Deck 10: E-Business and Enterprise Resource Planning Systems

Question 1

The US Department of State provides information on its web site for US citizens traveling to other countries and for citizens of other countries traveling to the US. Which of the following statements is most true?

A)The US Department of State is not engaged in e-business because it does not sell the information.
B)The US Department of State is not engaged in e-business because it provides information to non-citizens.
C)The US Department of State is engaged in G2B e-business.
D)The US Department of State is engaged in G2C e-business.

Answer 1

D

Question 2

SBL Corporation is preparing to expand into B2B e-business. If SBL sells office supplies to its customers, its database should include all of the following tables except:

A)Supplies
B)Inventory
C)Order
D)Order / inventory

Answer 2

A

Question 3

E-business offers many potential benefits for a company's marketing efforts. Those benefits include:

A)Selling to a more diverse group of customers.
B)Allowing a business to focus its marketing efforts.
C)Both A and B.
D)Neither A nor B.

Answer 3

C

Question 4

A company engaged in B2C e-business needs to create a new computer network. The process of creating the network would benefit most from:

A)The capability maturity model.
B)The systems development life cycle.
C)The use of expectancy theory.
D)Re-ordering the steps in the accounting cycle.

Question 5

Which of the following is most closely related to one of the benefits of e-business discussed in the text?

A)Internal controls
B)Company finances
C)Selling to a broader range of customers
D)All of the above are related to benefits of e-business.

Question 6

Hewlett-Packard builds and sells computers and related accessories. It can engage in which of the following forms of e-business?

A)B2C
B)B2B
C)Both of the above.
D)None of the above.

Question 7

Consider the following flowcharting shapes as you answer the next question: SBL Corporation is preparing to expand into B2B e-business. A flowchart of their sales process should definitely include which of the following symbols?

A)Symbol A
B)Symbol B
C)Symbol C
D)Symbol D

Question 8

WebTrust and SysTrust are most closely related to which of the following?

A)Elements of Brown's risk taxonomy
B)Flowcharting
C)Expectancy theory
D)All of the above

Question 9

Which of the following statements is true?

A)A bank is unlikely to benefit from e-business.
B)In a university, the costs of e-business usually exceed the benefits.
C)Both A and B are true.
D)Neither A nor B is true.

Question 10

Which of the following statements about B2B e-business is most true?

A)Companies engaged in B2B can benefit from the COSO internal control and enterprise risk management frameworks.
B)Companies engaged in B2B must be at Level Three of the capability maturity model.
C)The weighted-rating technique is irrelevant to companies engaged in B2B.
D)Expansion into B2B is based on requirements analysis, the first step in the systems development life cycle.

Question 11

Costs associated with e-business include:

A)Financial costs associated with setting up networks.
B)Need to develop different, better internal control systems.
C)Potential for customer distrust.
D)All of the above.

Question 12

Consider the following flowcharting shapes as you answer the next question: SBL Corporation is preparing to expand into B2B e-business. In a flowchart of their sales process, "take order via Web site" is most likely to be represented with:

A)Symbol A
B)Symbol B
C)Symbol C
D)Symbol D

Question 13

A modular information technology designed to provide comprehensive information about a company is called:

A)An enterprise resource planning system.
B)A spreadsheet.
C)A risk management plan.
D)The accounting cycle.

Question 14

The CEO and CFO of TNS Corporation wanted to expand into e-business, but the company's board of directors was unwilling to approve their plan. Which of the following theories will best help the CEO and CFO persuade the board of directors to support their idea?

A)Capability maturity model
B)Systems development life cycle
C)Expectancy theory
D)COSO enterprise risk management framework

Question 15

WebTrust and SysTrust can be incorporated into an organization's:

A)Internal control plan
B)Enterprise risk management plan
C)Both A and B
D)Neither A nor B

Question 16

When the Internal Revenue Service encourages taxpayers to submit forms electronically, it is engaging in which form of e-business?

