions that
integrate various business functions and processes across an organization. They typically
consist of modular applications, a centralized database, and predefined processes aimed at
streamlining operations and ensuring consistency in data and workflows.
32) The primary purpose of an ERP system is ________.
A) customization
B) duplication
C) integration
D) customer acquisition
Answer: C
Rationale:
The primary purpose of an ERP system is integration. ERP systems are designed to integrate
and streamline business processes across different departments and functions within an
organization. They aim to consolidate disparate systems and data into a single, unified
platform to improve efficiency, visibility, and decision-making.
33) Enterprise application integration is ________.
A) a suite of software applications that consolidates existing systems by providing layers of
software that connect applications together
B) a strategy that uses business process management to radically enhance the customer
service experience from any customer touchpoint
C) a suite of applications called modules, a database, and a set of inherent processes for
consolidating business operations into a single, consistent, computing platform
D) a suite of applications, a database, and a set of inherent processes for managing all the
interactions with the customer, from lead generation to customer service
Answer: A
Rationale:
Enterprise application integration (EAI) involves the integration of various software
applications and systems within an organization to enable seamless data sharing and
communication. It typically involves layers of software that connect disparate systems and
facilitate the exchange of information to improve business processes and decision-making.
34) Which of the following statements is true of enterprise application integration?
A) It leads to data duplication because each application has its own database.
B) It connects system "islands" via a new layer of software.
C) It leverages existing systems, and enhances the capabilities of functional applications.
D) It prevents existing applications from communicating and sharing data.
Answer: B
Rationale:
The statement "It connects system 'islands' via a new layer of software" is true of enterprise
application integration (EAI). EAI solutions bridge the gap between disparate systems or
"islands" of data by introducing middleware or integration layers that facilitate
communication and data exchange between these systems.
35) The major benefit of enterprise application integration is that it ________.
A) minimizes the requirement for formalized procedures
B) acts as a cost-effective alternative to ERP, with greater capabilities
C) utilizes a centralized database
D) enables organizations to use existing applications
Answer: D
Rationale:
The major benefit of enterprise application integration (EAI) is that it enables organizations
to use existing applications while integrating them to improve interoperability and data
sharing. EAI solutions help organizations leverage their investment in legacy systems by
enabling seamless communication and collaboration across disparate applications.
36) An ERP solution does not include ________.
A) a database design
B) a company's operational data
C) initial configuration data
D) stored procedures
Answer: B
Rationale:
An ERP solution typically includes a database design, initial configuration data, and stored
procedures. However, it does not include a company's operational data, as this data is specific
to each organization and is populated into the ERP system during implementation and
ongoing usage.
37) A(n) ________ is a computer program stored within a database that runs to keep the
database consistent when certain conditions arise.
A) stored procedure
B) index
C) trigger
D) transaction
Answer: C
Rationale:
A trigger is a computer program stored within a database that runs automatically when certain
conditions or events occur. Triggers are used to enforce data integrity, maintain consistency,
and automate actions within the database environment based on predefined rules or criteria.
38) A stored procedure is a ________.
A) program stored in a database that keeps the database consistent when certain conditions
arise
B) history of actions executed by a database management system
C) computer program stored in a database that is used to enforce business rules
D) data structure that improves the speed of data-retrieval operations in a database
Answer: C
Rationale:
A stored procedure is a precompiled and stored set of SQL statements or procedural code
within a database management system. It is used to enforce business rules, perform complex
calculations, or execute specific tasks within the database environment.
39) The inherent processes defined in an ERP solution are known as ________.
A) database transactions
B) stored procedures
C) transaction logs
D) process blueprints
Answer: D
Rationale:
The inherent processes defined in an ERP solution are known as process blueprints. These are
predefined workflows or procedures embedded within the ERP system to guide users in
performing various business functions and activities. Process blueprints help standardize
operations and ensure consistency across different departments and functions.
40) ERP vendors train an organization's employees, called Super Users, to become in-house
ERP trainers in training sessions called ________.
A) train the trainer
B) top-down training
C) on-the-job training
D) vestibule training
Answer: A
Rationale:
ERP vendors often conduct training sessions called "train the trainer," where they train
selected employees (Super Users) within the organization to become in-house ERP trainers.
These Super Users then impart their knowledge and expertise to other employees, facilitating
the broader adoption and usage of the ERP system within the organization.
41) ERP training falls into two broad categories, one of which is training on how to use the
ERP application software. Which of the following activities is a part of this category?
A) obtaining top-level management support
B) steps for using the applications to accomplish the activities in processes
C) dealing with employee resistance to the new system
D) preparing the organization for change
Answer: B
Rationale:
Training on how to use the ERP application software involves providing users with
instructions and guidance on navigating the ERP system and utilizing its features to perform
specific tasks and activities related to organizational processes. This training focuses on
familiarizing users with the functionalities of the ERP software and teaching them how to
effectively utilize it to accomplish their job responsibilities.
