Deck 12: IT Strategy and Balanced Scorecard

Question 1

Which of the following is not one of the major tasks of IT steering committees?

A)Enforce SLAs and other contracts
B)Allocate scarce resources
C)Set and evaluate performance metrics
D)Make staffing decisions

Answer 1

A

Question 2

Which of the following statements about the balanced scorecard (BSC)is false?

A)BSC is a strategic measurement and management methodology-and a tool.
B)The BSC method relies on four "balanced" financial measures.
C)The BSC methodology is widely used in all industry sectors for strategic planning.
D)HBR editors consider the BSC as one of the most influential management ideas of the past 75 years.

Answer 2

B

Question 3

Outsource relationship management companies monitor and manage sourcing arrangements and ________.

A)R&D
B)IT projects
C)service level agreements
D)SaaS

Answer 3

C

Question 4

Cloud computing and SaaS are two __________ options.

A)In-house development
B)Offshoring
C)Sourcing
D)BYOD

Question 5

Which of the following statements about business value drivers is false?

A)Drivers have a long or unlimited life span.
B)IT strategy focuses on the value drivers in core process areas in order to make targeted improvements.
C)Cost is almost always a value driver,but for this factor to be useful,you need to drill down to the activities that impact cost.
D)Drivers are considered in the strategic planning process and the balanced scorecard methodology.

Question 6

Activities that can improve the IT-business alignment include all of the following except ________.

A)Senior management is committed to IT planning.
B)CIO is a member of senior management.
C)CIO understands business planning and CEO understands company's IT planning.
D)All are activities that can improve the IT-business alignment

Question 7

Which of the following is not one of the objectives of IT strategic plans?

A)Improve management's understanding of IT opportunities and limitations.
B)Clarify the level of investment required
C)Assess past performance
D)Identify capacity and human resource requirements

Question 8

Balanced Scorecard (BSC)uses various metrics to measure performance,which consist of _______ financial metric(s)and ________ nonfinancial metric(s).

A)3;1
B)2;2
C)1;3
D)2;3

Question 9

A(n)________ needs to be in place that crosses organizational lines and makes senior management responsible for the success of key IT initiatives.

A)Enterprise strategy
B)SWOT analysis
C)SLA
D)Governance structure

Question 10

Skills of CIOs needed to improve IT-business alignment and governance include all of the following except ________.

A)Negotiating SaaS or other cloud service contracts.
B)Having political savvy.
C)Inspiring a shared vision and influencing subordinates and superiors.
D)Thinking strategically and making good decisions under pressure

Question 11

PwC's 5th annual Digital IQ global survey examined companies where there were strong collaborations between the CIO and other C-suite members and companies where there were less collaborative relationships.According to the survey,compared to less collaborative companies,strong collaborators are _________ more likely to be top performers and their IT projects are more likely to ________.

A)One and a half times;be on time,on budget,and within project scope.
B)Two times;create competitive advantages.
C)Three times;create competitive advantages
D)Four times;be on time,on budget,and within project scope.

Question 12

The BSC method balances financial measures with _____________.

A)Three forward-looking,nonfinancial measures.
B)Four quantitative measures.
C)Three qualitative metrics
D)Trend analysis

Question 13

The effectiveness of the IT function relies heavily on each of the following except ________.

A)Relationships with vendors
B)Implementing the latest social networks
C)Relationships with third-party suppliers
D)IT governance

Question 14

Prior to the BSC concept,the typical performance metrics included all of the following except ___________.

A)Balance sheets
B)Cash flow statements
C)Leading indicators
D)P&L (profit and loss)reports

Question 15

IT deployment strategies fall into two broad categories,which are ________:

A)In-house development and sourcing
B)Offshoring and onshoring
C)Cloud computing and SaaS
D)Acquisition and development

Question 16

Resource allocation is a contentious process in most organizations because opportunities and requests for spending far exceed the available funds.This can lead to __________ among organizational units,which makes it __________ to objectively identify the best investments.

A)Highly political competition;difficult
B)Highly political competition;easier
C)Cooperation;simple
D)Cooperation;difficult

Question 17

Few companies today could realize their full-potential business value without updated ________.

A)IT investments made on the basis of immediate needs or threats.
B)IT infrastructures and services.
C)IT investments that are patches.
D)Reactive approaches to IT investments.

Question 18

With the success of the mobile/social banking app Kaching,the Commonwealth Bank of Australia's CIO Michael Harte had not just supported business activities,he had ________.

A)Introduced a profitable new line of business.
B)Partnered with Facebook and Apple.
C)Doubled revenues.
D)Doubled online transactions.

Question 19

Why is it necessary to develop a long-term IT strategy and reexamine the strategy on a regular basis?

A)Systems need to be maintained
B)To keep the CIO part of the executive team
C)Organizational goals change over time
D)To automate business processes

Question 20

Long-term business planning starts with a clear understanding of the factors that create significant value and that work together with other factors to drive future revenue and profit at or above their current rates.These factors are ________.

