Chapter 11
Chapter 11
2) Which of the following statements is TRUE of the information systems (IS) department?
A) If the IS primarily support accounting and finance activities, the chief financial officer (CFO)
is appointed as the chief information officer (CIO).
B) Programs used in all information systems are developed in-house by the maintenance group.
C) The operations group monitors user experience and responds to user problems.
D) Data administration is performed exclusively by the outsourcing relations group.
E) Data backup is performed primarily by the marketing group.
Answer: C
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
3) Thompson is the chief information officer at a processed food manufacturing company. The
information systems used in the company are manufacturing oriented and provide little support
to accounting. In this case, Thompson will most likely report to the ________ of the company.
A) chief financial officer
B) chief executive officer
C) director of information services
D) chief technology officer
E) chief information security officer
Answer: B
Diff: 2
AACSB: Reflective Thinking
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Application
1
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4) Which of the following is a responsibility of a chief information officer (CIO)?
A) serving as the principal manager of the IS department
B) heading the technology group
C) evaluating new technologies that are relevant to the organization
D) developing processes and information systems (IS) that implement business strategy
E) overseeing the Chief Security Officer (CSO)
Answer: A
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
2
Copyright © 2018 Pearson Education, Inc.
7) Which of the following statements is TRUE of the operations group in an organization's
information system (IS) department?
A) It establishes data standards and data management practices and policies.
B) It monitors the user experience and responds to their problems.
C) It manages all computing infrastructure except in-house server farms and communications
media.
D) It includes technical writers if the programs are developed in-house.
E) It manages all outsourcing.
Answer: B
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
8) In the information system (IS) department, the ________ group exists in organizations that
have negotiated outsourcing agreements with other companies to provide equipment,
applications, or other services.
A) operations
B) technology
C) development
D) outsourcing relations
E) networking
Answer: D
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
9) In the information system (IS) department, the ________ group manages the process of
creating new information systems as well as maintaining existing information systems.
A) operations
B) technology
C) development
D) outsourcing relations
E) networking
Answer: C
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
3
Copyright © 2018 Pearson Education, Inc.
10) If an organization does not develop programs in-house, then the development group of the
information system (IS) department will be staffed primarily by ________ who work with users,
operations, and vendors to acquire and install licensed software and to set up the system
components around that software.
A) programmers and development personnel
B) PQA test engineers
C) business and systems analysts
D) technical writers
E) penetration testers
Answer: C
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
11) The purpose of a ________ group is to protect data and information assets by establishing
data standards and data management practices and policies.
A) data administration
B) data warehousing
C) data mining
D) data communication
E) data auditors
Answer: A
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
12) A ________ works with users to determine system requirements, designs and develops job
descriptions and procedures, and helps determine test plans.
A) systems analyst
B) business analyst
C) user support representative
D) network administrator
E) server administrator
Answer: A
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
4
Copyright © 2018 Pearson Education, Inc.
13) A ________ manages security for all of the organization's assets: physical plant and
equipment, employees, intellectual property, and digital.
A) systems analyst
B) chief information security officer
C) chief security officer
D) network administrator
E) server administrator
Answer: C
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
14) A ________ manages security for the organization's information systems and information.
A) systems analyst
B) chief information security officer
C) chief security officer
D) network administrator
E) server administrator
Answer: B
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
15) Jamie's company manufactures 3D printers, and his job is to prepare user manuals for the
products. Jamie also prepares training material for the workers who are involved in the
manufacturing process. With reference to his job profile, Jamie is a ________.
A) systems analyst
B) consultant
C) programmer
D) technical writer
E) server administrator
Answer: D
Diff: 3
AACSB: Reflective Thinking
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Application
5
Copyright © 2018 Pearson Education, Inc.
16) The responsibilities of a tech support engineer include ________.
A) helping users solve problems and providing training
B) managing and protecting databases
C) writing program documentation
D) advising the chief information officer on emerging technologies
E) design and write computer programs
Answer: A
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
18) The responsibilities of a person in the ________ group include selling software, network,
communications, and consulting services.
A) systems analyst
B) consultant
C) programmer
D) technical sales
E) server administrator
Answer: D
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
6
Copyright © 2018 Pearson Education, Inc.