A)B2C
B)G2C
C)C2C
D)B2B

Question 17

The central feature of e-business is:

A)Transacting business over a computer network.
B)Using XBRL for required SEC filings.
C)Implementing general ledger software.
D)Ensuring that the company is no lower than Level 3 on the capability maturity model.

Question 18

SBL Corporation is preparing to expand into B2B e-business. It is least likely to need which of the following database tables as part of its network?

A)Customer
B)Employee
C)Business
D)Order

Question 19

TNS Corporation had been doing business via traditional brick-and-mortar methods for many years, then decided to expand into e-business. Based on the benefits and costs of e-business listed in the text, which of the following numbers is likely to increase?

A)Sales
B)Profits
C)Prepaid assets
D)Retained earnings

Question 20

In which module of an ERP system would you expect to find the most detailed information about purchase orders?

A)Customer relationship management
B)Human resource management
C)Supply chain management
D)Financial management

Question 21

Umble and Umble suggested six necessary conditions for a successful ERP implementation. Expectancy theory can be useful in achieving all of the following conditions except:

A)Obtaining organizational commitment.
B)Viewing ERP as an enterprise-wide venture.
C)Resolving multisite issues.
D)Ensuring data accuracy.

Question 22

Expectancy theory is most likely to be helpful in addressing which of the following common causes of ERP implementation failure?

A)Poor leadership from top management
B)Automating existing redundant processes
C)Inaccurate data in the system
D)Significant technical difficulties

Question 23

An organization is at the "chaotic" level of the capability maturity model. If it attempts to implement an ERP system, which of the following is most likely to cause the implementation to fail?

A)A bad match between ERP software and organizational processes.
B)Significant technical difficulties.
C)Both A and B.
D)Neither A nor B.

Question 24

Consider the following short case as you respond to the next question: Scott and Logan are the CEO and CFO of MLN Corporation. The firm has lately been losing customers to MLN's competitors; Scott and Logan believe an ERP system could help MLN obtain more timely information that will enable them to retain old customers and acquire new ones. They formed a six-person team with representatives from three of MLN's ten departments and instructed them to use the steps in the systems development life cycle to choose and implement an ERP system. A year later, the team had completed its work and implemented the system by transferring data from MLN's general ledger software to the ERP system.Umble and Umble suggested six necessary conditions for a successful ERP implementation. Which of the following statements is most true?

A)Forming a six-person team ensures that ERP will be seen as an enterprise-wide venture.
B)Resolving multi-site issues may not have been an issue for MLN.
C)Both A and B are true.
D)Neither A nor B is true.

Question 25

Consider the following short case as you respond to the next question: Scott and Logan are the CEO and CFO of MLN Corporation. The firm has lately been losing customers to MLN's competitors; Scott and Logan believe an ERP system could help MLN obtain more timely information that will enable them to retain old customers and acquire new ones. They formed a six-person team with representatives from three of MLN's ten departments and instructed them to use the steps in the systems development life cycle to choose and implement an ERP system. A year later, the team had completed its work and implemented the system by transferring data from MLN's general ledger software to the ERP system.Umble and Umble suggested six necessary conditions for a successful ERP implementation. Which of them was best achieved in the case?

A)Communicating strategic goals clearly.
B)Viewing ERP as an enterprise-wide venture.
C)Ensuring data accuracy.
D)All of the above.

Question 26

Please consider the following short case as you respond to the next question: Sue and Sally are partners in a small local bakery specializing in wedding and birthday cakes. They use a simple Excel spreadsheet to record journal entries and prepare financial statements and tax returns. Robert, the owner of a consulting company that installs and maintains ERP systems, has recently approached them about the possibility of implementing an ERP system in their operations. If they accept his offer, Robert will provide a series of online tutorials to help them learn about the new system. Sue and Sally believe the implementation of the ERP system will make it easier for them to borrow money to expand the bakery.Which of the following best pairs a fact from the case with an appropriate cause of ERP system failures?

