Chapter 13 Building Information Systems

True-False Questions
1. 2. The overall business plan of the organization should support the information systems plan. Reference: p. 496 An organization must have a clear understanding of both its long- and short-term information requirements if it is going to develop an effective information systems plan. Reference: p. 496 An information systems plan should be decided on before selecting specific projects within the overall context of a strategic plan. Reference: p. 496 When developing an information systems plan, the organization is only required to have a basic understanding of its short-term information requirements. Reference: p. 496 The weakness of enterprise analysis is that it produces an enormous amount of data that is expensive to collect and difficult to analyze. Reference: p. 498 The principle method used in CSF analysis is JAD. Reference: p. 499 The strength of the CSF method is that it produces a smaller data set to analyze than the enterprise analysis method. Reference: p. 499 Organizational and individual CSFs must be the same within the organization if the organization is to succeed. Reference: p. 500 Rationalization of procedures often follows quickly from early automation. Reference: p. 500 An organizational change involving a paradigm shift is low risk and high return. Reference: p. 501 If organizations wait to apply computing power until after they rethink and redesign their business processes, they may obtain large payoffs. Reference: p. 501

3.

4.

5.

6. 7.

8.

9. 10. 11.

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12.

The conventional method of designing systems establishes how information technology can support processes and then establishes the information requirements of each business function. Reference: p. 502 Information technology can create new design options for various processes. Reference: p. 504 The majority of reengineering projects achieve breakthrough gains in business performance. Reference: p. 504 TQM derives from concepts developed by American quality experts, but was popularized in Japan. Reference: p. 505 Systems development activities always take place in sequential order. Reference: p. 506 Faulty requirements analysis is a leading cause of systems failure and high systems development costs. Reference: p. 507 End users should not be included in the design process, but must be involved later. Reference: p. 508 The amount of testing time needed for a new system is consistently underrated. Reference: p. 509 Thorough testing is not required if, during the programming stage, the design documents are sufficiently detailed. Reference: p. 509 Test-plan documentation consists of a series of test-plan screens maintained on a database. Reference: p. 510 Detailed documentation showing how the system works is usually finalized before conversion time for use in training and everyday operations. Reference: p. 510 The system is not in production until conversion is complete. Reference: p. 511 Documentation reveals how well the system has met its original objectives. Reference: p. 511 A data flow diagram offers a logical and graphical model of information flow, partitioning a system into modules that show manageable levels of detail. Reference: p. 512

13. 14. 15.

16. 17.

18. 19. 20.

21. 22.

23. 24. 25.

26.

Object-oriented frameworks have been developed to provide reusable, semi-complete applications a company can customize into finished applications. Reference: p. 513 A structure chart is a bottom-up chart, showing each level of design, its relationship to other levels, and its place in the overall design structure. Reference: p. 514 Object-oriented development is more iterative and incremental than traditional structured development. Reference: p. 514 Objects are grouped into hierarchies, and hierarchies into classes. Reference: p. 514 Structural diagrams are used to describe the relationships between classes of objects. Reference: p. 515 CASE tools facilitate the creation of clear documentation and the coordination of team development efforts. Reference: pp. 516-517 The oldest method for building information systems is prototyping. Reference: p. 516 Prototyping is more iterative than the conventional lifecycle. Reference: p. 517 A problem with prototyping is that the systems constructed thereby may not be able to handle large quantities of data in a production environment. Reference: p. 518 End-user-developed systems can be completed more rapidly than those developed through the conventional systems lifecycle. Reference: p. 519 An advantage of fourth-generation tools is that they can easily handle processing large numbers of transactions or applications with extensive procedural logic and updating requirements. Reference: p. 519 Generally all costs of a system are obvious at the beginning of a project. Reference: p. 522 In some forms of outsourcing, a company hires an external vendor to create the software for its system, but operates the software on its own computers. Reference: p. 522 In the digital firm environment, organizations must be able to add, change, and retire technology capabilities much more rapidly than traditional development methods will allow. Reference: p. 525

27.

28.

29. 30. 31.

32. 33. 34.

35.

36.

37. 38.

39.

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40.

