Question 1

Back office IT functions typically involve customer interactions.

Accepted Answer

Back office IT functions generally refer to internal operations such as data entry, system management, and administrative tasks that do not involve direct customer interactions.

Question 2

Enterprise systems can change the ethical and legal environment of the organization.

Accepted Answer

Enterprise systems can automate and standardize business processes, leading to changes in the way the organization deals with ethical and legal issues. For example, an enterprise system might enforce data privacy policies that protect customer information, or it might provide more transparency into supply chain practices to ensure compliance with labor laws. These changes can have a significant impact on an organization's ethical and legal environment.

Question 3

One reason that outsourcing lowers costs is because it doesn't require any oversight.

Accepted Answer

Outsourcing does require oversight, just as any other business operation does. The oversight may come from the company outsourcing the work or from a third-party manager overseeing the outsourcing process. Lack of oversight can actually lead to higher costs if mistakes are made or quality is compromised.

Question 4

Outsourcing by its very nature forces a more process-oriented perspective on the company.

Accepted Answer

Outsourcing involves delegating tasks and processes to external parties who specialize in a particular area. As a result, the company must define and document its internal processes and requirements in a clearer and more structured manner to effectively communicate with the outsourced provider. This process-oriented approach can help the company streamline its operations and identify areas for improvement.

Question 5

Outsourcing ERP systems has been done by organizations worldwide.

Accepted Answer

Outsourcing ERP systems is a common practice among organizations globally.

Question 6

Because of their extensive integration, ERP systems are less susceptible to security hazards.

Accepted Answer

ERP systems, due to their extensive integration with various departments and functions, may actually be more susceptible to security hazards, as a breach in one area can potentially affect the entire system. Additionally, there have been instances of ERP system vulnerabilities being exploited by hackers. Therefore, proper security measures and precautions are crucial for protecting ERP systems.

Question 7

Outsourcing occurs when a company decides to sub-contract its business processes or functions to another company.

Accepted Answer

Outsourcing involves delegating business processes or functions to a third-party company.

Question 8

Front-office IT functions generally include system development and maintenance.

Accepted Answer

Front-office IT functions typically involve direct interaction with the customers and include roles such as help desk support, customer service, and user training, rather than system development and maintenance, which are considered back-office IT functions.

Question 9

One benefit of outsourcing an ERP system is that it has a predictable monthly payment.

Accepted Answer

Outsourcing an ERP system allows for a subscription-based payment model, which usually has a predictable monthly payment rather than a large upfront cost.

Question 10

ERP systems don't require a high amount of maintenance.

Accepted Answer

ERP systems require regular maintenance including updates, patches, backups, and data management activities to ensure smooth functioning and optimal performance. Failure to maintain the system can lead to issues such as errors, data corruption, and security breaches.

Question 11

Outsourcing gives organizations access to a broader set of key IT skills.

Accepted Answer

Outsourcing allows organizations to tap into a global pool of talent and access specialized skills that may not be available in-house, thereby broadening their range of IT capabilities.

Question 12

It is difficult to add more hardware resources when the ERP system is outsourced.

Accepted Answer

When an ERP system is outsourced, it typically involves cloud-based solutions where adding more hardware resources is relatively easy and scalable, as the service provider manages the infrastructure.

Question 13

One benefit of outsourcing is that there are no unexpected costs.

Accepted Answer

Outsourcing may involve additional costs such as communication expenses or legal fees, and unexpected expenses such as dealing with quality issues or delays may also arise.

Question 14

ERP outsourcing is more common that IT outsourcing in general.

Accepted Answer

IT outsourcing is more common than ERP outsourcing because IT outsourcing encompasses a broader range of services, including but not limited to ERP systems, and is a well-established practice among businesses seeking to reduce costs, access specialized skills, and improve service quality.

Question 15

The Y2K problem provided a huge boost to the practice of IT outsourcing.

Accepted Answer

Companies were under pressure to update and fix their computer systems before the year 2000, leading many to turn to outsourcing firms to get the job done quickly and efficiently. This increased demand for outsourcing services and boosted the industry.

Question 16

Initially, most IT outsourcing focused on software training.

Accepted Answer

IT outsourcing initially focused on software development and maintenance, not just training. Training may have been a part of the process, but it was not the main focus.

Question 17

Misunderstandings often occur between the outsourcer and the organizations.

Accepted Answer

Misunderstandings can occur due to differences in communication styles, cultural norms, expectations, and scope.

Question 18

Outsourcing IT functions is cost effective but decreases flexibility.

Accepted Answer

Outsourcing IT functions can actually increase flexibility by allowing companies to scale resources up or down as needed and access specialized skills without long-term commitments.

Question 19

All companies can benefit from outsourcing their ERP systems.

Accepted Answer

Not all companies can benefit from outsourcing their ERP systems because the effectiveness of outsourcing depends on the company's size, industry, and specific business processes. Some companies may require highly customized solutions or have concerns about data security, making outsourcing less advantageous.

Question 20

Outsourcing ERP systems helps to lower the cost of software ownership and maintenance.

Accepted Answer

Outsourcing ERP systems can help to lower the cost of software ownership and maintenance by reducing the need for in-house IT staff, hardware and infrastructure costs, and software updates and upgrades. Additionally, outsourcing providers may be able to offer more economical pricing arrangements and flexible payment models.

Quiz 10: Global, Ethics, and Security Management