42) To reduce the substantial work that needs to be done to customize an ERP application to a
particular customer, ERP vendors provide ________.
A) service descriptions
B) industry-specific solutions
C) inherent processes
D) DIY modules
Answer: B
Rationale:
ERP vendors provide industry-specific solutions to reduce the effort required for customizing
ERP applications for individual customers. These solutions are preconfigured to meet the
needs of specific industries, such as manufacturing, healthcare, or retail. By offering industry-
specific solutions, ERP vendors can streamline the implementation process and provide
customers with tailored solutions that align more closely with their business requirements.
43) The top two ranked ERP vendors are ________.
A) Epicor and Oracle
B) Oracle and SAP
C) Microsoft Dynamics and Infor
D) Microsoft Dynamics and SAP
Answer: B
Rationale:
The top two ranked ERP vendors are Oracle and SAP. These vendors are widely recognized
for their comprehensive ERP solutions and their dominance in the enterprise software market.
Both Oracle and SAP offer a range of ERP products and services catering to organizations of
varying sizes and industries.
44) The four major ERP products of ________ are AX, Nav, GP, and Solomon.
A) Oracle
B) SAP
C) Microsoft Dynamics
D) Epicor
Answer: C
Rationale:
The four major ERP products of Microsoft Dynamics are AX (Dynamics AX), Nav
(Dynamics NAV), GP (Dynamics GP), and Solomon (Dynamics SL). Microsoft Dynamics is
a suite of ERP and CRM applications developed by Microsoft and designed to help
organizations automate and streamline their business processes.
45) ERP vendor Infor acquired which of the following ERP products?
A) Solomon
B) GP
C) Epicor 9
D) Baan
Answer: D
Rationale:
ERP vendor Infor acquired the Baan ERP product. Infor is known for acquiring and
consolidating various ERP solutions to expand its product portfolio and strengthen its
position in the enterprise software market. The acquisition of Baan allowed Infor to offer
additional ERP capabilities to its customers.
46) Which ERP vendor acquired PeopleSoft and Siebel?
A) Oracle
B) Infor
C) Epicor
D) SAP
Answer: A
Rationale:
Oracle acquired PeopleSoft and Siebel. Oracle is a leading provider of enterprise software
and acquired PeopleSoft, a prominent ERP vendor, and Siebel, a CRM software provider, to
expand its product offerings and market presence. The acquisitions helped Oracle strengthen
its position in the ERP and CRM markets.
47) When implementing new enterprise systems, usually the only solution for resolving
process issues and providing enterprise process management is ________.
A) develop committees and steering groups
B) reinforce employees' sense of self-efficacy
C) establish clear and absolute contractual guidelines
D) communicate the need for change to the employees
Answer: A
Rationale:
When implementing new enterprise systems, developing committees and steering groups is
often the only solution for resolving process issues and providing enterprise process
management. These committees and groups are responsible for overseeing the
implementation process, identifying and addressing process issues, and ensuring that the new
system aligns with organizational goals and objectives.
48) ________ is a major task when implementing enterprise systems.
A) Virtualization
B) Encapsulation
C) Gap identification
D) Data duplication
Answer: C
Rationale:
Gap identification is a major task when implementing enterprise systems. It involves
identifying discrepancies or gaps between existing business processes and the functionality
offered by the new system. By identifying these gaps, organizations can develop strategies to
address them and ensure a smoother implementation process.
49) Which of the following is an effective technique to overcome employee resistance when
implementing new enterprise systems?
A) giving employees ultimatums and deadlines
B) paying employees straight-out for transitioning to the new system
C) coercing employees to learn the new system
D) training employees on the successful use of the new system
Answer: D
Rationale:
Training employees on the successful use of the new system is an effective technique to
overcome employee resistance when implementing new enterprise systems. By providing
comprehensive training programs, organizations can empower employees with the knowledge
and skills needed to effectively use the new system, thereby reducing resistance and
increasing user adoption.
50) ________ refers to a person's belief that he or she can be successful at his or her job.
A) Self-appraisal
B) Self-actualization
C) Self-efficacy
D) Self-aggrandizement
Answer: C
Rationale:
Self-efficacy refers to a person's belief in their ability to successfully perform tasks and
accomplish goals in their job role. It is a crucial factor in determining individual motivation,
performance, and job satisfaction. Individuals with high self-efficacy are more likely to
approach tasks with confidence and persistence, leading to greater success in their endeavors.
51) Flexible communication among distributed applications is possible because of a set of
standards that support a design philosophy known as ________.