19) The responsibilities of a ________ include collaborating with cross-functional teams on
projects and analyzing organizational data.
A) systems analyst
B) consultant
C) business intelligence analyst
D) technical sales
E) server administrator
Answer: C
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
20) The responsibilities of a ________ include advising the chief information officer, executive
group, and project managers on emerging technologies.
A) technical writer
B) chief financial officer
C) systems analyst
D) chief technology officer
E) programmer
Answer: D
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
21) Which of the following statements is TRUE about a data administration staff function?
A) The chief technology officer (CTO) heads the data administration staff function.
B) The group establishes standards to protect information assets.
C) This group includes system and network administrators exclusively.
D) This group manages the process of creating new information systems.
E) This is a subgroup under technical sales.
Answer: B
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
7
Copyright © 2018 Pearson Education, Inc.
22) One of the major functions of the information systems (IS) department is to develop, operate,
and maintain applications.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
23) The structure of the information systems (IS) department remains constant across
organizations.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
24) In all companies, the chief information officer (CIO) reports directly to the chief financial
officer.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
25) The chief technology officer (CTO) manages the IS security program, protects the
organization's information systems and information, and manages IS security personnel.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
26) If an organization does not develop programs in-house, then the development group of the
information systems (IS) department will include programmers, test engineers, and technical
writers.
Answer: FALSE
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
8
Copyright © 2018 Pearson Education, Inc.
27) The purpose of the data administration group is to protect data and information assets by
establishing data standards and data management practices and policies.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
28) The terms "information systems" and "information technology" can be used interchangeably.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
29) Information technology (IT) must be placed into the structure of information systems (IS)
before an organization can use it.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
30) With the exception of systems analysts, all the major job positions in the information systems
(IS) industry require business knowledge.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
31) In the information systems (IS) industry, a business analyst works with business leaders to
develop systems that implement business strategy and goals.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
9
Copyright © 2018 Pearson Education, Inc.
32) In the information systems (IS) industry, a technical writer develops test plans, and designs
and writes automated test scripts.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
33) To work in the information systems (IS) industry, a consultant should have an
entrepreneurial attitude and communications and people skills.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
34) To work in the information systems (IS) industry, a network administrator should have good
diagnostic skills, in-depth knowledge of communications technologies and products.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
35) List the major functions of the information systems (IS) department.
Answer: The major functions of the IS department are as follows:
• Plan the use of IS to accomplish organizational goals and strategy.
• Develop, operate, and maintain the organization's computing infrastructure.
• Develop, operate, and maintain applications.
• Protect information assets.
• Manage outsourcing relationships.
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
10
Copyright © 2018 Pearson Education, Inc.
36) Describe the chief information officers, or CIO's typical reporting relationships.
Answer: The title of the principal manager of the IS department varies from organization to
organization. A common title is chief information officer, or CIO. The CIO, like other senior
executives, reports to the chief executive officer (CEO), though sometimes these executives
report to the chief operating officer (COO), who, in turn, reports to the CEO. This is typically the
case in organizations such as manufacturers that operate significant nonaccounting information
systems. In some companies, the CIO reports to the chief financial officer (CFO). This reporting
arrangement might make sense if the primary information systems support only accounting and
finance activities.
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
38) Name the four groups found in typical information systems (IS) department, and explain the
major responsibilities of each.
Answer:
• The IS departments include a technology office that investigates new information systems
technologies and determines how the organization can benefit from them. The chief technology
officer, or CTO, often heads the technology group.
• The operations group manages the computing infrastructure, including individual computers,
in-house server farms, networks, and communications media. This group includes system and
network administrators. An important function for this group is to monitor the user experience
and respond to user problems.
• The development group manages the process of creating new information systems as well as
maintaining existing information systems.
• The outsourcing relations group exists in organizations that have negotiated outsourcing
agreements with other companies to provide equipment, applications, or other services.
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.1: What are the functions and organization of the IS department?
Classification: Concept
11
Copyright © 2018 Pearson Education, Inc.
39) Which of the following is a limitation of aligning information systems (IS) with
organizational strategy?
A) Adapting the IS to new versions of business processes is complex and time-consuming.
