Deck 4: Business Process and It Outsourcing

Question 1

Many organizations contract with service providers to handle their complete services such as accounting and finance,customer services,human resources,and research and development.This is known as _____.

A)vertical integration
B)business process outsourcing
C)outbound telemarketing process
D)horizontal integration

Answer 1

B

Question 2

When the people of an organization doing the work for another organization are located in another country,the arrangement is called _____.

A)horizontal integration
B)business unit sponsoring
C)offshore outsourcing
D)functional decomposition

Answer 2

C

Question 3

Organizations that outsource to other firms also lay off portions of their own staff as part of outsourcing.People lose their jobs as their work has been outsourced to a different firm at lower wages.The employees become bitter and nonproductive after such layoffs.Identify the issue associated with outsourcing that affects an organization's positives in such cases.

A)Payroll issues
B)Employee morale
C)Legal issues
D)Security breach

Answer 3

B

Question 4

_____ is an arrangement in which one company contracts with another organization to provide services that could be provided by company employees.

A)Outsourcing
B)Scaling
C)Marketing
D)Manufacturing

Question 5

Which of the following is true about a core business process?

A)It requires an organization's workers to possess unique knowledge and skills.
B)It has a direct impact on the organization's infrastructure.
C)It is easy for competitors to imitate the process.
D)It decelerates a product's time to market.

Question 6

_____ frees up a large amount of resources and management effort that can be redirected to other more strategic issues within an organization.

A)Advertising
B)Bootstrapping
C)Outsourcing
D)Liquidating

Question 7

Which of the following is a true statement?

A)Organizations that do not outsource probably have greater recruiting expenses than outsourcing organizations.
B)Organizations that do not outsource have lesser cost of production than outsourcing organizations.
C)Organizations that do not outsource have lesser marketing and deployment expenses than outsourcing organizations.
D)Organizations that do not outsource pay more tax than outsourcing organizations.

Question 8

Identify the termination clause that breaks the outsourcing agreement irreparably and defeats the purpose of making the contract in the first place.

A)Termination for failure to meet service and performance levels
B)Termination for material breach of contract
C)Termination for convenience
D)Termination for financial crises

Question 9

A(n)_____ in an outsourcing agreement defines the conditions under which either party may exit the outsourcing relationship.

A)termination clause
B)balance sheet
C)offer document
D)defense agreement

Question 10

ScanX is a digital media organization.One of the organization's key business strategies is to launch online courses for high schools.The organization works to develop the platform for the online course on a time constraint.ScanX decides to outsource the launch of the product to clients in various nations so that it can meet the deadline.Which of the following would be the most appropriate reason for ScanX to outsource?

A)To accelerate the product's time to market
B)To increase product deployment expenses
C)To increase marketing expenses on the core operation
D)To reduce the revenues and tax expenses

Question 11

Identify the termination clause that allows an organization to unilaterally terminate an outsourcing contract at any time with or without giving a reason.

A)Termination for failure to meet service and performance levels
B)Termination for material breach of contract
C)Termination for convenience
D)Termination for financial crises

Question 12

The core business process of a locomotive firm is designing engines.It outsources the production of automobile bodies and several of its parts to different organizations in South Africa and South Asia.Which of the following could be the most appropriate reason for the locomotive firm to outsource?

A)To increase marketing expenses on the core operation
B)To decelerate the product's time to the market
C)To increase the product's deployment expenses
D)To focus on the firm's main operations

Question 13

Bersk,a brewing company,entered into a three-year contract with Seins Inc.According to the contract,Seins Inc.will package and market the beverages produced by Bersk.This is an example of _____.

A)liquidating
B)outsourcing
C)amalgamating
D)conglomerating

Question 14

Which of the following organizations outsources its work?

A)Lenc Inc.is a chain of stores that sells home appliances and is spread across the United States.Goods not available in one of its stores can be procured from its other stores.
B)Zeta Inc.supplies raw materials to Clips&Hangers,a soap and detergent manufacturing organization.
C)Lusach Dine entered into a two-year contract with Soy&Cream for procuring its dairy products.
D)Ace Healthcare entered into a five-year contract with Masters Inc.to take care of Ace Healthcare's recruiting process and insurance policies.

Question 15

_____ provides valuable customer benefits,is hard for competitors to imitate,has a direct impact on the organization's customers,is a major cost driver,is essential for providing services,and can be leveraged widely across many products and markets.

A)Physical capital
B)A core business process
C)A retail price index
D)Sequential sampling

Question 16

A firm in the United States hired experienced software engineers from Japan and Korea for $20 per hour,whereas they hired software engineers from the United States for $180 per hour.The engineers in Japan and Korea couldn't discuss and share their views with the project leaders as freely as the employees in the United States.A project took four months longer than expected to complete.What could be the most appropriate reason for the delay in the project?