Businesses are using component-based development to create their e-commerce applications. Reference: p. 526

Multiple-Choice Questions
41. A road map indicating the direction of systems development, the rationale, the current situation, new developments to consider, the management strategy, the implementation plan, and the budget is called a: a.project plan. b.request for proposal. c.information systems plan. d.mission statement. Reference: p. 496 42. Two principal methodologies for establishing the essential information requirements of the organization as a whole are: a.personal interviews and critical success factors. b.enterprise analysis and systems analysis. c.object-oriented design and systems analysis. d.enterprise analysis and critical success factors. Reference: p. 499 43. A small number of easily identifiable operational goals shaped by the industry, the firm, the manager, and the broader environment that are believed to assure the success of an organization best describes: a.strategic objectives. b.management objectives. c.critical success factors. d.information plan objectives. Reference: p. 499 44. The most common form of IT-enabled organizational change is: a.rationalization of procedures. b.paradigm shifts. c.accessibility and empowerment. d.automation. Reference: p. 500 45. The streamlining of standard operating procedures to eliminate obvious bottlenecks is: a.rationalization of procedures. b.paradigm shifts. c.accessibility and empowerment. d.automation. Reference: p. 501

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46.

The radical redesign of business processes is: a.rationalization of procedures. b.paradigm shifts. c.accessibility and empowerment. d.business process reengineering. Reference: p. 501

47.

A paradigm shift involves: a.rethinking the nature of the business itself. b.rethinking the nature of the information systems process itself. c.rethinking the nature of the organization itself. d.Both a and b Reference: p. 501

48.

When systems are used to strengthen the wrong business model or business processes: a.the resulting information system is very difficult to analyze. b.the resulting system has no impact on the firms performance. c.the business becomes more efficient doing what it shouldnt do. d.organizational change does not occur. Reference: p. 502

49.

When many companies work together to jointly redesign their shared processes, James Champy calls the procedure: a.enterprise engineering. b.Six sigma. c.BPR. d.X-engineering. Reference: p. 504

50.

Business process management does not include:: a.data flow diagrams b.process monitoring. c.analytics d.work flow management. Reference: p. 504

51.

TQM focuses on: a.mid-level management. b.a series of continuous improvements. c.a few large-scale improvements. d.eliminating design errors. Reference: p. 505

52.

A specific measure of quality, representing 3.4 defects per million opportunities best describes: a.return on investment. b.activity-based cost. c.internal rate of return. d.six sigma. Reference: p. 505

53.

External industry standards, standards set by other companies, and/or internally developed high standards are used to set up: a.total quality management. b.six sigma installation. c.benchmarking procedures. d.workflow management. Reference: p. 506

54.

Systems design: a.describes what a system should do to meet information requirements. b.shows how the new system will fulfill the information requirements?. c.always tries to increase precision. d.includes the testing phases. Reference: p. 507

55.

The entire system-building effort is driven by: a.systems analysis. b.end-user support capabilities. c.the database design. d.user information requirements. Reference: p. 508

56.

Unit testing: a.includes all the preparations for the series of tests to be performed on the system. b.tests the functioning of the system as a whole in order to determine if discrete modules will function together as planned. c.tests each program separately. d.provides the final certification that the system is ready to be used in a production setting. Reference: p. 509

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57.

System testing: a.includes all the preparations for the series of tests to be performed on the system. b.tests the functioning of the system as a whole in order to determine if discrete modules will function together as planned. c.tests each program separately. d.provides the final certification that the system is ready to be used in a production setting. Reference: p. 509

58.

Acceptance testing: a.includes all the preparations for the trials. b.tests the functioning of the system as a whole in order to determine if discrete modules will function together as planned. c.tests each program separately. d.provides the final certification that the system is ready to be used in a production setting. Reference: p. 509

59.

In the pilot study conversion strategy, the new system: a.is tested by an outsourced company. b.replaces the old one at an appointed time. c.and the old are run together. d.is introduced to a limited area until it is proven to work properly. Reference: p. 510

60.

In the parallel conversion strategy, the new system: a.is tested by an outsourced company. b.replaces the old one at an appointed time. c.and the old are run together. d.is introduced to a limited area until it is proven to work properly. Reference: p. 510

61.

In the direct cutover conversion strategy, the new system: a.is tested by an outsourced company. b.replaces the old one at an appointed time. c.and the old are run together. d.is introduced to a limited area until it is proven to work properly. Reference: p. 510

62.