A)Sue and Sally are partners in a small local bakery; poor leadership from top management
B)They use a simple Excel spreadsheet; inadequate training and education
C)The ERP system will make it easier for them to borrow money; unrealistic expectations
D)All of the above

Question 27

SPL Corporation is an information technology consulting firm with offices in six states. In implementing an ERP system for its own use, management should be careful to:

A)Resolve multisite issues.
B)Select a compatible ERP system.
C)Both A and B
D)Neither A nor B

Question 28

Which modules in an ERP system are likely to contain information about a company's plant assets?

A)Supply chain management
B)Financial management
C)Both A and B
D)Neither A nor B

Question 29

Please consider the following short case as you respond to the next question: Sue and Sally are partners in a small local bakery specializing in wedding and birthday cakes. They use a simple Excel spreadsheet to record journal entries and prepare financial statements and tax returns. Robert, the owner of a consulting company that installs and maintains ERP systems, has recently approached them about the possibility of implementing an ERP system in their operations. If they accept his offer, Robert will provide a series of online tutorials to help them learn about the new system. Sue and Sally believe the implementation of the ERP system will make it easier for them to borrow money to expand the bakery.Which of the following best pairs a fact from the case with an appropriate cause of ERP system failures?

A)The company is a small local bakery; a bad match between ERP software and organizational processes.
B)Sue and Sally are partners; poor leadership from top management
C)Both A and B
D)Neither A nor B

Question 30

Please consider the following short case as you respond to the next question: Sue and Sally are partners in a small local bakery specializing in wedding and birthday cakes. They use a simple Excel spreadsheet to record journal entries and prepare financial statements and tax returns. Robert, the owner of a consulting company that installs and maintains ERP systems, has recently approached them about the possibility of implementing an ERP system in their operations. If they accept his offer, Robert will provide a series of online tutorials to help them learn about the new system. Sue and Sally believe the implementation of the ERP system will make it easier for them to borrow money to expand the bakery.Based on the information in the case, all parties need to be concerned with which of the following common causes of ERP implementation failure?

A)Inaccurate data in the system
B)Unrealistic expectations
C)Both A and B
D)Neither A nor B

Question 31

As a processing tool in an accounting information system, ERP software is capable of generating outputs in the form of general-purpose financial statements. Which of the following statements is most true?

A)The financial management module alone contains all the information a company needs to produce its financial statements.
B)All four common ERP system modules provide information to the general purpose financial statements.
C)A company needs to create a fifth module called "financial statement creation" if it wants to use an ERP system to create its financial statements.
D)None of the above statements is true.

Question 32

Common causes of ERP implementation failure include:

A)Poor leadership from top management.
B)Unrealistic expectations.
C)Both A and B.
D)Neither A nor B.

Question 33

RVW Corporation uses an enterprise resource planning system. An accountant wants to create a report of the last month's sales sorted by client that also includes the name of the salesperson who assisted with each transaction. Which modules of the ERP system will provide the relevant information?

A)Customer relationship management and financial management
B)Human resource management and financial management
C)Customer relationship management and human resource management
D)Such a report cannot be generated from the ERP system.

Question 34

Modules in an ERP system that contain information about inventory include all the following except:

A)Customer relationship management
B)Human resource management
C)Supply chain management
D)Financial management

Question 35

RVW Corporation uses an enterprise resource planning system. An accountant wants to create a report of the last month's purchases sorted by vendor that also includes the name of the purchasing agent who assisted with each transaction. Which modules of the ERP system will provide the relevant information?

A)Supply chain management and human resource management
B)Supply chain management and customer relationship management
C)Customer relationship management and supply chain management
D)Such a report cannot be generated from the ERP system.

Question 36

Umble and Umble suggested six necessary conditions for a successful ERP implementation. Which of the conditions is most clearly related to the "internal environment" component of the COSO frameworks on internal control and enterprise risk management?

A)Obtain organizational commitment.
B)Ensure data accuracy.
C)Select a compatible ERP system.
D)All of the above.

