THE UNIVERSITY OF THE SOUTH PACIFIC

SCHOOL OF ACCOUNTING AND FINANCE

AF 302 – INFORMATION SYSTEMS

(Semester 1 - 2017)

FINAL EXAMINATION

(Time allowed: 3hours + 10 min extra reading time)

(50% Weighting towards Final Grade)

INSTRUCTIONS FOR CANDIDATES:

 THERE ARE 4 QUESTIONS IN THIS EXAM PAPER -

ATTEMPT ALL QUESTIONS.

QUESTION DESCRIPTION MARK SUGGESTED

ALLOCATION TIME
1 Multiple Choice Questions 25 45 MINUTES
2 Short - Answer Questions 25 45 MINUTES
3 Case Study 1 Questions 25 45 MINUTES
4 Case Study 2 Questions 25 45 MINUTES

TOTAL 100 3 HOURS

_______________________________________________________________
Question 1 Multiple Choice Questions [25 marks]

Circle the best answer in the multiple choice grid provided in your answer booklet.
Each question is worth 1 mark.

1. Which of the following is not one of the reasons why consumers and businesses
have been slow to embrace mobile commerce?

a. Concerns about privacy and security

b. Consumers find mobile devices too complicated to use for commerce
c. Limited and inconvenient mobile payment options
d. Lack of technological standardization (devices, OSs, browsers, etc.)

2. ________ allows developers to create apps where information like store locations
can be displayed on a map.

a. AJAX
b. Asynchronous JavaScript
c. Google API
d. Open source

3. In recent years, companies have created online communities for the purpose of
identifying market opportunities through ________, which is a model of problem
solving and idea generation from the collective talents of many people.

a. Global graph
b. Crowdsourcing
c. Crowdfunding
d. Social brainstorming

4. A fast growing social technology sector involves _______, which are used to
track conversations taking place on social media sites.

a. Crowdsourcing
b. Groundswell services
c. Social monitoring services
d. RSS technology

2
5. _________ refer to the generation that will place even greater demands on
retailers, expecting to use technology to accomplish all facets of the shopping
experience.

a. Digital natives
b. Digital immigrants
c. Digital dependents
d. Electronic generation

6. Two major B2B models are ________.

a. Auctions and social commerce

b. Catalogs and vertical markets
c. Sell-side marketplaces and e-sourcing
d. Outsourcing and horizontal markets

7. The collection of data for ratio analysis is done by the ________, and
interpretation of ratios and the ability to forecast their future behavior require
expertise, which is supported by _______.

a. POS; Audit systems

b. Database; data warehouse
c. TPS; DSS
d. MIS; EIS

8. Training activities that are part of HRM may involve __________ issues in
recruiting and selecting employees and in evaluating performance, in part because
these activities make use of private confidential information.

a. Strategic
b. Operational
c. Ethical
d. Budget

9. Which of the following is not one of the factors holding companies back from
implementing HR SaaS solutions to efficiently transform and improve the HR
function?

a. Security
b. Costs
c. Quality of service
d. Concern about integration with in-house applications

3
10. In terms of benefits, mashup apps decrease __________ compared to traditional,
custom software development.

a. IT implementation costs
b. System downtime
c. Computational errors
d. Interpretational errors

11. Key components of dashboards are design, API, access, and ______________.

a. Functionality
b. Mobility
c. Performance metrics
d. Accessibility

12. SharePoint can be used to set up a secure, access-controlled ________ site to

share with external partners in the supply chain, contractors, and so on.

a. extranet
b. intranet
c. cloud
d. legacy

13. The latest ERP solutions are designed with a focus on __________.

a. client–server architectures and custom-designed apps

b. Web-based architecture and VPNs
c. social collaboration and accessibility from mobile devices
d. manufacturing, distribution, retail, and service

14. The _________ layer, or middleware, enables the ERP to interface with legacy
apps.
a. Client-server
b. Data center integration
c. enterprise application integration
d. Web browser

15. Which of the following is not one of the major tasks of IT steering committees?
a. Enforce SLAs and other contracts
b. Allocate scarce resources
c. Set and evaluate performance metrics
d. Make staffing decisions

4
16. Skills of CIOs needed to improve IT–business alignment and governance include
all of the following except ________.

a. Negotiating SaaS or other cloud service contracts.

b. Having political savvy.
c. Inspiring a shared vision and influencing subordinates and superiors.
d. Thinking strategically and making good decisions under pressure

17. Which of the following statements about the balanced scorecard (BSC) is false?

a. BSC is a strategic measurement and management methodology—and a tool.

b. The BSC method relies on four “balanced” financial measures.
c. The BSC methodology is widely used in all industry sectors for strategic
planning.
d. HBR editors consider the BSC as one of the most influential management ideas of
the past 75 years.