B) Aligning the IS direction with the organizational strategy occurs only when organizations
merge.
C) Aligning the IS direction with the organizational strategy occurs only when the divisions are
sold.
D) The steering committee provides a forum for the IS department to voice its complaints about
the users.
E) The steering committee provides a strong technical support base for users.
Answer: A
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
40) The ________ is the representative for information systems (IS) and information technology
(IT) issues within the executive staff who provides the IS perspective during discussions of
problem solutions, proposals, and new initiatives.
A) chief operating officer
B) chief technology officer
C) chief information officer
D) chief executive officer
E) chief information security officer
Answer: C
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
41) A(n) ________ is a group of senior managers from the major business functions that works
with the chief information officer (CIO) to set the information systems (IS) priorities and decide
among major IS projects and alternatives.
A) steering committee
B) discussion forum
C) IS department
D) directors committee
E) tiger team
Answer: A
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
12
Copyright © 2018 Pearson Education, Inc.
42) Which of the following is a function of the steering committee for the information systems
(IS) department?
A) writing program code
B) imparting training
C) adapting software
D) setting IS priorities
E) performance testing
Answer: D
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
43) Which of the following statements is TRUE about the steering committee of the information
systems (IS) department?
A) The steering committee is comprised of employees from the IS department in an organization.
B) The steering committee's membership is determined by the IS department.
C) The steering committee's schedule and agenda are typically set by the chief executive officer
(CEO) and other members of the executive staff.
D) The steering committee's meetings are conducted by the IS department.
E) The steering committee is composed of developers and auditors.
Answer: D
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
44) Which of the following statements is TRUE about information systems (IS) planning
functions?
A) The chief operating officer (COO) is the sole representative for IS and IT issues within the
executive staff.
B) The steering committee represents the IS department exclusively in high-level discussions.
C) The information systems (IS) department's priorities are developed by the chief executive
officer (CEO).
D) The chief executive officer (CEO) and other executive staff decide the membership of the
steering committee.
E) The CISO determines the composition of the steering committee.
Answer: D
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
13
Copyright © 2018 Pearson Education, Inc.
45) Maintaining alignment between information systems direction with organizational strategy is
a continuing process.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
46) Information systems (IS) must evolve as the organization merges with other organizations or
as divisions are sold.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
47) Adapting information systems (IS) to new versions of business processes is a quick process.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
48) The chief information officer (CIO) is the representative for information systems (IS) and
information technology (IT) issues within the executive staff.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
49) The chief information officer (CIO) provides the information systems (IS) perspective during
discussions of problem solutions, proposals, and new initiatives.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
14
Copyright © 2018 Pearson Education, Inc.
50) It is the chief information officer's responsibility to establish and communicate the
information systems (IS) priorities to the executive group.
Answer: TRUE
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
51) A steering committee is a group of senior managers from the major business functions that
works with the chief information officer (CIO) to set the information systems (IS) priorities.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
52) The steering committee serves an important communication function between the executive
group and the users of the information systems (IS).
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
53) The steering committee provides a forum for users to express their needs, frustrations, and
other issues they have with the information systems (IS) department.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
54) The chief executive officer (CEO) and other members of the executive staff usually set up
the steering committee's schedule and agenda.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
15
Copyright © 2018 Pearson Education, Inc.
55) The information systems (IS) department determines the membership of a steering
committee.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
16
Copyright © 2018 Pearson Education, Inc.
57) Describe a steering committee and explain the role of the chief information officer (CIO) in
the steering committee.
Answer: A steering committee is a group of senior managers from the major business functions
that works with the CIO to set the IS priorities and decide among major IS projects and
alternatives. The steering committee serves an important communication function between IS
and the users. In the steering committee, information systems personnel can discuss potential IS
initiatives and directions with the user community. At the same time, the steering committee
provides a forum for users to express their needs, frustrations, and other issues they have with the
IS department.
Typically, the IS department sets up the steering committee's schedule and agenda and conducts
the meetings. The chief executive officer (CEO) and other members of the executive staff
determine the membership of the steering committee.
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.2: How do organizations plan the use of IS?
