Page 1 of 6

SBMF15







Pr ogr amme Cohor t
Mast er of Busi ness Admi ni st r at i on
(Fi nanc i al Ri sk Management )
MBAFRM/10/PT
Mast er of Busi ness Admi ni st r at i on
Gener al
MBAG/10/PT
MBA-Pr oj ec t Management MBAPM/10/PT
Ex ami nat i ons f or 20092010 Semest er I I / 2010 Semest er I

MODULE: BUSINESS INFORMATION TECHNOLOGY

MODULE CODE: MMIS 5208

Duration: 3 Hours

Reading time: 10 Minutes



Instructions to Candidates:

1. This question paper consists of Section A and Section B.
2. Secti on A is compulsory.
3. Answer any two questions from Section B.
4. Always start a new question on a fresh page.
5. Total Marks: 100


This question paper contai ns 4 questions and 6 pages.
Page 2 of 6
SBMF15

SECTI ON A: COMPULSORY


QUESTION 1: (40 MARKS)


INVACARE STRUGGLES WITH ITS ENTERPRISE SYSTEM
IMPLEMENTATION
Invacare headquartered in Elyria, Ohio is the worlds manufacturer and
distributor of non-acute health care products, including wheel chairs,
motorized scooters, home care beds, portable compressed oxygen
systems, bath safety products and skin and wound care products. It
conducts business over eighty countries, maintaining manufacturing
plants in the United States and eleven other nations. Invacare sells its
products primarily to over 25,000 home health care and medical
equipment provider locations in the United States, Europe, Australia,
New Zealand, and Canada, with the remainder of its sales primarily to
government agencies and distributors. The company also distributes
medical equipment and related supplies manufactured by other
companies.
Invacare does not maintain much inventory. It manufactures most of its
products to meet near-term demands and it builds some of its products to
order. It is constantly revising and expanding its numerous product lines.
In 2004, Invacare began working on replacing a collection of home-made
legacy systems for purchase to payable processes with modules from
Oracles 11i E-Business Suite. Invacare had been using Oracle database
software and had implemented the financial modules from Oracle E-
Business Suite four years earlier. The company experienced no
problems implementing and using the Oracle E-Business financial
modules.
However Invacare ran into problems when it went live with the new
order-to-cash modules, which let a company receive an order, allocate
supplies to build it, and provide customer access to order status.
Invacare information systems specialists had tested the software under
real-world business conditions and everyone felt the software was ready
to be used in actual business operations.


Page 3 of 6
SBMF15
When the system went live in October 2005, the software would not
perform properly. Our systems were locking up, observed Greg
Thompson, Invacares Chief Financial Officer. Invacare call centre
representatives were unable to answer customer telephone calls in a
timely manner. When they did talk with customers, they could not find
complete information in the system about stock availability and shipment
dates for products. The company was unable to ship products to
customers within required lead times. Invacares management never
expected the implementation to be trouble-free but it clearly did not
foresee the magnitude of the problems it experienced with the new
systems.
As a result of the manufacturing software, Invacare lost sales and had
higher than usual levels of returned goods. It also incurred extra
expenses for expediting product orders and for paying for employee
overtime it its manufacturing, distribution and customer service
departments. Two months of sales disruptions caused Invacare to cut its
fourth-quarter revenue estimates to between $370 million and $380
million, lower than the previous year and well below the 2 percent sales
increase the company had previously projected. Losses totalled $30
million for the quarter and extended to the first quarter of 2006.
The new system also changed some of the companys internal controls
over financial reporting and some of these controls did not function as
intended. During the financial quarter of 2005, Invacare had to perform a
physical year-end inventory count for its North American operations and
take special steps to validate the figures used in financial statements.
According to Thompson, Invacares problems were not caused by Oracle
Software but by the way that Invacare configured the software and
integrated its business processes with the new system. He and other
Invacare management should have done more testing work.
Oracle worked closely with Invacare to resolve the problems and
Thompson was pleased by Oracles response. Oracle has been very
helpful in working with our teams to resolve the issues weve identified,
he said. Thompson anticipated all ordering and invoicing problems to be
cleared up by early 2006.

Page 4 of 6
SBMF15
Thompson also expressed hope that the new ERP system will provide
enough value to offset companys losses from the system. Invacare
spent $20 million on its ERP implementation. Its still too early to tell
whether Invacares ERP system will justify its costs.
Source: Interactive Session: Organizations, Managing The Digital Firm -
Laudon & Laudon 10/E

(a) How did problems implementing the Oracle enterprise software affect
Invacares business performance?

(10 marks)
(b) What management, organization, and technology factors affected
Invacares ERP implementation?

(10 marks)
(c) If you were Invacares management, what steps would you have taken to
prevent these problems?

(10 marks)
(d) In general, what business value do enterprise systems contribute to
organizations?

(10 marks)
Page 5 of 6
SBMF15
SECTI ON B: ANSWER ANY TWO QUESTI ONS


QUESTION 2: (30 MARKS)



(a) What are the six strategic objectives that business firms want to
achieve by investing massively in information systems?

(12 marks)
(b) Describe with supporting examples the different types of systems
used in an organisation.

(7 marks)
(c) Porters value chain model highlights specific activities in the
business where competitive strategies can best be applied and where
information systems are most likely to have a strategic impact.
Explain how.

(8 marks)
(d) 'Dirty Data' is a Business Problem, Not an IT Problem, Says Gartner.
Do you agree?
(3 marks)

QUESTION 3: (30 MARKS)



(a) Organisations are discovering that moving to a single, IP-based
network offers a wealth of competitive advantages. Explain.

(10 marks)
(b) What is a virtual private network (VPN)?

(3 marks)
(c) Many organisations adopt a multi-tiered architecture to run their web-
based applications. With the help of a diagram, identify the
vulnerabilities and threats posed by such a model.

(13 marks)
(d) Distinguish between fault tolerant systems and high availability
computing.

(4 marks)

Page 6 of 6
SBMF15

QUESTION 4: (30 MARKS)



(a) The unique features of the Internet and the Web have boosted the
growth of the E-commerce. Explain.

(14 marks)
(b) The CEO of a fortune 1000 company plans to adopt Business
Process Re-engineering (BPR) as planned organisational change.
Advise her about BPR.

(10 marks)
(c) What do you understand by conversion when new systems are being
built?
(6 marks)




***END OF QUESTION PAPER***