The _____________ occurs after the system is in production. a.preparation of documentation b.iterative process c.post implementation audit d.feasibility audit Reference: p. 511

63.

Changes in hardware, software, documentation, or production to a production system to correct errors, meet new requirements, or improve processing efficiencies are termed: a.tested. b.classified. c.maintenance. d.models. Reference: p. 511

64.

In terms of percentages, the maintenance phase devotes approximately _____ percent to changes in data, files, reports, hardware, or system software. a.20 b.25 c.40 d.35 Reference: p. 511

65.

The primary tool for representing a systems component processes and the flow of data between them is the: a.data dictionary. b.knowledge base. c.user documentation. d.data flow diagram. Reference: p. 512

66.

A tool for structured analysis that contains information about individual pieces of data and data groups within the system is called the: a.data dictionary. b.data catalog. c.data master. d.data log. Reference: p. 512

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67.

In object-oriented software development, relationship between objects would be described using: a.structural diagrams. b.behavioral diagrams. c.use case diagrams. d.object diagrams. Reference: p. 515

68.

Object-oriented modeling is based on the concepts of: a.processes and data classes. b.data classes and data flows. c.class and inheritance. d.logical application groups and data classes. Reference: p. 513

69.

Object-oriented development could potentially reduce the time and cost of writing software because: a.object-oriented programming requires less training. b.iterative prototyping is not required. c.objects are reusable. d.a graphical interface is automatic. Reference: p. 514

70.

The industry standard for representing various views of an object-oriented system that uses a series of graphical diagrams is: a.XTHML. b.XML. c.UML. d.PPT.IP. Reference: p. 514

71.

Behavioral diagrams are used to: a.describe interactions in an object-oriented system. b. describe how employees will react to learning new systems. c.reduce the need for extensive programming. d.describe relationships between classes. Reference: p. 515

72.

The oldest method for building information systems is the: a.pilot study. b.systems approach. c.iterative process. d.systems life cycle. Reference: p. 516

73.

In the traditional systems life cycle, end users: a.are important and ongoing members of the team from the original analysis phase through maintenance. b.are important only in the testing phases. c.have no input. d.are limited to providing information requirements and reviewing the technical staffs work. Reference: pp. 517-518

74.

The use of _______________ is most likely to produce systems that fulfill user requirements. a.documentation b.prototyping c.a pilot study d.a parallel strategy Reference: p. 518

75.

When systems are created rapidly, without a formal development methodology: a.end users can take over the work of IT specialists. b.the organization quickly outgrows the new system. c.hardware, software, and quality standards are less important. d.testing and documentation may be inadequate. Reference: p. 519

76.

Management should control the development of end-user applications by: a.developing a formal development methodology. b.requiring cost justification for end-user IS projects. c.establishing standards for user-developed applications. d.Both b and c Reference: p. 519

77.

If an organizations requirements conflict with the software package chosen and the package cannot be customized, the organization will have to: a.outsource the development of the system. b.redesign the RFP. c.change the evaluation process. d.change its procedures. Reference: p. 521

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78.

Hidden costs such as _____________________ can easily undercut anticipated benefits from outsourcing. a.monitoring vendors to make sure they often are fulfilling their contractual obligations. b.transitioning to a new vendor. c.identifying and evaluating vendors of information technology services d.a, b, and c Reference: p. 522

79.

Systems must be scalable to accommodate growing numbers of users and: a.to deliver data over multiple platforms. b.to accommodate new interfaces. c.to accommodate systems built by external vendors. d.to accommodate applications packages. Reference: p. 525

80.

Web services use: a.a proprietary architecture. b.a plug and play architecture. c.joint application development. d. rapid application development. Reference: p. 528

Fill in the Blanks

81. Enterprise analysis is also known as business systems planning. Difficulty: Medium 82. Reference: p. 496

Critical success factors are a small number of easily identifiable operational goals shaped by the industry, the firm, the manager, and the broader environment that are believed to assure the success of an organization. Difficulty: Hard Reference: p. 499

83.

Automation uses the computer to speed up the performance of existing tasks. Difficulty: Medium Reference: p. 500

84.

Rationalization of procedures is the streamlining of standard operating procedures, eliminating obvious bottlenecks, so the automation makes operating procedures more efficient. Difficulty: Medium Reference: p. 500

85.