Classification: Concept
58) Linela Insurance needs to hire twenty accountants immediately to support its accounts
receivable process. The hiring and training of the accountants requires a significant investment of
funds and time, which the company cannot afford. Linela decides to hire another accounting firm
to manage its accounts receivable process and thereby save time and money. This process is
known as ________.
A) merging
B) outsourcing
C) headhunting
D) diversifying
E) specializing
Answer: B
Diff: 3
AACSB: Reflective Thinking
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Application
61) KPL Inc. is an outsource vendor. It handles the recruiting process for Numero Uno
Computers. KPL recently changed its business strategy to a more profit-oriented one. This
modification would require the company to charge more for its services. This change will be a
________ risk for Numero Uno Computers.
A) de facto sole source
B) benefits outweighed by long-term costs
C) no easy exit
D) loss of control
E) high unit cost
Answer: D
Diff: 3
AACSB: Reflective Thinking
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Application
18
Copyright © 2018 Pearson Education, Inc.
63) Which of the following is a form of outsourcing?
A) ANP Infotech buying off-the-shelf software from a vendor
B) ANP Infotech customizing its information systems
C) ANP Infotech acquiring licensed manufacturing software from a vendor
D) ANP Infotech updating its data standards to protect its information assets
E) ANP Infotech retraining internal employees
Answer: C
Diff: 3
AACSB: Reflective Thinking
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Application
65) Which of the following is an outsourcing alternative in which hardware and both operating
system and application software are leased?
A) licensed software
B) Infrastructure as a Service (IaaS) cloud hosting
C) Software as a Service (SaaS)
D) virtualization
E) a bare metal installation
Answer: C
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Concept
19
Copyright © 2018 Pearson Education, Inc.
66) Which of the following is an example of outsourcing an entire business function?
A) acquiring licensed security software instead of developing it in-house
B) making customizations to licensed software
C) paying another organization to arrange for employee travel
D) acquiring virtualization technologies
E) buying new hardware the reduces internal labor costs
Answer: C
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Concept
67) In 2005, Marrion International chose a human resources consulting agency to handle its
human resource needs for the next 7 years. This is an example of ________ outsourcing.
A) network
B) software
C) business function
D) application
E) information
Answer: C
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Application
68) Atlanta Technologies outsourced its information technology (IT) support department to a
vendor in China. The vendor company, however, faced repeated instances of software failure and
now needs to make some changes to the information systems. Who among the following has
control over prioritizing issues related to such changes?
A) the chief technology officer at Atlanta (CTO)
B) the vendor
C) a third-party technician
D) the chief information officer at Atlanta (CIO)
E) the chief information security officer at Atlanta (CISO)
Answer: B
Diff: 3
AACSB: Reflective Thinking
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Application
20
Copyright © 2018 Pearson Education, Inc.
69) Which of the following is a risk of outsourcing information systems (IS)/information
technology (IT) functions?
A) It is easier to end an agreement between a vendor and an organization that hired the vendor.
B) It provides the hiring organization with too many choices.
C) It involves the potential loss of intellectual capital.
D) It invariably results in diseconomies of scale.
E) the vendor and organization will share the same goals.
Answer: C
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Concept
70) The process of hiring another organization to perform a service is known as outsourcing.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Concept
71) Outsourcing neither saves time for direct management, nor for indirect management.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Concept
21
Copyright © 2018 Pearson Education, Inc.
74) In the context of outsourcing, once a company has chosen a vendor, further risk management
is up to that vendor.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Concept
77) There is seldom any concern about the loss of intellectual capital with outsourcing.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Concept
78) Outsourcing does not present any risks related to ending an agreement.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Concept
22
Copyright © 2018 Pearson Education, Inc.
79) If the outsource vendor's employees have gained significant knowledge of the company,
ending the agreement is a major risk.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Concept
80) Replacing an outsource vendor, who is integrated into the business, can be done without a lot
of expenditure or duplication of effort.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Concept
81) Freeing up management time is a reason that some companies choose to outsource.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Concept
23
Copyright © 2018 Pearson Education, Inc.
83) How does outsourcing help reduce costs?
Answer: With outsourcing, organizations can obtain part-time services. Another benefit of
outsourcing is to gain economies of scale. If a number of organizations outsource to the same
vendor, then that vendor can make all of the adjustments once, and the cost of the change can be
amortized over all of them (thus lowering the cost that the vendor must charge).