A)Difficulty in communication of goals and needs due to the language barrier
B)Difficulty in transferring the payroll
C)Difficulty in understanding machine language
D)Difficulty in providing the same labor status as the engineers in the US to the engineers from Japan and Korea

Question 17

Heinsert Inc.is a computer manufacturing firm.Its core business process is the production of efficient processors and storage disks.It outsources the manufacturing of its computer screen to a camera and lens manufacturing firm called Zetax,which is highly efficient and has world-class capabilities.Identify the most appropriate reason why Heinsert outsources its computer screen production.

A)To increase the marketing expenses on its core operation
B)To upgrade its products' capabilities and services
C)To increase the revenue of its products
D)To decelerate the products' time to market

Question 18

Which termination clause allows an organization to end the outsourcing agreement and go to court to collect compensation for the damages caused?

A)Termination for convenience
B)Termination for financial crises
C)Termination for failure to meet service and performance levels
D)Termination for material breach of contract

Question 19

Which of the following is true about outsourcing?

A)Organizations outsource to reduce the money spent on tax and revenue.
B)Organizations outsource to decelerate a product's time to market.
C)Organizations outsource to increase production cost.
D)Organizations outsource to improve their focus on core operations.

Question 20

Icarus Inc.manufactures fighter planes for the government.It made a strategic decision to outsource the production of wings and turbines to another firm for the purpose of reducing production cost and development time by two years.However,the outsourcing provider developed the planes' wings and turbines using low-grade material,which led to Icarus Inc.losing its contract with the government.The loss of time and revenue was non-amendable and the company was closed down eventually.Which of the following issues associated with outsourcing best describes the cause of Icarus Inc.shutting down?

A)Security breaches
B)Legal issues
C)Quality problems
D)Employee morale

Question 21

Identify a component of platform as a service (PaaS)in a cloud computing environment.

A)A virtual machine
B)Bluetooth
C)A network device
D)An operating system

Question 22

City-mart,a supermarket chain,used to outsource its logistics service.Over a period of time,the company discovered an irregularity in the amount of products delivered and the payments collected for those products.It was found that the systems for payment acceptance and logistics were breached by a foreign agent in the firm,which led to the termination of the outsourcing contract by City-mart.Which of the following would be the most appropriate issue related to outsourcing in this scenario?

A)Negative impact on customer relationships and satisfaction
B)Data security and integrity issues
C)Vertical integration
D)Horizontal integration

Question 23

Serios is a software development firm in Canada.It creates an application to guide the development of Maglev trains in Mexico City and outsources the design and maintenance of the application to Ieinsta Inc.in Mexico City.The contract between the firms requires Ieinsta Inc.to use only the software provided by Serios.Ieinsta Inc.has to access the software remotely as a Web-based service.Identify the type of service provided by Serios in this scenario.

A)Infrastructure as a service
B)Software deployment service
C)Platform as a service
D)Software as a service

Question 24

_____ is a software delivery approach in which an organization outsources the equipment used to support its data processing operations,including servers,storage devices,and networking components.

A)Infrastructure as a service
B)Software as a service
C)Service portfolio management
D)Enterprise application management

Question 25

_____ is a public cloud computing approach that provides users with a computing platform,which includes an operating system,a programming language execution environment,database services,and a Web server.

A)Software as a service
B)Platform as a service
C)Security as a service
D)Backend as a service

Question 26

Which of the following is true about public cloud computing?

A)It is expensive.
B)It is less secure.
C)It is relatively slow.
D)It is less agile.

Question 27

Valley Inc.is a Texas-based firm that develops applications for heavy machinery.The major part of coding and development is outsourced to Rousc Inc.,in North Korea.As per the contract,Valley Inc.provides Rousc Inc.with the programming language execution environment,database services,and a Web server.Rousc Inc.also gets to control the application's deployment and configuration settings.Which type of service does Valley Inc.provide?

A)Forward market integration service
B)Software as a service
C)Platform as a service
D)Reverse market integration service

Question 28

Quake Inc.,a software giant,outsources its customer relationship management amenity to Zeins Inc.The contract between the two firms requires Zeins Inc.to exclusively use tools supplied by Quake Inc.and also makes Zeins responsible for the maintenance of the tools.Identify the type of service in the above scenario.

A)Platform as a service
B)Vertical integration
C)Infrastructure as a service
D)Horizontal integration

Question 29

_____ allows a service provider organization to own and manage the infrastructure (including computing,networking,and storage devices)with tenant organizations by accessing slices of shared hardware resources via the Internet.

A)Voluntary liquidation
B)Public cloud computing
C)Vertical market integration
D)Service portfolio

Question 30

Which public cloud computing approach allows the user to create an application or service using tools and/or libraries from the provider and control software deployment and configuration settings?