Business process reengineering is the radical redesign of business procedures, combining steps to cut waste and eliminate repetitive, paper-intensive tasks. Difficulty: Medium Reference: p. 501

86.

A(n) paradigm shift is a radical reconceptualization of the nature of the business and the nature of the organization. Difficulty: Medium Reference: p. 501

87.

Work flow management is the process of streamlining business procedures so the documents can be moved easily and efficiently from one location to another. Difficulty: Easy Reference: p. 502

88.

Six sigma is a specific measure of quality, representing 3.4 defects per million opportunities. Difficulty: Hard Reference: p. 505

89.

Total quality management (TQM) focuses on making a series of continuous improvements.. Difficulty: Easy Reference: p. 505

90.

Benchmarking is the setting of strict standards for products, services, or activities and measuring organizational performance against those standards. Difficulty: Medium Reference: p. 506

91.

Systems development is the activities that go into producing an information systems solution to an organizational problem or opportunity. Difficulty: Easy Reference: p. 506

92.

A(n) feasibility study is the way the organization determines whether the solution is achievable, given the organizations resources and constraints. Difficulty: Medium Reference: p. 506

93.

Information requirements contain a detailed statement of the information needs that a new system must satisfy; identifies who needs what information, and when, where, and how the information is needed. Difficulty: Medium Reference: p. 507

94.

A(n) systems design details how a system will meet the information requirements as determined by the study of information needs. Difficulty: Medium Reference: p. 507

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95.

Programming is the process of translating the system specifications prepared during the design stage into code. Difficulty: Easy Reference: p. 509

96.

Testing is the exhaustive and thorough process that determines whether the system produces the desired results under known conditions. Difficulty: Easy Reference: p. 509

97.

A(n) test plan includes all the preparations for the series of tests to be performed on the system. Difficulty: Easy Reference: p. 510

98.

Conversion is the process of changing from the old system to the new system. Difficulty: Easy Reference: p. 510

99.

A(n) parallel strategy is the safest and most conservative conversion approach. Difficulty: Medium Reference: p. 510

100.

Documentation describes how an information system works from both the technical and the end-user standpoints. Difficulty: Easy Reference: p. 510

101.

Structured refers to the fact that the techniques are step by step, with each step building on the previous one. Difficulty: Medium Reference: p. 511

102.

A data flow diagram represents a systems component processes and the flow of data between them.. Difficulty: Easy Reference: p. 512

103.

Process specifications describe the transformation occurring within the lowest level of the data flow diagrams. They express the logic of each process. Difficulty: Easy Reference: p. 513

104.

In structured methodology, the structure chart is a top-down chart, showing each level of design, it relationship to other levels, and its place in the overall design structure. Difficulty: Easy Reference: p. 513

105.

Object-oriented development uses the object as the basic unit of system analysis and design. Difficulty: Easy Reference: p. 513

106.

In a class diagram, the attributes for each class are displayed in the middle portion of each box. Difficulty: Hard Reference: p. 513

107.

Unified Modeling Language (UML) has become the industry standard for representing various views of an object-oriented system using a series of graphical diagrams. Difficulty: Easy Reference: p. 514

108.

Behavioral diagrams are used to describe interactions in an object-oriented system. Difficulty: Hard Reference: p. 515

109.

Back-end CASE tools are used for coding, testing, and maintenance work. Difficulty: Hard Reference: p. 516

110.

The systems life cycle is a traditional methodology for developing an information system that partitions the systems development process into formal stages that must be completed sequentially. Difficulty: Easy Reference: p. 516

111.

Prototyping is the process of building an experimental system quickly and cheaply for demonstration and evaluation. Difficulty: Easy Reference: p. 517

112.

A(n) prototype is the preliminary working version of an information system. Difficulty: Easy Reference: p. 517

113.

End-user development is the development of information systems by end-users with little or no formal assistance from technical specialists. Difficulty: Easy Reference: p. 518

114.

Query languages are software tools that provide immediate online answers to requests for information that are not predefined. Difficulty: Easy Reference: p. 518

115.

Customization is the modification of a software package to meet the organizations unique requirements without destroying the package softwares integrity. Difficulty: Easy Reference: p. 521

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116.