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Concept
24
Copyright © 2018 Pearson Education, Inc.
86) Describe the different outsourcing alternatives for hardware, software, data, and procedures.
Answer: Organizations have found hundreds of different ways to outsource information systems
and portions of information systems.
Some organizations outsource the acquisition and operation of computer hardware. Electronic
Data Systems (EDS) has been successful for more than 30 years as an outsource vendor of
hardware infrastructure.
Acquiring licensed software is another form of outsourcing. Rather than develop the software in-
house, an organization licenses it from another vendor. Such licensing allows the software
vendor to amortize the cost of software maintenance over all of the users, thus reducing that cost
for all users.
Software as a service (SaaS) is another outsourcing alternative, in which hardware and both
operating system and application software are leased. Salesforce.com is a typical example of a
company that offers SaaS.
Another outsourcing alternative is to outsource an entire system. PeopleSoft (now owned by
Oracle) attained prominence by providing the entire payroll function as an outsourced service. In
such a solution, the vendor provides hardware, software, data, and some procedures. The
company need provide only employee and work information; the payroll outsource vendor does
the rest.
Finally, some organizations choose to outsource an entire business function. For years, many
companies have outsourced to travel agencies the function of arranging for employee travel.
Diff: 3
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Concept
25
Copyright © 2018 Pearson Education, Inc.
87) Describe the loss of control associated with outsourcing.
Answer:
• Vendor in driver's seat—Each outsource vendor has methods and procedures for its service.
The hiring organization and its employees will have to conform to those procedures.
• Technology direction—Unless the contract requires otherwise, the outsource vendor chooses
the technology that it wants to implement. If the vendor, for some reason, is slow to pick up on a
significant new technology, then the hiring organization will be slow to attain benefits from that
technology. An organization can find itself at a competitive disadvantage because it cannot offer
the same information systems (IS) services as its competitors.
• Potential loss of intellectual capital—The company may need to reveal proprietary trade
secrets, methods, or procedures to the outsource vendor's employees.
• Product fixes, enhancements in wrong priority—Quality vendors track software failures and
problems and fix them according to a set of priorities. When a company outsources a system, it
no longer has control over prioritizing those fixes. Such control belongs to the vendor. A fix that
might be critical to the organization might be of low priority to the outsource vendor.
• Vendor management, direction, or identity changes—The outsource vendor may change
management, adopt a different strategic direction, or be acquired. When any of those changes
occur, priorities may change, and an outsource vendor that was a good choice at one time might
be a bad fit after it changes direction. It can be difficult and expensive to change an outsource
vendor when this occurs.
• Chief information officer (CIO) may become superfluous—When users need a critical
service that is outsourced, the CIO must turn to the vendor for a response. In time, users learn
that it is quicker to deal directly with the outsource vendor, and soon the CIO is out of the
communication loop. At that point, the vendor has essentially replaced the CIO, who has become
a figurehead.
Diff: 3
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Concept
26
Copyright © 2018 Pearson Education, Inc.
88) Explain how the benefits of outsourcing are outweighed by its long-term costs.
Answer: Outsourcing can appear too good to be true. Some of the benefits of outsourcing that
are outweighed by its long-term costs are:
• High unit cost, forever—Although a fixed cost does indeed cap exposure, it also removes the
benefits of economies of scale.
• Paying for someone else's mismanagement—An organization can find itself paying for
another organization's mismanagement or may suffer the consequences of poor management,
such as lost data.
• In time, outsource vendor is de facto sole source—The outsource vendor may change its
pricing strategy over time. Initially, an organization obtains a competitive bid from several
outsource vendors. However, as the winning vendor learns more about the business and as
relationships develop between the organization's employees and those of the vendor, it becomes
difficult for other firms to compete for subsequent contracts. The vendor becomes the de facto
sole source and, with little competitive pressure, might increase its prices.
Diff: 3
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.3: What are the advantages and disadvantages of outsourcing?
Classification: Concept
27
Copyright © 2018 Pearson Education, Inc.
90) Every information systems (IS) user has the right to a secure computing environment. This
means that the ________.