18. Each task or activity has a start date and ________, which determines its finish
date.

a. duration
b. resource requirements
c. milestone
d. critical path

19. Project ________ depends on prompt and candid feedback from the project team,
while ________ depends on systems and decision rules for managing variances
between the project’s scope, cost, and schedule.

a. Monitoring; control
b. Management; monitoring
c. Critical path; scope creep
d. Timeline; baseline

20. The system development life cycle (SDLC) is the traditional system development
method for ________.

a. Updating legacy systems

b. Low risk IT projects, such as sales support
c. Systems integration projects
d. Large IT projects, such as IT infrastructure or an enterprise system.

5
21. If a workplace violence incident occurred and the attacker’s public social
networking profile contained information that could have predicted that behavior,
the employer may be held liable for ________.

a. Obstruction
b. Civil rights violations
c. Negligent hiring
d. Discrimination

22. The convergence of several technologies is blurring the digital and physical
worlds. These converging technologies include each of the following except
________.

a. greater bandwidth
b. explosion of connected M2M devices and IoT
c. expanding software-defined networking
d. increased use of real-time analytics

23. Architecting resilience depends on _________, which means that every

component is backed up by an alternative in case it fails.

a. Isolation
b. Integration
c. Redundancy
d. Flexibility

24. _________ can give every business access to an agile workforce that is not only
better suited to solving some of the problems that organizations struggle with
today but in many cases will do it for free.

a. Crowdsourcing
b. LinkedIn
c. Social recruiting
d. Brainstorming

25. Controls help to prevent ________, which refer to system development projects
that are so far over budget and past deadline that they must be abandoned,
typically with large monetary loss.

a. Deficient critical paths

b. runaway projects
c. scope creep
d. missed deadlines

6
______________________________________________________________
Question 2 Short Answer Questions [25 marks]

1. Why would systems that enhance a company’s relationships with customers have
such a high rate of failure? Give an example of a customer support system.

[5 marks]

2. Describe the IT strategic planning process and explain how the balanced
scorecard aligns IT strategy with business strategy? [5 marks]

3. Organisations invest in IT resources to manage their business processes. One

important aspect of IT investment relates to understanding the business value
created by the invested IT resources. Define business value and discuss how
organisations should measure the value of their IT investments.
[5 marks]

4. Discuss the stages of the Systems Development Life Cycle and explain the four
conversion methods of project implementation. [5 marks]

5. Assume that in your first week on a new job you are asked to use a type of
business software that you have never used before. What kind of user training
should your company provide to you before you start? [5 marks]

7
_______________________________________________________________
Question 3: IT Strategy _ [25 marks]

Question 3:
-' -~." -_ .....

A..BSOlLUTE .AJLIGr....m'1ENT:
A..BSOLlUTE ..AJLIGJ:<-mmNT: HOW ONE CIlO
CliO REMfo-KNS
REMfo-.JIN§ lIT'<1lLOCK-STEP
IIT'<T LOCK-STEP WJITH
WITH THE
T1EllE
BUSJD>n~ss
BUS.Eh"TESS

Every Thursday afieIUoon at 1 :30 pp.m.,

.m., Tom Uva's senior IT teru.n
tealTl gathers in his office
office.. They
do not assemble
asseui.ble to shoot the breeze or gnlinble
grum.bIe about the potent weather in Syracuse, N.Y N.Yo. ,
where their company, Sensis, an aerospace and defense manufacturer selling to a host of
. agencies, is headquartered. Uva's team. congregates
government .agencies,
three-letter acronym U.S. govenunent
project
weeldy to discuss the status of each and every business proj ect that has an IT component. The
assemblage consists of the leaders of the CIO's five groups that comprise Sensis Corporate
assem.blage
Technology Solutions (CTS): Business Solutions, which covers apps and data"management;
d ata°management; a
network ops teanl; Client Services, responsible for all IT activities for the Sensis user
commlLnity; Information Protection, or security; and "Run as a Business," which is
commu..t1ity;
responsible for such jobs as the IT group's 0~'Il financiaIs,
financials, vendor management and training
programs..
programs

