Information System Project Mgmt - Chapter 12 Quiz

Allow the client organization to focus on its core business

"Most organizations are not in business to provide information technology services, yet many have spent valuable time and resources on information technology functions when they should have focused on core competencies such as marketing, customer service, and new product design." refers to the ____ benefit of outsourcing.

Access skills and technologies

"Organizations can gain access to specific skills and technologies when they are required by using outside resources." refers to the ____ benefit of outsourcing.

Reduce both fixed and recurrent costs

"Outsourcing suppliers are often able to use economies of scale that may not be available to the client alone, especially for hardware and software." refers to the ____ benefit of outsourcing.

Provide flexibility

"Outsourcing to provide extra staff during periods of peak workloads can be much more economical than trying to staff entire projects with internal resources." refers to the ____ benefit.

contract

A well-written ____________________—a mutually binding agreement that obligates the seller to provide the specified products or services and obligates the buyer to pay for them—can clarify responsibilities and sharpen focus on key deliverables of a project.

RFP

A(n) ____ is a document used to solicit proposals from prospective suppliers.

RFQ

A(n) ____ is a document used to solicit quotes or bids from prospective suppliers.

bidders' - bidders - supplier - pre-bid

A(n) ____________________ conference is a meeting with prospective sellers prior to preparation of their proposals or bids.

make-or-buy

A(n) ____________________ decision is one in which an organization decides if it is in its best interests to make certain products or perform certain services inside the organization, or if it is better to buy them from an outside organization.

termination clause

A(n) ____________________ is a contract clause that allows the buyer or supplier to end the contract.

proposal

A(n) ____________________ is a document prepared by a seller when there are different approaches for meeting buyer needs.

bid - tender - quote - quotation

A(n) ____________________ is a document prepared by sellers providing pricing for standard items that have been clearly defined by the buyer.

records management

A(n) ____________________ system provides the ability to easily organize, find, and archive procurement-related documents.

firm-fixed price (FFP) - firm-fixed price - FFP

A(n) _________________________ contract has the least amount of risk for the buyer.

20

An October 2005 Information Technology Association of America (ITAA)-sponsored report stated that spending for global sources of computer software and services is expected to grow at a compound annual rate of about ____ percent.

$20.4 billion

An October 2005 Information Technology Association of America (ITAA)-sponsored report stated that total savings from offshore resources during the 2005-2010 period are estimated to grow from $8.7 billion to ____.

three to five

Buyers typically develop a short list of the top ____ suppliers to reduce the work involved in selecting a source.

evaluation

Experts in source selection highly recommend that buyers use formal proposal ____________________ sheets during source selection.

outsourcing

For many projects, properly ____ some information technology functions can be a great investment.

CPPC

From the supplier's perspective, there is the least risk with a(n) ____ contract.

contract

If a SOW is used as part of a contract to describe only the work required for that particular contract, it is called a(n) ____________________ statement of work.

samples

Many organizations use ____ and templates to generate SOWs.

templates

Many organizations use samples and ____________________ to generate SOWs.

Conducting procurements

Outputs to the ____ process include selected sellers, procurement contract awards, resource calendars, change requests, and updates to the project management plan and other project documents.

source

Selecting suppliers or sellers, often called ____________________ selection, involves evaluating proposals or bids from sellers, choosing the best one, negotiating the contract, and awarding the contract.

False

T/F: A contract SOW should not specify the location of the work.

True

T/F: A key factor in evaluating bids, particularly for projects involving information technology, is the past performance record of the bidder.

False

T/F: According to a 2008 report on IT outsourceing trends in the U.S. and Canada, application development is the least popular form of IT outsourcing and was used by only 25 percent of organizations surveyed.

True

T/F: Any type of contract should include specific clauses that take into account issues unique to the project.

True

T/F: Contents of the procurement management plan will vary with project needs.

False

T/F: Experts in source selection recommend that technical criteria should be given more weight than management or cost criteria.

False

T/F: Experts outside the company, including potential suppliers themselves, cannot provide expert judgment.

False

T/F: Few organizations use some form of outsourcing to meet their information technology needs.

True

T/F: If there is no need to buy any products or services from outside the organization, then there is no need to perform any of the other procurement management processes.

False

T/F: It is always less effective to hire skilled consultants to perform specific tasks for a short period of time than to hire or keep employees on staff full time.

True

T/F: It is customary to have contract negotiations during the source selection process.

False

T/F: It is important to use appropriate words in a contract SOW such as may instead of must.

False

T/F: Lead times for purchases and acquisitions should not be included in a procurement management plan.

True

T/F: Make-or-buy analysis involves estimating the internal costs of providing a product or service and comparing that estimate to the cost of outsourcing.

True

T/F: Many companies are realizing that they can use offshore outsourcing and create more jobs at home.

False

T/F: Many private companies use the term procurement instead of purchasing.

False

T/F: Most people view offshore outsourcing as being good.

True

T/F: Some termination clauses state that the buyer can terminate a contract for any reason and give the supplier only 24 hours' notice.

False

T/F: The buyer absorbs less of the risk with cost-reimbursable contracts than they do with fixed-price contracts.

True

T/F: The cost savings and use of offshore resources lower inflation, increase productivity, and lower interest rates.

False

T/F: The main sections of an RFP never include the statement of work and schedule information.

False

T/F: The success of many information technology projects that use outside resources is often due to good project cost management.

True

T/F: The term "e-procurement" often describes various procurement functions that are now done electronically.

True

T/F: The total value of the contract is a function of the quantities needed to complete the work.

True

T/F: When an organization outsources work, it often does not have as much control over those aspects of projects that suppliers carry out.

SOW

The ____ is a description of the work required for the procurement.

procurement

The term ____________________ is widely used in government.

four

There are ____ main processes of project procurement management.

procurement audits

Tools to assist in contract closure include ____________________ , negotiated settlements, and a records management system.

CPIF

With a(n) ____ contract, the buyer pays the supplier for allowable performance costs along with a predetermined fee and an incentive bonus.

CPPC

With a(n) ____ contract, the buyer pays the supplier for allowable performance costs along with a predetermined percentage based on total costs.

CPFF

With a(n) ____ contract, the buyer pays the supplier for allowable performance costs plus a fixed fee payment usually based on a percentage of estimated costs.

Constructive COMPLETION

____ change orders are oral or written acts or omissions by someone with actual or apparent authority that can be construed to have the same effect as a written change order.

outsourcing

____ contracts involve a fixed total price for a well-defined product or service.

Cost-reimbursable contracts

____ involve payment to the supplier for direct and indirect actual costs.

Closing procurements

____ involves completion and settlement of each contract, including resolution of any open items.

Planning procurements

____ involves determining what to procure, when, and how.

Administering procurements

____ involves managing relationships with sellers, monitoring contract performance, and making changes as needed.

Conducting procurements

____ involves obtaining seller responses, selecting sellers, and awarding contracts.

Procurement audits

____________________ are often done during contract closure to identify lessons learned in the entire procurement process.

Unit pricing

____________________ can be used in various types of contracts to require the buyer to pay the supplier a predetermined amount per unit of product or service.

Closing procurements

____________________ involves completion and settlement of each contract, including resolution of any open items.

Procurement

____________________ means acquiring goods and/or services from an outside source.

Time and material (T&M) - Time and material - T&M

______________________________ contracts are a hybrid of both fixed-price and cost-reimbursable contracts.

Project procurement management

______________________________ includes the processes required to acquire goods and services for a project from outside the performing organization.