Question 37

Please consider the following short case as you respond to the next question: Sue and Sally are partners in a small local bakery specializing in wedding and birthday cakes. They use a simple Excel spreadsheet to record journal entries and prepare financial statements and tax returns. Robert, the owner of a consulting company that installs and maintains ERP systems, has recently approached them about the possibility of implementing an ERP system in their operations. If they accept his offer, Robert will provide a series of online tutorials to help them learn about the new system. Sue and Sally believe the implementation of the ERP system will make it easier for them to borrow money to expand the bakery.If Sue and Sally accept Robert's proposal, which of the following common causes of ERP implementation failure is likely to be the most serious?

A)Poor leadership from top management
B)Significant technical difficulties
C)Inadequate education and training
D)None of the above. Since the company is so small, the ERP project is likely to succeed.

Question 38

Which of the following are conditions commonly associated with a successful ERP implementation?

A)Obtaining organizational commitment
B)Communicating strategic goals clearly
C)Both A and B
D)Neither A nor B

Question 39

An ERP system is a sophisticated form of relational database software; within each module, data are stored in tables. In which modules would you expect to find "employee ID" as a field in one or more tables: (i) customer relationship management, (ii) human resource management, (iii) supply chain management.

A)I and II only
B)I and III only
C)II and III only
D)I, II and III

Question 40

TNG Corporation implemented an ERP system using the steps in the systems development life cycle. Which of the following statements is most true?

A)The systems development life cycle is an inappropriate tool for implementing an ERP system.
B)TNG is unlikely to suffer from poor project management.
C)Top management leadership is unnecessary when a company uses the systems development life cycle.
D)TNG can omit requirements analysis as a step in the systems development life cycle.

Question 41

With respect to an ASP, service interruptions and compromised data would be most effectively addressed with:

A)An enterprise risk management plan.
B)A systems flowchart.
C)The steps in the accounting cycle.
D)The capability maturity model.

Question 42

Both e-business and ASPs can provide benefits for organizations. Which of the following best pairs a potential benefit of e-business with a potential benefit of using an ASP?

A)Quicker service delivery, increased flexibility
B)Geographic market expansion, role in disaster recovery plans
C)Quicker service delivery, role in disaster recovery plans
D)Geographic market expansion, reduced consequences for technology breakdowns

Question 43

Enterprise resource planning systems are a sophisticated form of relational database technology; one common ERP system module is supply chain management. Organize the field names below into four tables you would expect to find in an ERP system's supply chain management module. Indicate primary keys by underlining and foreign keys with brackets; ensure that each table is in 3NF.Beginning date
Beginning units on hand
Cost per unit of beginning inventory
Cost per unit purchased
Employee ID
Item description
Item number
Location of supplier
Purchase order number
Quantity purchased
Supplier name
Transaction date

Question 44

According to the table presented in the text, which major form of e-business describes each of the following:
A. Dell Computers
b. eBay
c. EDGAR
d. Internal Revenue Service
f. Travelocity

Question 45

TWR Corporation attempted to implement its first ERP system using the systems development life cycle, but the project was deemed a failure. Some of the actions that led to the failure are listed below. For each one, indicate the major cause of ERP implementation failure suggested by Umble and Umble that most clearly applies. Do not use any major cause more than once.
A. Employees using the ERP system were expected to learn how to use the system after it was operational.
B. Employees who input information to the system made errors.
C. Only employees from the information systems department were on the project team.
D. The company president missed most of the planning meetings.
E. The ERP project team leader predicted a 90% reduction in information technology costs after the system was implemented.
F. The project team leader promised that no-one would lose their job as a result of ERP system implementation.
G. The project team skipped steps in the systems development life cycle.
H. The system implemented could not be customized for TWR's operations.
I. TWR continued to rely on paper-based forms and spreadsheet software to track inventory.j. TWR's existing computers could not run the software fast enough.

