The Consequence of Failing to Establish How Good IT Services

question 32

Multiple Choice

The consequence of failing to establish how good IT services really need to be is:

• A) The company may fail to develop an IT platform that furthers its strategy, despite high IT expenditures
• B) Excessive technical and process standardization limits the flexibility of business units
• C) IT is overwhelmed with projects that have little companywide value
• D) The company may pay for service options that, given its priorities, aren't worth the money

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Definitions:

Expected Rate of Return

The anticipated amount of profit or loss from an investment, considering the potential risks and rewards.

Interest Rate

The percentage at which interest is charged or paid on a loan or investment over a specific period of time.

Normal Profit

The profit level that allows a business to cover its costs, including the opportunity cost of capital, without making an economic profit.

Economic Cost

The total cost of choosing one action over another, including both explicit costs (direct payments) and implicit costs (opportunity costs).