A)Balanced values
B)Business objectives
C)IT strategy
D)Value drivers

Question 21

The major reasons why organizations are increasingly outsourcing include each of the following except:

A)To focus on core competency
B)It's a faster way to gain or enhance IT capabilities
C)To support supply chain transactions
D)Cloud computing and SaaS have proven to be effective IT strategies

Question 22

Hybrid solutions consisting of cloud and on-premises systems create ____________challenges.

A)financial
B)mobile
C)integration
D)social

Question 23

________ indicators confirm what has happened.They evaluate outcomes and achievements.

A)Lagging
B)Leading
C)Predictive
D)Proscriptive

Question 24

Enterprises choose outsourcing for several reasons.Which of the following is not one of the reasons?

A)To increase efficiency
B)To focus on core competency
C)Offshoring has become a more accepted IT strategy
D)To move IT investment from a recurring operational expense to a capital expenditure

Question 25

Examples of the Balanced Scorecard's innovation,learning,and growth measurement criteria are ___________.

A)Asset utilization and cash flow
B)Brand image and reputation
C)Cycle times and defect rates
D)Employee morale and IT capabilities

Question 26

Cloud computing,SaaS,PaaS,and other types of "as services" are examples of ___________.

A)IT outsourcing strategies
B)On premises systems
C)Capital investments
D)Business growth

Question 27

Which of the following characteristics of cloud strategy and services is false?

A)Cloud computing is a way for companies to procure technology as a service.
B)IT resources no longer depend on capital investments and IT developers to own that resource.
C)IT capabilities can be sourced,scaled on,and delivered on demand without physical location,labor,or capital restrictions.
D).Cloud is being adopted across more of the enterprise as full replacements for on-premises systems.

Question 28

The Balanced Scorecard can be used to translate strategic plans and mission statements into a set of objectives and performance metrics that ____________.

A)Are subjective and objective
B)Can be quantified and measured.
C)Are financial and reported to the SEc.
D)Focus on cash flows and market share.

Question 29

Which type of work is not readily offshored?

A)Work that has been routinized
B)Business activities that rely on common knowledge
C)Situations that would expose the company to data security or privacy risks
D)Office work

Question 30

Examples of the Balanced Scorecard's business processes measurement criteria are ___________.

A)Asset utilization and cash flow
B)Brand image and reputation
C)Cycle times and defect rates
D)Employee morale and IT capabilities

Question 31

________ is the ability to get data into and out of the cloud service.

A)Edge
B)Extensibility
C)Migration
D)Sourcing

Question 32

The term _____________ refers to a cloud service.

A)Access point
B)Node
C)XaaS
D)Edge service

Question 33

The Balanced Scorecard (BSC)uses ________ indicators.

A)Lagging only
B)Leading only
C)Both lagging and leading
D)Both Proscriptive and lagging

Question 34

When legacy systems could no longer provide the functionality needed to solve the business,companies migrated to ____________ to connect core systems and apps.

A)the cloud or SaaS
B)data centers
C)database management systems
D)offshoring

Question 35

Examples of the Balanced Scorecard's financial measurement criteria are ___________.

A)Asset utilization and cash flow
B)Brand image and reputation
C)Cycle times and defect rates
D)Employee morale and IT capabilities

Question 36

Examples of the Balanced Scorecard's customer measurement criteria are ___________.

A)Asset utilization and cash flow
B)Brand image and reputation
C)Cycle times and defect rates
D)Employee morale and IT capabilities

Question 37

Outsourcing can be done __________.

A)Domestically or offshore
B)Via cloud computing or SaaS
C)Via business processing
D)Domestically,offshore,via cloud computing,or SaaS

Question 38

________ converts senior management's priorities into visible,actionable objectives by identifying ways to measure progress against agreed-upon targets

A)Asset utilization
B)Balanced Scorecard
C)Financial governance
D)Strategic planning

Question 39

Cloud services have to integrate back to ________.

A)APIs
B)ISVs
C)core internal systems
D)social platforms

Question 40

The __________ is a group of managers and staff representing various organizational units that is set up to establish IT priorities and to ensure that the IS department is meeting the needs of the enterprise.

A)Steering committee
B)Board of directors
C)Executive suite
D)Audit team

Question 41

IT strategies fall into two broad categories: on-premises and offshoring.

Question 42

Before entering into any service contract with an IT vendor,get __________.

A)A demo or trial run
B)Everything in writing
C)The hardware installed
D)References

Question 43

Value drivers have an unlimited life span and are considered in the strategic planning process and the balanced scorecard methodology.

Question 44

Long-term business planning starts with a clear understanding of the factors that create significant value and that work together with other factors to drive future revenue and profit at or above their current rates.

Question 45

Operational value drivers are medium-term factors that minimize the cost of capital incurred by the company to finance operations.

Question 46

Companies that have multiple outsourcers may hire an outsource relationship management company to monitor and manage the outsourcing relationships.

Question 47

Which of the following statements about outsourcing is false?

