Management Information Systems, 14e (Laudon)
Chapter 14 Managing Projects
1) On average, private sector IT projects underestimated budget and delivery time of systems by
________ percent.
A) 30
B) 40
C) 50
D) 60
E) 70
2) As discussed in the chapter, which of the following is not one of the immediate consequences
of inadequate software project management?
A) cost overruns
B) customer loyalty
C) time slippage
D) technical shortfalls
E) failure to obtain anticipated benefits
3) Which of the following is not one of the five main variables affecting project success?
A) risk
B) vendors
C) time
D) quality
E) cost
4) You have been hired to implement an enterprise system that will automate much of the billing
and accounting work for a statewide HVAC services company. Which of the following would
you prepare to describe how the new system will affect a firm’s structure and operations?
A) information systems plan
B) internal integration report
C) sociotechnical design report
D) organizational impact analysis
E) strategic planning document
5) All of the following are indications of a failed information systems project except
A) employees are refusing to switch to the new system.
B) employees have created a spreadsheet solution to manipulate the data generated by the
system.
C) a redesigned Web site has fewer visits to the customer support pages.
D) employees require training to properly use the system.
E) the system is not being used by anyone.
6) Which of the following project management variables indicates how well the project satisfies
management objectives?
A) goals
B) risk
C) quality
D) scope
E) cost
7) Which of the following statistics from studies on failed projects is not true?
A) Only 32 percent of all technology investments were completed on time, on budget, and
with all features and functions originally specified.
B) Large software projects on average run 66 percent over budget and 33 percent over schedule.
C) Between 30 and 40 percent of all software projects are “runaway” projects that far exceed the
original schedule and budget projections and fail to perform as originally specified.
D) Thirty-two percent of technology investments are completed on time, within budget, and with
requirements met.
E) The average cost overrun of IT projects is 20 percent.
8) The cost of a project is based on the time to complete a project multiplied by the cost of
human
resources required to complete the project.
9) An information system project’s scope is directly related to its business requirements.
10) ________ refers to the application of knowledge, skills, tools and techniques to achieve
specific targets within specified budget and time constraints.
11) One of the five major variables in project management, ________ is an indicator of how well
the project satisfies management objectives.
12) The ________ is the part of the system that users interact with.
13) A planned series of related activities for achieving a specific business goal is called a(n)
________.
14) At the top of the management structure for information systems projects in a large company
is
A) project management.
B) the CIO.
C) the corporate strategic planning group.
D) the board of directors.
E) chief executive officer (CEO).
15) The ________ reviews and approves plans for systems in all divisions.
A) project management group
B) project team
C) IS steering committee
D) corporate strategic planning committee
E) chief executive officer (CEO)
16) The ________ consists of systems analysts, specialists from the relevant end-user business
areas, application programmers, and perhaps database specialists.
A) project management group
B) project team
C) IS steering committee
D) corporate strategic planning committee
E) system planning committee
17) The ________ is directly responsible for the individual systems project.
A) project management group
B) project team
C) IS steering committee
D) corporate strategic planning committee
E) systems planning committee
18) A road map indicating the direction of systems development, the rationale, the current
systems, new developments to consider, the management strategy, the implementation plan, and
the budget is called a(n)
A) project plan.
B) portfolio analysis.
C) information systems plan.
D) enterprise analysis.
E) strategic planning document.
19) The central method used in a portfolio analysis is to
A) inventory all of the organization’s information systems projects and assets.
B) perform a weighted comparison of the criteria used to evaluate a system.
C) survey a large sample of managers on their objectives, decision-making process, and uses and
needs for data and information.
D) interview a small number of top managers to identify their goals and criteria for achieving
success.
E) score proposed systems on a number of dimensions, and select the one with the highest score.
20) In using a portfolio analysis to determine which IT projects to pursue, you would
A) select the most low-risk projects from the inventory.
B) limit work to those projects with great rewards.
C) select only low-risk, high-reward projects.
D) balance high-risk, high reward projects with lower-risk projects.
E) avoid projects that were very costly.
21) Which method would you use to develop risk profiles for a firm’s information system
projects and assets?
A) information systems plan
B) scoring model
C) portfolio analysis
D) TCO
E) real options model
22) You have been hired by a pharmaceutical company to evaluate its inventory of systems and
IT projects. Which types of projects would be best avoided?
A) any high-risk projects
B) any low-benefit projects
C) all high-risk, low-benefit projects
D) none, any project might be beneficial
E) low cost, high benefit projects
23) The central method used in a scoring model is to
A) inventory all of the organization’s information systems projects and assets.
