Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
Chapter 14 Project Management, Business Value,
and Managing Change
1) The cost of a project is based on the time taken to complete the project.
2) An information system project’s scope is directly related to its business requirements.
3) The information systems steering committee is composed of information systems managers
and end-user managers responsible for overseeing several specific information systems
projects.
4) An information systems plan contains a statement of corporate goals and specifies how
information technology will support the attainment of those goals.
5) If an intended benefit of an IT project is improved decision making, managers should
develop a set of metrics to quantify the value of an improved decision.
6) Scoring models are used most commonly to support decisions rather than as the final
arbiters of system selection.
7) Transaction and clerical systems that displace labor and save space typically produce more
measurable, tangible benefits than management information systems.
8) Intangible benefits cannot be immediately quantified but may lead to quantifiable gains in
the long run.
9) A benefit of using TCO analysis to evaluate an information technology investment is that it
is able to incorporate intangible and “soft” factors such as benefits and complexity costs.
10) More timely information is a tangible benefit of information systems.
11) Real options pricing models use the concept of options valuation borrowed from the
financial industry.
12) The larger the systems project, the more risk the project runs in terms of being completed
on time, within budget, and according to project requirements.
13) The systems analyst is the catalyst for the entire change process and is responsible for
making sure that everyone involved accepts the changes created by a new system.
14) The relationship between users and information systems specialists has traditionally been a
problem area for information systems implementation efforts.
15) User concerns and designer concerns are usually the same at the beginning of the project
but may diverge later as the system is built.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
16) A Gantt chart graphically depicts project tasks and their interrelationships.
17) Mandatory use of a system is one effective way of overcoming user resistance to an
information system.
18) Counterimplementation refers to a deliberate strategy to thwart the implementation of an
information system or an innovation in an organization.
19) The design of jobs, health issues, and the end-user interface of information systems are all
considerations in the field of ergonomics.
20) The goal of sociotechnical design is to create systems with better user interfaces and
contribute to fewer health issues.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
21) On average, private sector projects are underestimated by one-half in terms of budget and
time required to deliver the complete system promised in the system plan.
22) The user interface is the part of the system with which end users interact.
23) A project is a planned series of related activities for achieving a specific business objective.
24) Project management refers to the application of knowledge, skills, tools, and techniques to
achieve specific targets within specified budget and time constraints. Answer: TRUE
25) Scope defines what work is or is not included in a project.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
26) There are far more resources for systems projects than there are ideas.
27) The information systems steering committee is responsible for developing the firm’s strategic
plan, which may require the development of new systems.
28) A portfolio analysis is useful for selecting projects where many criteria must be considered.
29) A scoring model rely on measures of cash flows into and out of the firm; capital projects
generate those cash flows.
30) The project risk decreases if the project team and the information system staff lack the
required technical expertise.
31) On average, private sector IT projects underestimated budget and delivery time of systems
by ________ percent.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
A) 30
B) 40
C) 50
D) 60
32) 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) organizational conflict
C) time slippage
D) technical shortfalls
33) Which of the following is not one of the five main variables affecting project success?
A) risk
B) goals
C) time
D) quality
34) 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.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
35) 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
36) 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
37) 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
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
38) 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.
39) 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
40) 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.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
41) Which of the following project management variables indicates how well the project
satisfies management objectives?
A) goals
B) risk
C) quality
D) scope
42) 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.
43) 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.
44) Which method would you use to develop risk profiles for a firm’s information system
projects and assets?
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
A) information systems plan
B) scoring model
C) portfolio analysis
D) TCO
45) 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
46) 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.
47) 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
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
C) labor expenditures
D) reduced costs in production and operation
E) both A and D
F) both B and C
G) A, B, C and D
48) 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
49) 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.
50) 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.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
51) 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.
52) 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
53) 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.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
54) In working with ROPMs 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.
55) ROPMs 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.
56) 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.
57) Which of the following is a limitation of using a financial approach to evaluate information
systems?
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
A) inability to measure ROI
B) inability to control vendor costs
C) inability to assess risk
D) inability to assess costs from organizational disruption
58) Which of the following projects is the riskiest?
A) a project that managers are concerned will affect their roles and job descriptions
B) a project that requires technical expertise that your firm’s IT employees do not have
C) a project that has a strict deadline, or sales will suffer
D) a project that will automate many clerical duties
59) Which of the following statements best describes the effect that project structure has on
overall project risk?
A) Highly structured projects are more complex, and run a higher risk of programmers and
users misunderstanding the ultimate goals.
B) Projects with relatively undefined goals are more likely to be subjected to users
changing requirements and to run a higher risk of not satisfying project goals.
C) Highly structured projects tend to be larger, affecting more organizational units, and run
both the risk of out-of-control costs and becoming too difficult to control.
D) Less structured projects are more able to be quickly developed, tested, and implemented
using cutting-edge RAD and JAD development techniques, and pose less risk of running
up unforeseen costs.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
60) The project risk will rise if the project team and the IS staff lack
A) legacy applications as a starting point.
B) good equipment.
C) the required technical expertise.
D) financial studies and plans.
61) The organizational activities working toward the adoption, management, and routinization
of a new information system are called
A) production.
B) maintenance.
C) implementation.
D) acceptance.
62) One example of an implementation problem is
A) poor user interface.
B) inadequate user training.
C) project running over budget.
D) changes in job activities and responsibilities.
63) According to your reading of the chapter, change management is a process that
A) should be addressed before a project is developed.
B) begins when a project is implemented.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
C) is used primarily to mandate user acceptance.
D) must be addressed in all systems development.
64) Users prefer systems that
A) are oriented to facilitating organizational tasks and solving business problems.
B) work with existing DBMS.
C) are able to provide optimum hardware and software efficiency.
D) are capable of storing much more data than they need.
65) Which of the following is not one of the activities of the systems analyst?
A) acting as a change agent
B) communication with users
C) mediating between competing interest groups
D) formulation of capital budgeting models
66) Which of the following statistics from studies on failed projects is not true?
A) Between 30 and 40 percent of software projects fail in terms of budget, schedule, and
quality.
B) Thirty-two percent of technology investments are completed on time, within budget, and
with requirements met.
C) The average cost overrun of IT projects is 60 percent.
D) One in six IT projects have an average cost overrun of 200 percent.