A)Increasingly,organizations are leveraging existing global cloud infrastructures from companies such as Amazon and Google.
B)Established companies are less willing to outsource company-critical functions in an effort to reduce costs.
C)New start-up companies typically outsource and rely on SaaS to avoid upfront IT costs.
D)Outsourcing companies have started to offer interesting new business models and services around cloud computing.

Question 48

__________ occurs when the vendor deliberately underperforms while claiming full payment,for example,billing for more hours than were worked and/or providing excellent staff at first and later replacing them with less qualified ones.

A)Flexibility
B)Shirking
C)Poaching
D)Opportunistic repricing

Question 49

Making IT investments on the basis of an immediate need or threat is not a smart strategy because it can result in incompatible,redundant,or failed systems.

Question 50

Failed IT vendor relationships usually ___________.

A)Are followed by lawsuits
B)Start with experienced vendors
C)Are the result of poaching
D)Are the result of opportunistic repricing

Question 51

__________ occurs when the vendor develops a strategic application for a client and then uses it for other clients.

A)Flexibility
B)Shirking
C)Poaching
D)Opportunistic repricing

Question 52

Which is not one of the risks associated with outsourcing?

A)Flexibility
B)Shirking
C)Poaching
D)Opportunistic repricing

Question 53

In practice,competing agendas,tight budgets,poor interdepartmental communication,and politics can turn strategic planning discussions into bar room brawls-if they are not well managed.

Question 54

When selecting a vendor,two criteria to assess first are _____________.

A)Experience and stability
B)Cost and delivery time
C)Location and product mix
D)Reputation and trial run

Question 55

IT strategic planning is an ad hoc process for determining what a business should become and how to invest in IT.

Question 56

IT work or development can be sourced to consulting companies or vendors that are within the same country,which is referred to as insourcing.

Question 57

Based on case studies,which type of work is not readily offshored?

A)Work that would give result in the company keeping too much control over its critical operations.
B)Work that has been routinized.
C)Work that puts the company at great data security,data privacy,or intellectual property risks.
D)Business activities that rely on common combinations of domain and IT knowledge in order to do the work properly

Question 58

The SLA must be managed because it serves as both the blueprint and warranty for the outsourced arrangement.

Question 59

Sustainability value drivers are long-term factors that enable a business to continue functioning consistently and optimally for a long time.

Question 60

__________ occurs when a client enters into a long-term contract with a vendor,the vendor changes financial terms at some point or overcharges for unanticipated enhancements and contract extensions.

A)Flexibility
B)Shirking
C)Poaching
D)Opportunistic repricing

Question 61

The BSC method is "balanced" because it relies on both leading and lagging financial measures.

Question 62

Balanced Scorecard (BSC)uses four metrics to measure performance-one financial metric and three nonfinancial metrics.

Question 63

Two of the biggest risks and concerns of top management are (1)failing to align IT to real business needs and,as a result,(2)failing to deliver value to the business.

Question 64

BSC can be used to translate strategic plans and mission statements into a set of objectives and performance metrics that can be quantified and measured.

Question 65

A company can outsource the work,but not the responsibility for it.

Question 66

Business strategy sets the overall direction for the business;while the IT strategy defines what information,ISs,and architecture are needed to support the business and how infrastructure and services are to be delivered.

Question 67

Organizations use combinations of these IT strategies-in-house,onshore,or domestic sourcing,offshoring,cloud computing,and SaaS.

Question 68

The balanced scorecard (BSC)is a strategic measurement and management methodology and a tool.

Question 69

There are several possible reasons why a high percentage of IT projects are abandoned-the business strategy changed,technology changed,the project was not going to be completed on time or budget,the project sponsors responsible did not work well together,or the IT strategy was changed to cloud or SaaS.

Question 70

The Digital IQ study clearly shows that strong executive leadership and collaboration are crucial to building lasting value from IT.

Question 71

One of the skills CIOs need to improve IT-business alignment and governance is political savvy.

Question 72

IT strategic plans should be made within the context of the business strategy that it needs to support,which is how most companies do their IT planning.

Question 73

What was novel about BSC in the 1990s was that it measured a company's performance using a multidimensional approach of both leading and lagging indicators.

Question 74

Most business leaders believe that IT is critical to their companies' strategic success and all of them work with IT to achieve that success.

Question 75

The success of steering committees largely depends on the establishment of IT governance,formally established statements that direct the policies regarding IT alignment with organizational goals and allocation of resources.

Question 76

The steering committee consists of senior managers and directors who establish IT priorities and ensure the IT department is meeting the needs of the enterprise.

Question 77

A governance structure needs to be in place that crosses organizational lines and makes senior management responsible for the success of key IT initiatives.

Question 78

Links between business and IT plans should be made at the strategic,tactical,and operational levels.

Question 79

Ultimately,it is the CIO's duty to insure that IT and other critical activities are effectively governed.

Question 80

When an IT failure causes harm to customers,business partners,employees,or the environment,then regulatory agencies will hold the vendors accountable-and the public will too.