A)Platform as a service
B)Software as a service
C)Autonomic computing
D)Service portfolio management

Question 31

Identify a component of infrastructure as a service (IaaS)cloud computing.

A)A network device
B)A laptop
C)A smartphone
D)A database

Question 32

Xsis Inc.is an information technology (IT)and services company.It used to outsource its technical support calls to a company located in a Southeast Asian country.Xsis Inc.started receiving a lot of complaints from customers on language difficulties and delays in reaching senior technicians when speaking to support personnel.The reduction in the volume of calls for its services led Xsis Inc.to terminate its outsourcing contract.Identify the appropriate issue related to outsourcing that led Xsis Inc.to terminate its contract with the company in Southeast Asia.

A)Employee morale
B)Technical and legal issues
C)Negative impact on customer relationships and satisfaction
D)Data security and integrity issues

Question 33

Which of the following is a component used by a cloud user in a cloud computing environment?

A)A storage device
B)A web server
C)An operating system
D)A smartphone

Question 34

A healthcare organization in Canada outsources its insurance work to a service provider in South Asia.The employees in South Asia used to receive less than half the salary that the employees in Canada received.But in recent years,there has been a rapid increase in employees' salaries in South Asia.Slowly,the healthcare organization is reducing the level of outsourcing and is employing people in Canada.Which of the issues associated with offshore outsourcing describes the above scenario?

A)Diminishing cost advantages
B)Important technology issues
C)Frictional unemployment issues
D)Data privacy and integrity issues

Question 35

A firm in the United States outsources its technical support to a firm in South Asia.The technical support firm collects customers' personal data and submits them to the service provider.However,a customer would not want information about him or her to be available to others without his or her approval.Identify the issue associated with offshore outsourcing that would arise if the service provider is not particularly careful to ensure it has control over who has access to their data.

A)Diminishing cost advantages
B)Tax evasion
C)Data privacy
D)Jurisdiction

Question 36

Which of the following software delivery approaches provides users remote access to software as a Web-based service?

A)Application deployment approach
B)Software deployment approach
C)Software as a service
D)Platform as a service

Question 37

Identify an advantage of the software as a service (SaaS)approach in public cloud computing.

A)The user can create an application using tools and libraries from the provider.
B)The user handles software maintenance and upgrading features.
C)The user controls software deployment and configuration settings.
D)The user does not need to purchase and install additional hardware to provide increased capacity.

Question 38

_____ enables application developers to develop,test,and run their software solutions on a cloud platform without the cost and complexity of buying and managing the underlying hardware and software.

A)Autonomic computing
B)Service portfolio management
C)Platform as a service
D)Security as a service

Question 39

Which of the following can be a faster,cheaper,and more agile approach to build and manage an information technology (IT)infrastructure?

A)Public cloud computing
B)Service portfolio management
C)Fixed term contract
D)Enterprise application integration

Question 40

Which of the following would be the most appropriate solution for organizations whose computing needs vary greatly depending on changes in demand?

A)Vertical market integration
B)Private cloud computing
C)Public cloud computing
D)Horizontal market integration

Question 41

Core processes have a direct impact on an organization's customers,are major cost drivers,and are essential for providing services.

Question 42

The Statement on Standards for Attestation Engagements 16 (SSAE 16)is a regulation created by the Auditing Standards Board (ASB)of the American Institute of Certified Public Accountants (AICPA).What does it define?

A)It defines the method in which service companies must report on their compliance controls.
B)It defines the knowledge and skills required to operate core processes effectively.
C)It defines the integration of public and private clouds through networking.
D)It defines the issues faced by an organization integrating with a cloud computing environment.

Question 43

Who participates in the conflict resolution process for resolving any issues in an outsourcing agreement?

A)The service-level agreement manager
B)The executive employment agreement manager
C)The chief executive officer
D)The human resource officer

Question 44

The fundamental costs of doing business in a developing country are higher than those in a developed country.

Question 45

Which of the following types of clouds is integrated through networking and is composed of both private and public clouds?

A)Symmetric cloud
B)Grid cloud
C)Hybrid cloud
D)Asymmetric cloud

Question 46

A _____ is a high-level,summary document that defines both the services and the performance and availability levels at which those services will be provided by a service provider to an organization.

A)customer service agreement
B)product-level contract
C)service-level agreement
D)research and analysis service document

Question 47

Which of the following challenges is faced by organizations that are moving toward the cloud computing environment?

A)Hidden costs
B)Flexible user support
C)Less than expected downtime
D)Invisible system complexity

Question 48

What does the Type 2 Statement on Standards for Attestation Engagements 16 (SSAE 16)evaluate?

A)It reports on the issues faced by an organization integrating with cloud computing environment.
B)It reports on the suitability of the design of the controls of a service provider over a period of time.
C)It reports on the fairness of the presentation of management's description of a service organization's system.
D)It reports on the upfront infrastructure costs of a firm and on projects that differentiate their core business process.

