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

Question 1

The value of IT investments often depend on the level of complementary resources, which can change over time.

Answer 1

True

Question 2

Supply chain management systems are an example of Network IT.

Answer 2

False

Question 3

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

Answer 3

All are descriptions of the balanced scorecard

Question 4

The balanced scorecard management process starts with the Formulate step.

Question 5

Which of the following is not a general type of business process found on generic strategy maps?
A. Innovation processes
B. Administrative processes
C. Operations management processes
D. Customer management processes

Question 6

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

Question 7

Which of the following is not a balanced scorecard perspective?
A. Stakeholder
B. Financial
C. Business process
D. Customer

Question 8

Which of the following is not included in Information Capital as described in the balanced scorecard learning and growth perspective?
A. IT Infrastructure
B. Employees' abilities to use technology
C. Intangible assets
D. Applications

Question 9

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

Question 10

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

Question 11

A strategy map depicts the cause and effect relationship between objectives across the balanced scorecard perspectives.

Question 12

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

Question 13

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

Question 14

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

Question 15

Investments in business analytics systems support the balanced scorecard management process during the Link to Operations step.

Question 16

Besides presenting financial performance information to shareholders, the financial perspective provides information that can confirm the success of investments in learning and growth.

Question 17

In the business process perspective, the firm describes its objectives for improvements in tangible and intangible infrastructure.

Question 18

The balanced scorecard framework describes performance from four different perspectives based on the firm's strategy to achieve shareholder value.

Question 19

The balanced scorecard only includes quantitative measures.

Question 20

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.

Question 21

Which of the following best represents the sequence of steps in the Balanced Scorecard management process?
A. Plan, Design, Implement, Maintain, Adjust.
B. Strategize, Develop, Measure, Report, React.
C. Formulate, Translate, Link to Operations, Monitor, Adapt.
D. Analyze, Plan, Develop Strategy Map, Measure, Adapt.

Question 22

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.

Question 23

Which of the following is not considered a component of information capital?
A. Applications.
B. Computing hardware.
C. Supervision.
D. Infrastructure.

Question 24

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

Question 25

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.

Question 26

Which of the following is the best reason that companies find it hard to assess the benefit of IT investments?
A. Difficult to assess costs
B. Difficult to tie IT investments to company strategy
C. IT investments become embedded in business processes
D. None of the above

Question 27

Which of the following is not a typical activity a firm will undertake when linking the Balanced Scorecard to operations?
A. Prioritize business process improvements.
B. Develop capital and other long-term budgets.
C. Develop key performance indicators.
D. Establish necessary IT systems.

Question 28

Which of the following best describes a strategy map?
A. A strategy map is a categorized list of a firms strategic objectives, critical success factors (CSFs), and key performance indicators (KPIs).
B. A strategy map is a collection of all a firm's activity and structure model diagrams.
C. A strategy map is a visual representation of a firm's current and planned geographic operations and markets.
D. A strategy map is a one-page representation of a firm's strategic priorities and the cause-and-effect linkages among them.

Question 29

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.

Question 30

Val IT is similar to the Balanced Scorecard in what sense?
A. It is linked closely to the use of strategy maps.
B. It requires firms to define value in terms of the firms' strategic objectives.
C. IT governance is a key focus area.
D. The VAL IT plan should fit on one page.

Question 31

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.

Question 32

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.

Question 33

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.

Question 34

Which of the following is not one of the Val IT implementation steps?
A. Assess the organization's readiness to undertake IT business value management.
B. Recognize problems with prior IT investments.
C. Develop a technology portfolio plan.
D. Take action.
E. Define characteristics of the ideal future state.

Question 35

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.

Question 36

Which of the following is not an example of Enterprise IT?
A. Spreadsheet financial applications
B. Business intelligence systems
C. CRM systems
D. ERP systems

Question 37

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.

Question 38

Val IT distinguishes among several main categories of firm initiatives. Which of the following is not one of those categories?
A. Portfolios.
B. Programs.
C. Plans.
D. Projects.

Question 39

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.

Question 40

Which of the following is not a step in the balanced scorecard management process?
A. Invest
B. Translate
C. Monitor
D. Adapt