A(n) Request for Proposal (RFP) is a detailed list of questions submitted to providers of software or other services to determine how well the vendors product can meet the organizations specific requirements. Difficulty: Easy Reference: p. 521

117.

Outsourcing is the practice of contracting various operations to external vendors. Difficulty: Easy Reference: p. 522

118.

Rapid application development is a process for developing systems in a very short time by using prototyping, fourth-generation tools, and close teamwork among users and systems specialists. Difficulty: Easy Reference: p. 525

119.

Joint application design is a process used to accelerate the generation of information requirements by having end-users and information system specialists work together in intensive interactive design sessions. Difficulty: Easy Reference: p. 525

120.

Web services are software components deliverable over the Internet that enable one application to communicate with another with no translation required using a standard plugand-play architecture. Difficulty: Easy Reference: pp. 526 and 528

Essay Questions

121.

Compare the strengths and weaknesses of enterprise analysis and strategic analysis. Enterprise analysis argues that the firms information requirements can only be understood by looking at the entire organization in terms of organizational units, functions, processes, and data elements. The central method used in the enterprise analysis approach is to take a large sample of managers and ask them how they use information, where they get it, what their environments are like, what their objectives are, how they make decisions, and what their data needs are. The results of this survey of managers are aggregated subunits, functions, processes, and data matrices. The strength of enterprise analysis is in its complete picture of the way the organization conducts its business. The weakness of the enterprise analysis is that it produces so much data that it is expensive to conduct and difficult to organize and analyze. A further weakness is that the enterprise analysis tends to look at the way existing information is used and not at the fact that new approaches may be required. The strategic analysis, or critical success factors, approach argues that organizations information requirements are determined by a small number of critical success factors of managers. The premise of the strategic analysis approach is that there are a small number of objectives and that managers can easily identify them. The principal method used is the personal interview three or four with a number of top managers to identify their goals and the resulting critical success factors. Systems are then built to deliver information on these critical success factors. The strength of the CSF method is that it produces smaller data sets than does enterprise analysis. The CSF method takes into account the changing environment with which organizations and managers must operate. It is especially suitable for top management and for the development of DSS and ESS. The methods primary weakness is that the aggregation process and the analysis of the data are art forms. There is no particularly rigorous way in which individual CSFs can be aggregated into a clear company pattern. A second problem is that there is often confusion among interviewees between individual and organizational CSFs. They are not necessarily the same. What can be critical to a manager may not be important to the entire organization. Finally, the method is biased toward top managers because they are generally the only ones interviewed.

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122.

Describe the process that banks have gone through in reengineering the home mortgage industry. The application process for a mortgage once took about six to eight weeks and cost about $3,000. The process is divided into three stages: origination, servicing, and secondary marketing. In the past, a mortgage applicant filled out a paper loan application. The bank entered the application into its computer system. Specialists, perhaps in as many as 8 different departments, accessed and evaluated the application individually. If it was approved, the closing was scheduled. After the closing, bank specialists dealing with insurance or funds in escrow serviced the loan. This desk-to-desk assembly-line approach might have taken up to 17 days. Banks have replaced this sequential process with a faster team approach. Load originators in the field enter the application directly into laptop computers. Software checks the application transaction to make sure that all of the information is correct and complete. The loan originators transmit the application using a dial-up network to regional production centers. The various specialists convene electronically, working as a team to approve the mortgage. Some banks provide customers with a nearly instant credit lock-in of a guaranteed mortgage so they can find a house that meets their budget immediately. After closing, another team of specialists sets up the loan for servicing. The entire loan process can take as little as two days.

123.

What are the steps in an effective reengineering process? To reengineer effectively, senior management must develop a broad strategic vision that calls for redesigned business processes. Companies should next identify a few core business processes to be redesigned, focusing on those with the greatest potential payback in strategic value. Next, management must understand and measure the performance of the existing processes as a baseline. Using information technology creates new design options for various processes because it can be used to challenge long-standing assumptions about work arrangements that use to inhibit organizations. The organizations IT infrastructure should have capabilities to support business process changes that span boundaries between functions, business units, or firms. It must also be remembered that a new information system always affects jobs, skill requirements, workflows, and reporting relationships. Fear of these changes will breed resistance, confusion, and even conscious efforts to undermine the changes. Thus, in reengineering, people as well as processes must be considered.

124.