A) organization should protect his/her computer and its files
B) user should solely be in charge of protecting the organization's computers and files
C) user should inform the IS about software upgrades
D) user will never face a network problem
E) user should be in charge of applying system patches
Answer: A
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.4: What are your user rights and responsibilities?
Classification: Concept
92) Which of the following is generally a responsibility of users of information systems (IS)?
A) reporting trivial problems
B) replacing legacy systems with improved ones
C) installing unauthorized programs
D) following security and backup procedures
E) installing unauthorized hardware
Answer: D
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.4: What are your user rights and responsibilities?
Classification: Concept
28
Copyright © 2018 Pearson Education, Inc.
93) Which of the following statements is TRUE about users of information systems?
A) They have a responsibility to protect their computers from viruses by installing their choice of
antivirus software.
B) They can avoid security and backup procedures.
C) They should learn standard techniques and procedures for the applications they use.
D) They should learn to install hardware and software on their own.
E) They should learn how to recover the data and systems they use.
Answer: C
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.4: What are your user rights and responsibilities?
Classification: Concept
94) SFA Inc. has a team of ten information systems (IS) personnel. The personnel are kept busy
throughout the day as they help employees solve even the most trivial issues. In which of the
following ways can the employees assist the IS personnel in this scenario?
A) by learning basic computer skills
B) by sharing their passwords with others to use their help in solving those trivial issues
C) by installing security programs by themselves
D) by making hardware modifications
E) by setting up their own data backup schedules
Answer: A
Diff: 2
AACSB: Reflective Thinking
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.4: What are your user rights and responsibilities?
Classification: Application
96) It is reasonable for information systems (IS) users to expect to receive repetitive training and
support for the same issue.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.4: What are your user rights and responsibilities?
Classification: Concept
29
Copyright © 2018 Pearson Education, Inc.
97) Information systems (IS) users have a responsibility to follow security and backup
procedures.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.4: What are your user rights and responsibilities?
Classification: Concept
98) Installation of unauthorized hardware and programs may interfere with automated
maintenance programs used for upgrading a user's computer.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.4: What are your user rights and responsibilities?
Classification: Concept
30
Copyright © 2018 Pearson Education, Inc.
100) List any four responsibilities of users of information systems (IS).
Answer: Users of information systems have a responsibility to:
• Learn basic computer skills
• Learn standard techniques and procedures for the applications they use
• Follow security and backup procedures
• Protect their password(s)
• Use computers and mobile devices according to the employer's computer-use policy
• Make no unauthorized hardware modifications
• Install only authorized programs
• Apply software patches and fixes when directed to do so
• When asked, devote the time required to respond carefully and completely to requests for
requirements for new system features and functions
• Avoid reporting trivial problems
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.4: What are your user rights and responsibilities?
Classification: Concept
101) Which of the following statements is TRUE about the changes and developments foreseen
by the year 2027?
A) Running a computer center will be the most promising career in each one's life.
B) Most organizations will move their internal hardware infrastructure into the cloud.
C) Software development lifecycle (SDLC) will be typically used for systems development.
D) Small computing devices will lose their popularity and become more expensive.
E) Nearly all information security problems will be solved by using more powerful AI.
Answer: B
Diff: 2
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.5: 2027?
Classification: Concept
102) Most organizations will move their internal hardware infrastructure to the cloud in the next
decade.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.5: 2027?
Classification: Concept
31
Copyright © 2018 Pearson Education, Inc.
103) By 2027, companies will no longer be concerned about security and therefore, will opt to
keep data on their own, privately controlled servers.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.5: 2027?
Classification: Concept
104) In the next decade, running a computer center for anyone other than a cloud vendor will not
be a promising career.
Answer: TRUE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.5: 2027?
Classification: Concept
105) There will most likely be a decline in the use of mobile devices at work in the next 10
years.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.5: 2027?
Classification: Concept
106) In the next decade, mobile devices will become more expensive with dynamic user
experiences.
Answer: FALSE
Diff: 1
AACSB: Information Technology
Course LO: Discuss the key issues involved in managing the components of IT infrastructure
LO: 11.5: 2027?
Classification: Concept
32
Copyright © 2018 Pearson Education, Inc.