Question 46

Enterprise resource planning systems are a sophisticated form of relational database technology; one common ERP system module is customer relationship management. Create database specifications (table names and field names) for three tables you would expect to find in an ERP system's customer relationship management module. At least one of the tables must be a junction table. Indicate primary keys by underlining and foreign keys with brackets; ensure that each table is in 3NF.

Question 47

The chapter discussed five types of ASPs:
(a) enterprise,
(b) local / regional,
(c) specialist,
(d) vertical market and
(e) volume business.
Which of the five types best describes each of the following:

Question 48

Both e-business and ASPs create risks and costs for organizations. Which of the following best pairs a potential cost of e-business with a potential risk of using an ASP?

A)Potential for customer distrust, inability to pay monthly fees
B)Financial costs associated with setting up networks, reduced flexibility
C)Potential for customer distrust, psychological & behavioral factors
D)Financial costs associated with setting up networks, psychological & behavioral factors

Question 49

Organizations that implement ERP systems bear the risk of project failure for a variety of reasons, one of which is inadequate education and training. Complete the table below to develop an enterprise risk management plan that addresses that risk. Internal environment: top management demonstrates supportRisk response: ReduceControl activities: Plan specific training workshops.Information & communication: Publicize the plan in newslettersMonitoring: Assess employee knowledge before and after tr

Question 50

As a form of internal control, a SAS 70 audit is least likely to address which of the following risks associated with ASPs?

A)Compromised data
B)Inability to pay monthly fees
C)Financial costs associated with setting up a computer network
D)Cost of purchasing software

Question 51

A third-party entity that deploys, hosts and manages access to a packaged application is called an:

A)Enterprise resource planning consultant
B)Application service provider
C)Enterprise service provider
D)Application service planning consultant

Question 52

An ASP specializes in software applications for government agencies. It is best described as which type of ASP?

A)Enterprise
B)Vertical market
C)Volume business
D)Application

Question 53

PLM Corporation was preparing to implement its first ERP system. Several actions taken by the ERP project team to promote the project's success are listed below. Which of Umble and Umble's six conditions for successful ERP implementation best describes each one?
A. Asked internal auditors to review the work of employees who input data to the system
b. Conducted focus groups with selected employee groups to address concerns
c. Ensured that PLM's wireless network adequately connected all of its offices throughout the United States
d. Included employees from all departments on the ERP project team
e. Incorporated echo checks as a form of internal control to reduce employee mistakes
f. Interviewed company executives to determine if they truly supported the project
g. Published a monthly newsletter on the role of the ERP system in improving competitiveness
h. Set up demonstrations to show employees how the ERP system would allow them to get better information more quickly
i. Solicited suggestions from all employees about how to improve business processes
j. Visited similar companies to learn about their experiences with ERP software

Question 54

Fill in the blanks below based on the benefits and costs of e-business discussed in the chapter.
A. ___ markets
b. Financial costs associated with ___
c. Geographic ___
d. More ___ marketing
e. Need to develop different ___ systems
f. Potential for ___
g. Quicker ___ delivery
h. Reduced ___
i. Severe consequences for ___
j. Streamlined ___
A. hard to reachb. setting up networksc. market expansiond. targetede. internal controlf. customer distrustg. product and serviceh. operating costsi. technology breakdownsj. operations

Question 55

Indicate one ERP module where you would expect to find information about each of the following items.
A. Accrued vacation time
b. All transactions affecting cash
c. Chart of accounts
d. Client name
e. Date of last inventory purchase
f. Pension plan data
g. Projected profits
h. Sales history
i. Shareholder names and addresses
j. Vendor quality ratings

Question 56

Reliable Reminder Services is a small company that, for a fee, assists its clients in remembering important dates, purchasing and sending greeting cards and providing specialized shopping services for occasions like birthdays and anniversaries. The company's owners want to use an application service provider to develop and host a web page that will help them attract new clients. They completed the following steps to select an ASP: Choose an ASP from the finalists. Conduct in-house interviews. Contact references provided by finalists. Develop request for proposals from ASPs. Evaluate submitted proposals. Negotiate a contract with the selected ASP. Select top five proposals. Select top three proposals. Send thank you letters to rejected ASPs. Send the original contract to the ASP; retain an electronic copy in the database. Put the steps in order and prepare a systems flowchart of the ASP selection process; assume that all steps occur in the same department. Ensure that your flowchart conforms to the principles discussed in the text.