List and describe at least four ways that information systems can support total quality management. Which do you think should be implemented first? Simplifying the product or the production process Benchmarking Use customer demands as a guide to improving products and services Reduce cycle time Improve the quality and precision of the design Increase the precision of production

125.

Of what does systems analysis consist? What does the systems analyst do to achieve these goals? It consists of defining the problem, identifying its causes, specifying the solution, and identifying the information requirements that must be met by a system solution. The system analyst creates a road map of the existing organization and systems, identifying the primary owners and users of data in the organization. From this organizational analysis, the systems analyst details the problems of existing systems. By examining documents, work papers, and procedures; observing system operations; and interviewing key users of the systems, the analyst can identify the problem areas and objectives a solution would achieve. Often the solution requires building a new information system or improving an existing one. The systems analysis itself would include a feasibility study to determine whether the solution suggested would be achievable from a financial, technical, and organizational standpoint.

126.

List and describe at least nine factors considered in the design specifications for a new system. Give at least two examples for each one. Output medium, content, timing Input origins, flow, data entry User interface simplicity, efficiency, logic, feedback, errors Database design logical data model, volume and speed requirements, organization and design, record specifications Processing computations, program modules, required reports, timing of outputs Manual procedures what activities, who performs them, when, how, where Controls input controls, processing controls, output controls, procedural controls Security access controls, catastrophe plans, audit trails Documentation operations documentation, systems documents, user documentation Conversion transfer files, initiate procedures, select testing method, cut over to new system Training select training techniques, develop training modules, identify training facilities Organizational changes task redesign, job design, process design, organization structure design, reporting relationships

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127.

Describe the processes, considerations, and problems involved in testing the new system. Testing answers the question, Will the system produce the desired results under known conditions? The amount of time needed to answer this question has been traditionally underrated in systems project planning. Testing is time-consuming: Test data must be carefully prepared, results reviewed, and corrections made in the system. In some instances parts of the system may have to be redesigned. Three activities are involved in testing and information system: Unit testing consists of testing each program separately in the system. The objective is not to guarantee the programs are error free (which is impossible), but to locate errors in the programs, focus on finding all the ways to make a program fail, and correcting problems. System testing tests the functioning of the system as a whole. It tries to determine if discrete modules will function together as planned and whether discrepancies exist between the way the system actually works and the way it was conceived. Among the areas examined are performance time, capacity for file storage, handling peak loads, recovery and restart capabilities, and manual procedures. Acceptance testing provides the final certification that the system is ready to be used in a production setting. Users and management review the systems tests. When all parties are satisfied the new system meets the standards the system is formally accepted for installation.

128.

What are the advantages and disadvantages of prototyping? Describe the steps in prototyping. Give at least two circumstances under which prototyping might be useful. Prototyping is most useful when there is some uncertainty about requirements or design solutions. It is especially useful in designing the end-user interface. Because prototyping encourages intense end-user involvement throughout the process, it is more likely to produce systems that fulfill user requirements. Working prototype systems can be developed very rapidly and inexpensively. Rapid prototyping can gloss over essential steps in systems development. If the completed prototype works reasonably well, management may not see the need for reprogramming, redesigned, full documentation in testing to build a polished production system. This can backfire later with large quantities of data or large numbers of users in a production environment. The steps in prototyping are: Identify the users basic requirements Develop an initial prototype Use the prototype Revise and enhance the prototype

129.

List the identifying features of each of the five systems development approaches. Systems lifecycle sequential step-by-step formal process, written specification and approvals, limited role of users Prototyping requirements specified dynamically with experimental system; rapid, informal, and iterative process; users continually interact with the prototype Applications software package commercial software eliminates the need for internally developed software programs End-user development systems created by end users using fourth-generation software tools, rapid and informal, minimal role of information systems specialists Outsourcing systems built and sometimes operated by an external vendor

130.

Describe the object-oriented development approach. Why is it considered best for applications involving the Internet? This approach to systems development uses the object as the basic unit of systems analysis and design. The system is modeled as a collection of objects and the relationships between them. In the digital firm environment, organizations need to be able to add, change, and retire their technology capabilities very rapidly. Companies are adopting shorter, more informal development processes for many of their e-commerce in the business applications, processes that provide fast solutions that do not disrupt their core transaction processing systems and organization databases.