A) business process modeling notation
B) service oriented architecture
C) enterprise application integration
D) cloud computing
Answer: B
Rationale:
Service Oriented Architecture (SOA) is a design philosophy that enables flexible
communication among distributed applications by defining a set of standards for creating,
deploying, and integrating services. These standards allow services to be loosely coupled and
independently deployed, facilitating interoperability and flexibility in building complex
systems from reusable components.
52) Which of the following is true of SOA?
A) It enables the requesting and releasing of cloud resources.
B) It has no access to cloud storage.
C) It has access to cloud storage but it cannot enable the releasing of cloud resources.
D) It allows cloud-based applications to follow their own standard and structure.
Answer: A
Rationale:
SOA enables the requesting and releasing of cloud resources. SOA principles emphasize the
use of loosely coupled, interoperable services that can be accessed and invoked over a
network. This architectural approach supports the dynamic provisioning and consumption of
cloud resources, allowing applications to scale and adapt to changing demands.
53) ________ is one of the SOA protocols.
A) ISP
B) WND
C) OData
D) DLL
Answer: C
Rationale:
OData (Open Data Protocol) is one of the protocols commonly associated with Service
Oriented Architecture (SOA). OData is a standardized protocol for creating and consuming
data APIs (Application Programming Interfaces) over the web. It provides a uniform way to
expose and interact with data from various sources, making it suitable for building
interoperable and scalable service-oriented systems.
54) Organizations like Oracle and SAP find it difficult to move toward low-cost cloud
solutions as ________.
A) cloud solutions are inefficient
B) they think cloud solutions are likely to disappear by the next decade
C) the cloud system is inaccessible through the internet
D) they cannot walk away from the revenue of lucrative support contracts that they entail
Answer: D
Rationale:
Organizations like Oracle and SAP find it difficult to move toward low-cost cloud solutions
because they cannot walk away from the revenue of lucrative support contracts that they
entail. Traditional enterprise software vendors like Oracle and SAP derive a significant
portion of their revenue from support and maintenance contracts associated with on-premises
software deployments. Transitioning to low-cost cloud solutions may disrupt this revenue
stream and pose challenges to their existing business models.
Essay Questions
1) Define structured processes and list their characteristics.
Answer: Structured processes are formally defined, standardized processes that involve dayto-day operations: accepting a return, placing an order, purchasing raw materials, and so
forth.
Characteristics:
- Support operational and structured managerial decisions and activities
- Standardized
- Usually formally defined and documented
- Exceptions rare and not (well) tolerated
- Process structure changes slowly and with organizational agony
2) Define dynamic processes and list their characteristics.
Answer: Dynamic processes are flexible, informal, and adaptive processes that normally
involve strategic and less unstructured managerial decisions and activities. Deciding whether
to open a new store location or how best to solve the problem of excessive product returns are
examples, as is using Twitter to generate buzz about next season's product line.
Characteristics:
- Support strategic and less structured managerial decisions and activities
- Less specific, fluid
- Usually informal
- Exceptions frequent and expected
- Adaptive processes that change structure rapidly and readily
3) Define workgroup processes, enterprise processes, and inter-enterprise processes.
Answer: A workgroup process is a structured process that exists to enable workgroups to
fulfill the charter, purpose, and goals of a particular organizational unit. Enterprise processes
are structured processes that span an organization and support activities in multiple
departments. Inter-enterprise processes are structured processes that span two or more
independent organizations.
4) Define enterprise information systems and describe its characteristics.
Answer: Enterprise information systems are information systems that span an organization
and support activities in multiple departments. They typically have hundreds to thousands of
users. Procedures are formalized and extensively documented; users undergo formal
procedure training. The solutions to problems in an enterprise system usually involve more
than one department. Because enterprise systems span many departments and involve
potentially thousands of users, they are very difficult to change.
5) Describe inter-enterprise information systems.
Answer: Structured inter-enterprise information systems are information systems that support
inter-enterprise processes. Such systems typically involve thousands of users, and solutions to
problems require cooperation among different, usually independently owned, organizations.
Problems are resolved by meeting, by contract, and sometimes by litigation. Data are often
duplicated between organizations, but such duplication is either eliminated (as will be done
with PRIDE) or is carefully managed. Because of their wide span, complexity, and use by
multiple companies, such systems can be exceedingly difficult to change. Supply chain
management is a classic example of an inter-enterprise information system.
6) What are the two dimensions of process quality? How can organizations improve process
quality? How do information systems improve process quality?
Answer: The two dimensions of process quality are efficiency and effectiveness. Process
efficiency is a measure of the ratio of process outputs to inputs. Process effectiveness is a
measure of how well a process achieves organizational strategy.
Organizations can improve the quality (efficiency and/or effectiveness) of a process in one of
three ways:
- Change the process structure
- Change the process resources
- Change both
Information systems can be used to improve process quality by:
- Performing an activity
- Augmenting a human who is performing an activity
- Controlling process flow
7) List the problems associated with information silos.