B) perform a weighted comparison of the criteria used to evaluate a system.
C) survey a large sample of managers on their objectives, decision-making process, and uses and
needs for data and information.
D) interview a small number of top managers to identify their goals and criteria for achieving
success.
E) calculate the return on investment for each system, and choose the system with the best return.
24) Which method is used to assign weights to various features of a system?
A) information systems plan
B) scoring model
C) portfolio analysis
D) TCO
E) real options model
25) The criteria used for evaluation in a scoring model are usually determined by
A) lengthy discussions among the decision-making group.
B) portfolio analysis.
C) the IS steering committee.
D) systems analysts.
E) project managers.
26) The information systems steering committee is composed of information systems managers
and end-user managers responsible for overseeing several specific information systems projects.
27) An information systems plan contains a statement of corporate goals and specifies how
information technology will support the attainment of those goals.
28) If an intended benefit of an IT project is improved decision making, managers should
develop a set of metrics to quantify the value of an improved decision.
29) Scoring models are most commonly used to make the final decision when selecting different
systems .
30) A(n) ________ is a method for deciding among alternative systems based on a system of
ratings for selected objectives.
31) You are working as a project manager for a small IT consulting firm and have been asked to
create a plan for reviewing and auditing completed projects in order to gauge their success. What
factors will you use to measure the success of a project? What questions would you ask in order
to understand why a project succeeded or failed?
32) Describe the elements of a management structure for information systems projects in a large
corporation.
33) List five types of information that should be included in an information systems plan.
34) You have been hired as a consultant for a nationwide real estate firm, Cross & Deptford, who
are interested in achieving better organization between branches by updating their information
systems, but are not sure what will suit their needs. What will you recommend they do in order to
determine the most effective IT projects?
35) Describe the process of portfolio analysis. In what situations is this evaluation method
useful?
36) You have been hired as a consultant to make recommendations for Smarty’s, a healthy fast-
food chain that is undergoing major expansion and is in need of a supply chain planning system.
They are evaluating two commercially available software packages. What systems evaluation
model will help them assess and compare the two packages? How does this model work?
37) You are using a capital budgeting method to assess the worth of your company’s new
information system. Which of the following costs would you include in measuring the cash
outflow?
A) increased sales of products
B) hardware and software expenditures
C) labor expenditures
D) reduced costs in production and operation
E) both B and C
38) The worth of systems from a financial perspective essentially revolves around the issue of
A) total cost of ownership.
B) adherence to information requirements.
C) asset utilization.
D) return on invested capital.
E) the cost of computing equipment.
39) All of the following are intangible benefits of information systems except
A) improved asset utilization.
B) increased organizational learning.
C) improved operations.
D) reduced workforce.
E) employee morale.
40) Which of the following is not a tangible benefit of information systems?
A) reduced rate of growth in expenses
B) lower computer expenses
C) improved resource control
D) increased productivity
E) end user satisfaction
41) The principal capital budgeting models for evaluating information technology projects are
the payback method, the accounting rate of return on investment (ROI), the net present value,
and the
A) future present value.
B) internal rate of return.
C) external rate of return.
D) ROPM (real options pricing model).
E) present value of future cash flows
42) In working with ROPMs (real option pricing models) and options valuation, a call option is
a(n)
A) obligation to purchase an asset at a later date at a fixed price.
B) obligation to either purchase or sell an asset at a later date at a strike price.
C) right to purchase an asset at a later date at a strike price.
D) right to purchase or sell an asset at a later date at a fixed price.
E) an obligation to sell an asset at a later date at a fixed price.
43) ROPMs (real options pricing models) value information systems similar to stock options, in
that
A) ROPMs can be bought and sold like stocks.
B) a company’s worth can be evaluated by the worth of their ROPMs.
C) initial expenditures on IT projects are seen as creating the right to pursue and obtain benefits
from the system at a later date.
D) expenditures and benefits from IT projects are seen as inflows and outflows of cash that can
be treated themselves like options.
E) the price paid today for information systems reflects their future cash flows.
44) To best evaluate, from a financial standpoint, an IT investment whose benefits cannot be
firmly established in advance, you would use
A) capital budgeting.
B) the real option pricing model.
C) a scoring model.
D) the net present value.
E) a portfolio analysis.
45) Which of the following is a limitation of using a financial approach to evaluate information
systems?
A) inability to measure ROI
B) inability to control vendor costs
C) inability to assess risk
D) inability to assess costs from organizational disruption
E) inability to assess the cost of technology