Test Questions & Answers Information Systems Sourcing Ch.10

File: chapter10TestBank.docx, Chapter 10, Information Systems Sourcing

Multiple Choice

1. Kellwood, the American apparel maker, decided to consolidate and bring IT operations back in-house in order to reduce costs. Kellwood chose which of the following strategies?
2. Outsource
3. Backsource
4. Offshore
5. Captive center
6. Farshore

2. Outsourcing to a company located in the same time zone is referred to as which type of sourcing?

1. Farshoring
2. Nearshoring
3. Zoneshoring
4. Insourcing
5. Cloud computing

3. If a company decides to make and develop IS, they are using which type of sourcing?

1. Outsourcing
2. Cloud computing
3. Inshoring
4. Offshoring
5. Insourcing

4. The purchase of a good or service that was previously provided internally, or that could be provided internally, is called:

1. Outsourcing
2. Insourcing
3. Inshoring
4. Offshoring
5. Nearsourcing

5. The most common driver for insourcing is to:

1. Keep employees loyal to the company.
2. Make a system that cannot be bought.
3. Develop internal skill sets.
4. Maintain control over the development of the system
5. Keep core competencies in-house.

6. Which one of the following needs would suggest outsourcing as an option?

1. Reduced capacity.
2. Ease of transition to new technologies
3. Increase supplier relations
4. Growth of data centers
5. All of the above.

7. In 1989, Kodak chose a(n) _____ approach to outsourcing IS activities and chose to work with suppliers like IBM, DEC, and Businessland. This approach was soon dominated by other firms.

1. offshore
2. multivendor
3. nearshore
4. centralized
5. full outsourcing

8. The initial reason organizations outsourced IT was:

1. Downsizing
2. Innovation
3. Cost reduction
4. Standardization
5. Capacity

9. Organizations choose to outsource IT activities for all of the following reasons EXCEPT:

1. To realize cost savings
2. To have access to specialists they do not have in-house
3. To create a core competency
4. To infuse cash into the company
5. To support capacity on demand

10. Outsourcing providers have more experience dealing with a large number of IS staff and as a result, are often good at doing all of the following EXCEPT:

1. Marketing IS talent
2. Providing relevant technical training
3. Retaining IT workers for short-term employment
4. Hiring good IT professionals
5. Developing and sharing best practices

Response: See page 212

11. All of the following are risks associated with IS outsourcing EXCEPT:

1. Loss of control
2. Dependency on outsourcing providers
3. Inadequate adaption of newer technologies
4. Requiring more training of in-house staff
5. Potential loss of competitive secrets

12. Of the following, the newest sourcing option for today’s IT organizations is:

1. Outsourcing
2. Insourcing
3. Farshoring
4. Cloud computing
5. Crowdsourcing

13. Ensuring a cultural fit with an outsourcing provider is especially important when an organization is considering which one of the following?

1. Offshoring
2. Insourcing
3. Onshoring
4. Cloud computing
5. Selective outsourcing

14. Organizations may shy away from cloud computing because:

1. it does not support multiple time zones.
2. it costs more money than offshoring.
3. of increased data security and privacy concerns.
4. SLAs cannot be established.
5. short term contracts are required.

15. The functions of an entire data center can be replaced by which one of the following cloud computing providers?

1. Software as a Service (SaaS)
2. Application Service Provider (ASP)
3. Platform as a Service (PaaS)
4. Infrastructure as a Service (IaaS)
5. Outsourcing as a Service (OaaS)

16. iCloud is an example of:

1. Offshoring
2. Insourcing
3. Farshoring
4. Cloud computing
5. Backsourcing

17. Which of the following is when an IS organization uses contractor services, or even builds its own data center, in a distant land.

1. Cloud computing
2. Insourcing
3. Inshoring
4. Offshoring
5. Nearsourcing

18. IT organizations will outsource which one of the following IT activities?

1. Programming
2. IT transactions
3. Knowledge-based business processes
4. Data storage
5. All of the above.

19. Which of the following describes the new emphasis on experience-level agreements (XLAs)?

1. They are only required to provide traditional metrics in their reporting rquirements
2. They focus on business metrics and results given the dramatic changes in the IT services industry.
3. They are contracts used only in farshoring options.
4. Such contracts are tightened by not including clauses related to actions in the event of noncompliance
5. All of the above.