The nUID.ber
nUlD.ber of each teanl's
teanl.'s "priorities" can range 8U)",,'here
an:>,,""here fronl
from five to 10 per month.
(Priorities cal1.
Gall be one project 01", or, more often, a component of a larger IT project.) As always,
the assemblage's .first
..first main conceIU, Uva says, is to see what they can do to get the priorities'
statuses that are red or yellow to green-in other words, from Dot not done to done. The IIleetlng,
meeting,
in and ofitsel("'is
ofitself;"'iIs probably jus,t like any other ."status update" meeting held in the confines of
any other CIO's office. But what is different about this meeting-what makes it more
effective, precise and strategic than most-is this: All in attendance know that Sensis's
executive team and each business unit that CTS is partnering with has signed off on every
priolity and is equally committed to its success; they know that every Sensis employee will
prioliiY.
see their success or failure for the month; and finally, they know that part of their pay is tied
to the success of the entire CTS portfolio.

They know all this because Uva ·set 'set it up this way: Each year, business and IT leaders
.'- .' e:;tablish an IT operating plan that's based on Sensis's overall, long-term strategies. That then
e;;tablish
dO'wn into annual, quarterly and monthly IT priorities, which are tracked objectively
cascades dov.'Il
and meticulously, and are made 100 percent visible to Sensis's lines of business: "This is not
rocket science," Uva says. He's light. It's simply an approach to. mending classic business-IT
disconnects. It's about transparency and truth.fuI.ness. Responsibility and rigor. Pacing .and
prioritization. After those weekly
weeldy meetings conclude, Uva·knows
Uva' knows that all of his staffers lmow
ofbis Imow
exactly what to do next. "It makes sure that everyone is looking to that North Star," Uva says.
"So it's not just an exercise you go through once a year and forget about it. It's very, very
actively managed."

The current incarnation of Uva's project and priorities tool has evolved over the years into its
present form. outside. expert input in its creation"-and
form.. There was a lot of outside, creation'-and the processes that
surround it; the input came from CIOs who had been there, done that. Uva took bits and
that experience, blending real-world IT realities with sound
pieces from this person and from tl').at
project management strategies. "This isn't Shlffstuff I dreamed up on a whiteboard in my~gat-&:ge,"
m:y,~~"at-a'ge,"
vettin.e; that went into it."
he says. "There's a lot of vetting ..

8
At those Thursday meetings, Uva says, the minutiae of the monthly tasks are easily linked
back to the larger Sensis strategy. "We nwke .sure the priorities set for t.hat month align to the
four-year. strategy," he says. That provides his staff with
quarter, the year and that tbree- to four-year
focus and manageable assignments- and avo~ds a trap into which many IT shops fall. "Most
shops have much more demand than capacity," Uva says. "The hazard is that you'll spend all
your time putting out day to day fires and all the strategic stuff will go on the back burner.
burner."11

Uva uses teuns

teuus such as "lightweight" and "low-maintenance" to describe tool that houses his
IT strategy: He keeps all of this data in two documents stored on Microsoft (MSFT)
Sharepoint (the Strategic Plan and Operating Plan), bQth of which he maintains, updates and
shares with everyone in the company. DvaUva believes that any IT plan that purportedly links to
the business strategy should be concise. So his IT manifesto is 110t
not 100 to 150 pages worth of
shelfware that no one will ever read .._"I don't think people have time to write it or read
ever read.
something that long, he says. The three- to four-year Sensis strategy is revisited once a year
It

by Uva and the senior leaders. Gathered all in one room, the group has the opportunity to
ensure what's important to each business group, refine existing plans and validate the
forecasted IT projects in the queue.

For example, if Sensis's air traffic group believes that in 2012 and 2013 Sensis will have a
much larger percentage of business taking place in Europe and Pacific Rim, then the group
can alter some of the plans for 2012. The key to all of this, Uva says, is that "the business
decides how to best optimize [IT-related] spend for that given month or quarter, based on
capacity or demand." That transparency, in tum, makes IT less of a black box at Sensis.

"Visibility into the CTS department's priorities on a monthly basis allows me and my
leadership teani'to
teani to understand what other business initiatives are competing for IT resources,"
says Peggy Dudarchik,
Dudarchik. SVP and chief people officer at Sensis, via e-mail. "This.
"This helps me
understand the relative importance and priority of the HR department's requests, compared to
those of other operating areas within the company. IIII

Source: CIO Magazine

Required: ,

1. Discuss the approach that Tom Uva's senior IT team uses to ensure IT-Business
Alignment in their organisation - Sensis.
[8 Marks]

2. Proper planning is important to ensure sustainable IT-business alignment. Discuss the

planning approach used by Tom Uva's teanl
team to achieve their IT-business alignment.