Answer: The problems associated with information silos include:
- Data duplication and data inconsistency
- Disjointed processes
- Limited information and lack of integrated information
- Organizational inefficiency
- Increased expense
8) What is the fundamental problem of information silos? How can this problem be
remedied?
Answer: The fundamental problem of information silos is that data are duplicated in isolated
systems. The most obvious fix is to integrate the data into a single database and revise
applications (and business processes) to use that database. Another remedy is to allow the
isolation, but to manage it to avoid problems.
9) What are the four phases of the customer life cycle? Briefly describe each phase.
Answer: The four phases of the customer life cycle include: marketing, customer acquisition,
relationship management, and loss/churn. Marketing sends messages to the target market to
attract customer prospects. When prospects order, they become customers who need to be
supported. Additionally, relationship management processes increase the value of existing
customers by selling them more product. Inevitably, over time the organization loses
customers. When this occurs, win-back processes categorize customers according to value
and attempt to win back high-value customers.
10) Define ERP. What is the primary purpose of an ERP system?
Answer: Enterprise resource planning (ERP) is a suite of applications called modules, a
database, and a set of inherent processes for consolidating business operations into a single,
consistent, computing platform. An ERP system is an information system based on ERP
technology. The primary purpose of an ERP system is integration; an ERP system allows the
left hand of the organization to know what the right hand is doing. This integration allows
real-time updates globally, whenever and wherever a transaction takes place. Critical business
decisions can then be made on a timely basis using the latest data.
11) List the functions of enterprise application integration (EAI).
Answer: The functions of EAI are as follows:
- It connects system "islands" via a new layer of software/system.
- It enables existing applications to communicate and share data.
- It provides integrated information.
- It leverages existing systems-leaving functional applications as is, but providing an
integration layer over the top.
- It enables a gradual move to ERP.
12) Explain the nature of the database component of an ERP solution.
Answer: An ERP solution includes a database design as well as initial configuration data. It
does not, of course, contain the company's operational data. During development, the team
must enter the initial values for that data as part of the development effort. SAP, the leading
vendor of ERP solutions, provides ERP databases that contain over 15,000 tables. The design
includes the metadata for those tables, as well as their relationships to each other, and rules
and constraints about how the data in some tables must relate to data in other tables. The ERP
solution also contains tables filled with initial configuration data.
Large organizational databases contain two types of program code. The first, called a trigger,
is a computer program stored within the database that runs to keep the database consistent
when certain conditions arise. The second, called a stored procedure, is a computer program
stored in the database that is used to enforce business rules. An example of such a rule would
be never to sell certain items at a discount. Triggers and stored procedures are also part of the
ERP solution. Much of this program code needs to be configured during the ERP
implementation as well.
13) Describe the two categories of ERP training.
Answer: ERP vendors have developed training curricula and classes because of the
complexity and difficulty of implementing and using ERP solutions. ERP training falls into
two broad categories. The first category is training about how to implement the ERP solution.
This training includes topics such as obtaining top-level management support, preparing the
organization for change, and dealing with the inevitable resistance that develops when people
are asked to perform work in new ways. The second category is training on how to use the
ERP application software.
14) What are the four challenges of implementing new enterprise systems?
Answer: The four primary challenges or factors affecting implementation of enterprise
systems:
- Collaborative management
- Requirements gaps
- Transition problems
- Employee resistance
15) How should organizations manage employee resistance to change, in the context of new
enterprise systems?
Answer: First, senior-level management needs to communicate the need for the change to the
organization, and reiterate this, as necessary, throughout the transition process. Second,
employees fear change because it threatens self-efficacy, which is a person's belief that he or
she can be successful at his or her job. To enhance confidence, employees need to be trained
and coached on the successful use of the new system. Word-of-mouth is a very powerful
factor, and in some cases, key users are trained ahead of time to create positive buzz about the
new system. Video demonstrations of employees successfully using the new system are also
effective. Third, employees may need to be given extra inducement to change to the new
system. Implementing new enterprise systems can solve many problems and bring great
efficiency and cost savings to an organization, but it is not for the faint of heart.
16) What is SOA? Define encapsulation, Web service, and service description.
Answer: Service-oriented architecture (SOA) is a software design philosophy in which
activities are organized into modules of functionality called Web services that are requested
and delivered over the Internet using SOA standards.
The production of the service is encapsulated. This means that the methodology and location
of the service is private. Users of the service do not know how or where the service is
performed, and they need not know.
A Web service is an encapsulated software service provided over the Internet using standard
protocols.
A service provider creates a service description, which documents how to use the service, and
publishes that description using a standardized language called Web Service Description
Language (WSDL).
Test Bank for Using MIS
David M. Kroenke
9780133029673, 9780135191767, 9780134106786, 9780138132484, 9780136100751, 9780134606996
