Business Case

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Tutorial 3 Making the Business Case

Multiple Choice Questions
1. A mature, stable industry may need IS to ________ the current pace of operations, while a company in a newer, more volatile industry (i.e., a cellular phone company) may find it more important to __________________ technology. a. reduce, outsource

b. maintain, be on the leading edge of
c. advance, reduce
d. accelerate, maintain

2. Porter’s five forces include:
a. competitors, new entrants, customers, suppliers, distributors b. customers, suppliers, distributors, middlemen, stockholders c. stockholders, suppliers, distributors, customers, competitors d. competitors, customers, suppliers, new entrants, substitutes

3. Probably the most important factor that can affect IS investment is the nature of ________________ in the industry. a. competition or rivalry
b. technology
c. customer service
d. marketing

4. When making a successful business case, "Arguments based on data, quantitative analysis, and/or indisputable factors" are known as: a. arguments based on faith.
b. arguments based on fear.
c. arguments based on fact.
d. None of the above.

5. What type of argument is this: "This analysis shows that implementing the inventory control system will reduce errors by 50% and pay for itself within 18 months"? a. An argument based on faith

b. An argument based on fear
c. An argument based on fact
d. None of the above.

6. The most common way to make an argument based on fact, where convincing quantitative analysis proves the benefits outweigh the costs, is: a. to look at industry trends.
b. hire independent consultants.
c. to demonstrate what competitors are doing.
d. a cost-benefit analysis.

7. Costs that are one-time costs that are not expected to continue after the system is implemented are called: a. tangible costs.
b. intangible costs.
c. recurring costs.
d. nonrecurring costs.

8. The cost of employee salaries and benefits is an example of: a. intangible costs.
b. recurring costs.
c. high-risk costs.
d. infrastructure costs.

9. __________ costs are ongoing costs that occur throughout the life cycle of systems development, implementation, and maintenance. a. Intangible costs
b. Recurring costs
c. High risk costs
d. Infrastructure costs

10. ____________ costs are those that are easily identified and that are easy to recognize and track. a. Tangible costs
b. Intangible costs
c. Recurring costs
d. Nonrecurring costs
11. ___________ costs are those that are hard to quantify, that is, they are difficult to evaluate and track. a. Tangible costs
b. Intangible costs
c. Recurring costs
d. Nonrecurring costs

12. Benefits such as reduction in order entry errors, increase in the customer reach of a new Web-based system, etc. are examples of: a. tangible benefits.
b. intangible benefits.
c. recurring costs.
d. nonrecurring costs.

13. Benefits such as improved perception of the firm and faster turnaround on order fulfillment are examples of: a. tangible benefits.
b. intangible benefits.
c. recurring costs.
d. nonrecurring costs.

14. The IS manager:
a. is an intangible cost.
b. is a nonrecurring cost.
c. is not in a position to make recommendations to decision makers. d. has overall responsibility for managing IS development, implementation, and maintenance.

15. One of the best ways to make a business case for a new system is to: a. convert benefits to monetary terms.
b. take the CEO out to lunch and talk to him/her privately. c. gain influence or control of the executive committee. d. take your case to corporate stockholders.

16. A good strategy for making a business case is to:
a. devise proxy variables.
b. assess the...
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