[9 Marks)

3. The case notes ..... "the business decides how to best optimize [IT-related} spend
spel1dfor
for
that given month or quarter, based on capacity Or or demand." That
17wt transparency,
transparency. in
tum,
turn, makes IT less of a black box at Sensis. " Discuss the.approach that Sensis uses to
make more transparent and visible the use of its IT. Discuss how such approaches
contribute to IT business alignment.
[8 Marks1

9
_______________________________________________________________
Question 4: Customer Relationship Management _[25 marks]

Question 4: Customer Relationship Management [25 marks)

]Finding Diamonds by Data Mining at Harrah's Enteriainment,lfnc.

Entertainment, Jrnc.

The Problem

Harrah's Entertainment, Inc. (harrahs.com) is a very profitable casino chain that likes to spread
its bets. The world's largest gaming company, Harrah's owns, operates, andlor
and/or manages about 50
prim.a.Tily in the
casinos under such names as Bally's, Caesars, Harrah's, Horseshoe, and Rio, prima.tily
United States and the United Kingdom. In April 2008, Harrah's became the first gambling
company to receive an Environmental Quality Award from the U.S. Environmental Protection
Agency. Since 2002, Harrah's has made green improvements at all of its Atlantic City properties;
propclues;
by using more efficient lighting, nontoxic cleaning chemicals; thermostats that limit energy use;
wid ,more eco-friendly refrigerants. In addition.
more efficient boilers, chillers, and air handlers; arid
Harrah's recycles 50,000 gallons of cooking oil waste each ·year from its kitchens, annually
recycles 1.6 million pounds of cardboard, and ha~·ha~, eliminated 1.1
L 1 million polystyrene beverage
cups. Harrah's also has purchased two hybrid vehicles to support local transportation
reqtrirements.
requirements. '

Most casino operators use intuition to plan inducements for custmners.

customers. Almost all have loyalty
cards, provide free rooms to customers who visit frequently, give tickets for free shows, and
more. The problem is that there is little differentiation among the casinos. Casinos believe they
give those inG~ntives
must give:those in<;~ntives to survive, but do they help casinos excel? Sandeep Khera, director of
Harrah's
Hiu-rah's operational customer rrelationship management (CRM), has been using data
warehousing technologies to provide analytical data for the company's CRM in order to market
to the customers. .'

The Solution

Harrab.' s strategy is based on technology-based CRi'V1

Harrah's CRi\-1 and the use of customer database
marketing to test promotions. This combination enables the company to fine-tune marketing
efforts and service-delivery strategies that keep customers coming back. Noting that about 80
percent of its revenue comes from slot machines, Harrah's started by giving each player a loyalty
smart card. A smart-card reader on each slot machine in all of its casinos records each
customer's activities. Card readers are also available in Harrah's restaurants, gift shops, and so
forth, to capture any spending. Logging your activities, you earn crc;;dit,as
cn:dit,as in other loyalty
programs, for which you get free hotel rooms, dinners, and so on. Such programs are run by its
competitors, but Harrah's goes a step further. It uses an operational database to analyze the data
recorded by the card readers. By tracking millions of transactions, the IT systems assemble a vast
amount of data on customer habits and preferences. These data are fed into the enterprise data
warehouse, which contains not only millions of transactional data points about customers, but
also details about their gambling, spending, and preferences.

The data warehouse has become a very rich repository of customer information. and it is mined
for decision support. The information found in Harrah's database indicated that a loyalty strategy
based on same-store (same casino, in this case) sales growth could be very beneficial. For

10
 example, they learned that mCiJ'timizing
mcedmizing repeat visits by existing cllstomers was more profitable
than attracting new customers. From analysis, they discovered that the company's best customers
were middle-aged and senior
sernor adults with discretionary time and income, who enjoyed playing
slot machines. These customers did not typically stay in a hotel, but visited a casino on the way
home from work or on a weekend night out. They responded better to an-offer
an -offer of $60 of casino
chips than to a free room, two steak dinners, and $30 worth of chips, because they enjoyed the
anticipation and excitement of gambling itself rather than seeing the trip as a vacation get-away.
This strategy offered a way to differentiate Harrah's brand. Understanding the lifetime value of
the customers became critical to the company's marketing strategy. Instead of focusing on how
much people spend in the casinos during a single visit, the company began to focus on their total
spending over a long time. By gathering more and more specific information about customer
preferences, running experiments and analyses on the newly collected data, and determining
ways of appealing to players' interests, the company was able to increase the amount of money
customers spent there by appealing to their individual preferences. As in other casinos with
loyalty programs, players are segregated into three tiers, with the biggest spenders getting VIP
treatments.