Question 49

Why was the International Standard on Assurance Engagements (ISAE)No.3402,Assurance Reports on Controls at a Service Organization developed?

A)To provide an international assurance standard for allowing public accountants to issue a report for use by user organizations
B)To provide an international standard for measurements and to keep a check on the proper usage of the metric system
C)To provide an international standard and code of conduct for the protection of corporate data,copyrights,patents,and trade secrets
D)To provide an international assurance standard for the confidentiality of customer data and retaining the ownership of all data submitted to the service provider

Question 50

Outsourcing service providers have a higher cost structure due to greater economies of scale,specialization,or expertise.

Question 51

Which of the following processes defines periodic formal reviews between the outsourcing company and its service provider and explicit escalation procedures in the event of a disagreement?

A)A service-level agreement
B)Smart sourcing
C)Governance process
D)A research and analysis process

Question 52

What does the Type 1 Statement on Standards for Attestation Engagements 16 (SSAE 16)report?

A)It reports on the upfront infrastructure costs of a firm and on projects that differentiate their core business processes.
B)It reports on the issues faced by an organization integrating with a cloud computing environment.
C)It reports on the suitability of the design of the controls of an application service provider over a period of time.
D)It reports on the fairness of the presentation of management's description of a service organization's system.

Question 53

Which of the following technicians uses software to divide one physical server into a number of virtual machines,with each virtual machine capable of processing a set of data for users from a given organization?

A)A program analyst
B)A server administrator
C)A technical head
D)A software developer

Question 54

Which of the following cloud computing technologies separates a physical computing device into one or more devices,each of which can be easily used and managed to perform computing tasks?

A)Personalization
B)Visualization
C)Virtualization
D)Polymerization

Question 55

The ability of information technology (IT)systems to manage themselves and adapt to changes in the computing environment,business policies,and operating objectives is known as _____.

A)virtualization
B)autonomic computing
C)visualization
D)smart sourcing

Question 56

Which of the following functions is addressed by autonomic computing?

A)Self-configuring
B)Self-accounting
C)Self-damaging
D)Self-producing

Question 57

Identify the goal of autonomic computing.

A)To divide one physical server into many virtual machines with each virtual machine capable of processing a set of data for users from a given organization
B)To provide users with a computing platform that includes an operating system,database services,and a Web server
C)To outsource the equipment used to support data processing operations,including servers,storage devices,and networking components
D)To create complex systems that run themselves,while keeping the system's complexity invisible to the end user

Question 58

Identify the goal of a service-level agreement.

A)To provide an international assurance standard for allowing public accountants to issue a report for use by user organizations
B)To manage expectations between customer and service provider by creating a common understanding about services,priorities,and responsibilities
C)To create complex systems that run themselves,while keeping the system's complexity invisible to the end user in a public cloud environment
D)To report on the fairness of the presentation of management's description of a service organization's system

Question 59

Which of the following strategies is based on analyzing the work to be done,including its associated current processes and the level of effectiveness and resources required?

A)Outsourcing governance process
B)Smart sourcing
C)Outsourcing contract
D)Service-level agreement

Question 60

Identify the goal of outsourcing governance procedures.

A)To report on the fairness of the presentation of management's description of a service organization's system and the suitability of the design of the controls
B)To create complex systems that run themselves,while keeping the system's complexity invisible to the end user in a public cloud environment
C)To provide data and resources on the upfront infrastructure costs of a firm and on projects that differentiate their core business process
D)To ensure that the outsourcing initiative succeeds,even as personnel,business needs,and operating conditions change

Question 61

Describe the three basic alternatives of ownership of assets and facilities in an outsourcing contract.

Question 62

All countries have the same stance on the protection of corporate data,copyrights,patents,and trade secrets.

Question 63

Substantive law is the part of the law that creates,defines,and regulates rights,including the law of contracts.

Question 64

List the key questions that an organization should answer to separate its core business processes from less critical processes.

Question 65

Each private cloud has a defined set of available resources and users,with predefined quotas that limit how much capacity users of that cloud can consume.

Question 66

The service-level agreement (SLA)manager serves as the primary point of contact for any issues related to the delivery of the services covered in the SLA.

Question 67

In public cloud computing,the service provider can deliver increasing amounts of computing,network,and storage capacity on demand and without requiring any capital investment on the part of the cloud users.

Question 68

The level of outsourcing risk is heightened as the organization increases the scope of processes being outsourced.

Question 69

A good service-level agreement defines the customer's right to audit the provider's compliance and to conduct on-site inspections.

Question 70

List five factors for evaluating outsourcing partners.

Question 71

Who is a global service provider?

Question 72

Describe hybrid cloud computing.

Question 73

List five functions of an efficient service-level agreement.