20. To provide potential customers an idea of an outsourcing provider’s development capabilities, the Software Engineering Institute developed what rating?

1. Tier *
2. IaaS
3. ISO9001
4. CMM
5. Six Sigma

21. Which of the following makes countries attractive for offshoring?

1. English language proficiency.
2. Political stability.
3. Economic stability.
4. Countries with friendly relationships.
5. All of the above.

22. Which type of captive center performs core business processes for a parent company and outsources noncore work offshore?

1. Hybrid Captive
2. Shared Captive
3. Divest Captive
4. Terminated Captive
5. Core Captive

23. What is it called when a company brings IS capabilities that were previously outsourced back inhouse?

1. Backsourcing
2. Insourcing
3. Software as a Service
4. Nearshoring
5. Cloud computing

24. Outsourcing decisions can be difficult and expensive to reverse because of:

1. Cultural differences.
2. Complicated infrastructure and staffing considerations.
3. Data security.
4. Data loss.
5. CMM.

25. In which of the following cloud types is each cloud managed centrally and none of the clouds are integrated?

1. Public
2. Hybrid
3. Multi-cloud
4. Private
5. Community

True/False

26. The global outsourcing market is growing.

27. Only large, multinational organizations pursue outsourcing arrangements.

28. Using outsourcing providers frees up a business’s employees so that they can devote their energies to core competencies for the business.

29. Outsourcing an IT infrastructure will always save an organization money.

Ans; False

30. The reasons given for backsourcing are similar to the reasons given for outsourcing in the first place.

31. More highly developed countries tend to offer higher levels of skills at lower costs.

32. Outsourcing of IT services began in 1949 with Eastman Kodak.

33. From the perspective of outsourcing clients, one of the best things about outsourcing are the 10-year long-term agreements.

34. Collaboration crowdsourcing is when social media is used to source solutions to a problem but only a few may be actually used.

35. Because they have an advanced technological foundation, countries in the highest tier are able to focus investments in “cottage industries.”

Short Answer

36. is the formal contract between clients and an outsourcing provider that describes the expected performance of the service.

37. was the first country to make IT outsourcing a total industry.

Response: See page 221

38. To reduce its dependence on a single outsourcing provider, an organization will seek flexibility and take a “best-of-breed” approach. is the term used to describe this use of multiple outsourcing vendors?

39. is the most widely used form of cloud computing.

40. To manage control yet realize the financial benefits that come with outsourcing, firms have created subsidiaries to operate on their behalf and provide services.

41. is the most traditional approach to sourcing.

42. Cloud computing is a form of outsourcing in which IT services are provisioned over the __________.

43. If a company decides to outsource to a company in another country that is close in proximity as well as culturally, economically, and politically similar, they are using type of outsourcing

44. A is a combination of public and private clouds where the services are integrated.

Essay

45. Explain the options a company has when the quality of work done by an outsourcing firm is no longer satisfactory.

46. Explain how an IS outsourcing provider is able to derive savings that companies themselves cannot realize.

47. How can an organization benefit from outsourcing an IS capability for which it internally has no skills or experience?

48. An outsourcing organization may not recommend the use of newer technologies. Why not?

49. Make the argument for why an outsourcing provider may actually provide better data security than an company’s IT organization can.

50. Compare and contrast cloud computing with offshore outsourcing.

51. How can a government create an environment where companies from other nations will want to offshore work to their country? List several specific examples.

Matching

52. Match the work activity as something that a company would ideally either outsource or insource.

53. Determine if the following scenario warrants a make or buy decision.

54. Match the decision made to mitigate outsourcing risk with the major decision area it represents.

copeactingecision for selection processcess is toships with multiple vendors rity than an orgnization'

55. Match the IT activity with the cloud computing provider that can satisfy that service.

56. Match the various cloud computing forms with their definition.

57. Match the scenario with its sourcing option.