There is a visible differentiation in customer service based on the thre!>tier

three-tier hierarchy, and every
experience in Harrah's casinos was redesigned to drive customel's
customel'S to want to earn a higher-level
higher-tiere~ cards.
card. Customers have responded by doing what they can to earn the higher-tiere<;l
However, Harrah's transactional database is doing much more than just calculating gambling
spending'- For example, the casino knows which specific customers were playing at particular
spending.
slot machines and at what time. Using data mining techniques, Harrah's can discover what
specific machines appealed to specific customers.
customers, This knowledge enabled Harrah's to configure
the casino floor with a mix of slot machines that benefited both the customers and the company.
In addition, by measuring all employee performance on the matrices of speed and friendliness -
and analyzing these results with data mining, the company is able to provide its customers with
better experiences as well as earn more money for the employees.

Harrah's implemented a bonus plan to reward hourly workers with extra cash for achieving
improved customer satisfaction scores. The bonus program worked because the reward depends
on everyone's performance. The general manager of a lower-scoring property -might m ight visit a
D colleague at a higher-scoring casino to find out what he could do to improve his casino's scores.
Harrah's realized many benefits from the upgrade in data warehousing applications, including
being able to grab realtime information flowing off the casino floor (e.g., customer machine
transactions, length of time the customer
cllstomer was playing, and the historical relationship with the
casino). Using Teradata for the back-end data warehouse, Harrah's has been able to provide -
more personalized floor service for its customers. They recognize first-time customers and
customers who have been away from the casino for an extended period of time and need
additional services. Another impoltant program possible because of the active data
data-warehousing
warehousing
components is Harrah's player contact system (peS). This program manages high-volume
players who will be most profitable to the casino by ?ssigning VIP hosts to them to maintain a
long-term relationship.

The Results

Harrah's experience has shown that the better the experience a guest has and the more attentive
servi~~i:fnot
you are to him or her, the more money will be made. For Harrah's, good customer serviG"?iS"not

l\

11
a matter of an isolated incident or two but of daily routine. Harrah's continues to enhance
benefits to its Total Rewards program.,
program, improves customer loyalty through customer service
supported by the data mining, and, of course, makes lots of money. The success of the active
data warehouse project allowed Harrah's to initiate over 14,000 proactive customer interactions.
It has seen a huge increase in customer service scores, enhancing customer loyalty. From 2004 to
2008, using the pes, the growth in the VIP program has exceeded 20 percent. Harrah's has been
able to maximize revenues while enhancing casino 'experiences.

Required: ,
JRequired:

L Discuss the concept of Green IT. In April 2008, Harrah's became the first gambling company
1.
to receive an Environmental Quality Award from the U.S. Environmental Protection Agency.
What Green IT improvements could they have made to demonstrate further their concern to
environmental protection?
~Marks]

2. Conventional CRM applications would be common amongst IunlS in a competrbve competltJ.ve

environment. Harrah's realised tIns
this outcome. What further steps did HalTah's took to secure
competitive advantage?
rG marks]
[6

3. How did a data warehouse approach to data management helped Harrah's in making
use 8f their CRM systems?
innovative use8f
[5 marks]
marl{S]

4. Document Harrah's success or failure in integrating their CRM applications with their data
warehouse approach to data management to secure competitive advantage in their industry.
r~marks]
I~marks]

END

12.

12
Question 1 Multiple Choice - General [25 marks]
Circle the BEST answer for each of the following multiple-choice items.
(PLEASE ATTACH THIS WITH YOUR ANSWER BOOKLET)

1. A B C D

2. A B C D

3. A B C D
4. A B C D
5. A B C D
6. A B C D
7. A B C D

8. A B C D
9. A B C D
10. A B C D
11. A B C D
12. A B C D
13. A B C D

14. A B C D

15. A B C D
16. A B C D
17. A B C D
18. A B C D
19. A B C D
20. A B C D
21. A B C D
22. A B C D
23. A B C D
24. A B C D

25. A B C D

13
14