Question 57

Consider the following short case as you respond to the next question: Scott and Logan are the CEO and CFO of MLN Corporation. The firm has lately been losing customers to MLN's competitors; Scott and Logan believe an ERP system could help MLN obtain more timely information that will enable them to retain old customers and acquire new ones. They formed a six-person team with representatives from three of MLN's ten departments and instructed them to use the steps in the systems development life cycle to choose and implement an ERP system. A year later, the team had completed its work and implemented the system by transferring data from MLN's general ledger software to the ERP system.Umble and Umble suggested six necessary conditions for a successful ERP implementation. Which of the following is most closely related to communicating strategic goals clearly?

A)The firm has lately been losing customers to MLN's competitors.
B)They formed a six-person team.
C)A year later, the team had completed its work.
D)Use the steps in the systems development life cycle.

Question 58

SAS 70 is a form of ___ with respect to an ASP.

A)internal control
B)information technology
C)Both A and B
D)Neither A nor B

Question 59

Consider the following short case as you respond to the next question: Scott and Logan are the CEO and CFO of MLN Corporation. The firm has lately been losing customers to MLN's competitors; Scott and Logan believe an ERP system could help MLN obtain more timely information that will enable them to retain old customers and acquire new ones. They formed a six-person team with representatives from three of MLN's ten departments and instructed them to use the steps in the systems development life cycle to choose and implement an ERP system. A year later, the team had completed its work and implemented the system by transferring data from MLN's general ledger software to the ERP system.Umble and Umble suggested six necessary conditions for a successful ERP implementation. Which of the following pieces of advice is most applicable to MLN?

A)Form a smaller implementation team.
B)Ensure that the implementation team has wider representation.
C)Both A and B.
D)Neither A nor B.

Question 60

A corporation hired an ERP consultant to recommend an ASP for its payroll processing. In a systems flowchart of the payroll process, which of the following is most likely to be outside the system boundary?

A)ERP consultant
B)ASP
C)Both A and B
D)Neither A nor B

Question 61

CSB Corporation has used traditional general ledger software to maintain its accounting records. However, the company is now growing and needs more sophisticated information technology that will provide more comprehensive information for running the firm. Recommend a form of information technology that will meet CSB's need; describe the basic nature, purpose and structure of the IT you recommend.

Question 62

Bumble Beasley runs a medium-sized consulting firm with offices throughout the United States and Europe. For the past several years, the firm has provided continuing education to its 500 employees via monthly seminars in various locations. But, travel costs are becoming prohibitively expensive, leading Bumble to look for other ways to provide continuing education. Bumble has contacted Training Services Unlimited, an application service provider that specializes in delivering Web-based training on various topics to professional services firms.What type of ASP is Training Services Unlimited? What are the advantages and disadvantages of using their services? Discuss the nature and value of a SAS 70 audit within the context of this case.

Question 63

List and briefly discuss five major forms of e-business.

Question 64

JRS Corporation attempted to install an enterprise resource planning system with very poor results. The project took significantly longer than expected; actual costs exceeded budgeted costs by a significant margin. In addition, the system has been poorly utilized because it was never completed. The management of JRS has hired you to bring the project to a successful completion.Write a letter to management explaining three common causes of ERP implementation failure; also make four recommendations that will help them be more successful with the implementation now.

Question 65

Jose is an artist specializing in family portraits. Although his business started as a traditional "brick and mortar" enterprise, he is now interested in expanding into e-business. He has hired you as a consultant; explain four changes Jose is likely to see if he expands into the e-business arena.