Exam 14: The Balanced Scorecard and Business Value of Information Technology

The balanced scorecard management process starts with the Formulate step.

When the firm's value proposition meets or exceeds customers' requirements, customer satisfaction results in customer retention and new customer acquisition, which drives sales growth.

Function IT can be used without affecting more than one skilled worker.

Which of the following is not one of the types of business processes that should be considered, according to Kaplan and Norton, when considering the Process Perspective of the Balanced Scorecard? A. Customer management processes. B. Business continuity processes. C. Operations management processes. D. Regulatory and social processes. E. Innovation processes.

The value of an IT investment can be dependent on whether complementary capabilities exist within the firm. Which of the following is not one of the required complementary capabilities? A. Skilled workers. B. The ability to work in a team environment. C. The ability to query a database. D. The design of work processes.

The impact of an IT investment can depend on managers' decision-making abilities.

Experts agree that the most common reason firms don't realize value from their IT investments is that they do not have a structured plan. According to these same experts, what is the 2^nd most common reason? A. Unwillingness to adopt the new technology. B. Overestimating potential benefits. C. Lack of knowledge of how to begin. D. The new technology does not work properly.

All of the following are considered potential benefits of enterprise IT except: A. Customer service. B. Transaction automation. C. Execution of discrete tasks. D. Process integration. E. Performance monitoring and decision support.

Which of the following is the best reason for a firm to use a strategy map? A. It identifies which products should be developed and marketed. B. It allows firms to assess and prioritize gaps between current and desired performance levels. C. It allows firms to evaluate past financial results as the end result of activity in the other Balanced Scorecard perspectives. D. Developing a strategy map allows a firm's executives to go on a weekend retreat, which enhances the trust and bonds between the executive team members.

Which of the following is not a value proposition characteristic expected to influence customer value? A. Product attributes B. Image C. Innovation D. Relationship

Which of the following is not an organizational capability directly supported by Enterprise IT? A. Process definition B. Process integration C. Customer service D. Transaction automation

The success of Enterprise IT investments often depends on whether the company makes complementary changes in business processes.

The Val IT framework best aligns with and complements which of the following? A. The REA model. B. The COSO 2013 internal control framework. C. The Balanced Scorecard. D. The COBIT 5 framework.

Research shows that standardized, integrated, and networked technology enhances decision making and performance management.

Which of the following is the best description of the balanced scorecard? A. A strategic planning and management system B. A performance measurement framework C. A formal, structured approach to link IT investment to business performance D. All are descriptions of the balanced scorecard

Which of the following is the best description of the Link to Operations step in the balanced scorecard management process? A. The company establishes objectives, measures, targets, and initiatives. B. The company prepares operating budgets and prioritizes business process improvements. C. The company evaluates the effectiveness of its strategy. D. The company examines the competitive environment.

Network IT changes the way that work is performed and decisions are made.

The balanced scorecard only includes quantitative measures.

Which of the following best describes how using structured strategic management processes such as the Balanced Scorecard can have an impact on companies? A. Allows firms to more accurately estimate the cost of implementing new technologies. B. Enhances the efficiency and speed of supply chain transactions. C. Helps tie the use of supporting technologies to successful performance. D. Allows executives to have a dashboard view of key performance metrics.

Which of the following best explains the cause-and-effect relationships portrayed by the Balanced Scorecard? A. Improvements in the Process perspective leads to improvements in the Learning & Growth perspective. B. Improvements in the Learning & Growth and Customer perspectives lead to improvements in the Process perspective. C. Improvements in areas related to Customer and Process perspectives lead to improvements in the Financial perspective. D. Improvements in the Financial and Process perspectives lead to improvements in the Customer perspective.