Scenario
A central government department, the Ministry of Food Hygiene (MFH), faces increasing
pressure to cut costs, better manage suppliers’ performance and reduce the confusion
caused by inadequate internal controls, outdated standards and outdated technology.
External consultants were employed to conduct a feasibility study to identify options to
address the problems, and the likely costs and benefits. The following options were
considered:
Do nothing.
Re-engineer selected business functions.
Outsource selected business functions.
The feasibility study concluded that there was a case for outsourcing the MFH Information
Technology
Division and the Facilities Division (maintenance of buildings and grounds). The
recommendations were:
One service provider should be contracted to provide the services currently provided by
the
Information Technology Division and the Facilities Division.
A 10-year service contract should be agreed with the selected service provider.
The feasibility study developed high-level designs of the current organization, processes,
systems and
operating models, plus an outline Business Case for the required project. The external
consultants
also made the following recommendations for the management of the project:
Use PRINCE2.
Set up the project with 4 management stages:
Stage 1. Standard PRINCE2 initiation activities.
Stage 2. Create detailed designs (future organization, processes, systems and operating
models) and the service level agreement between MFH and the future service
provider.
Stage 3. Request and evaluate proposals, select service provider and agree contract.
Stage 4. Transfer equipment and staff, transfer responsibility for service provision and run
trial period.
Initial estimates indicated that the project would cost £2.5m and take two years to
complete.
MFH senior management agreed that there was a case for outsourcing, and accepted the
recommendations as a basis for the project. There is an expected saving of £20m over 10
years.
The Outsourcing project has completed the Starting up a Project process and is now in the
initiation stage. Because of the strategic importance of the project, the MFH Chief
Executive Officer has taken the role of Executive. A PRINCE2-experienced Project
Manager has been appointed from within MFH. Staff within the business functions being
outsourced will work with the external consultants who conducted the feasibility study to
define the detailed designs.
Which 2 statements should be recorded under the Expected benefits heading?

A.

The 10-year outsourcing contract, at current prices, will be worth £80m.

B.

Outsourcing would allow MFH to take advantage of the best services the outsourcing
industry has to offer.

C.

The total expected savings over 10 years, at current prices, is £20m.

D.

The 10-year outsourcing contract will enable MFH to stabilize costs at agreed levels.

E.

The confirmed cost of the Outsourcing project is £2.5m, but with considerable savings
over 10 years.

When considering the business options in the business case, which of these is NOT an
option?

A.

Do nothing

B.

Do the maximum

C.

Do the minimum

D.

Do something

Which of the following activities is the Executive responsible for?

A.

Ensure the desired outcome of the project is specified

B.

Responsible for the benefits review plan

C.

Assess and update the Business Case at the end of each stage

D.

Responsible for the Benefits Review Plan post project

Scenario
Additional Information
During the initiation stage the Project Manager met with the Marketing Director to find out
more about the requirements of the promotional calendar and recorded the following notes:
There has been a reduction in the order numbers at the MNO Manufacturing due in part to
the increased marketing activities of its competitors. 10% of customers have not re-ordered
in this financial year and staff morale is poor. A number of skilled staff have left as a result
and replacement staff have not been recruited due to the reduced operation. If the project
is successful, a recruitment campaign will be required to fill the existing staff vacancies and
there may be a requirement for additional staff. Operational costs are likely to increase
because skilled staff are expensive and difficult to find.
In financial terms, there were a total of 1,500 orders in the last financial year, each with an
average profit of £2k. The Marketing department believes that sending a promotional
calendar to our current and prospective customers would increase orders by at least 10%
with a minimum of 10 further orders from the list of prospective customers within 12 months
from the date of distribution.
The Marketing Director will be funding the project from the business marketing budget. She
believes that the effect of a good company image portrayed by a successful calendar would
last into a second year. She has forecast the same increase in orders for a second year
and predicts that the annual employee satisfaction survey will show a measurable
improvement in staff morale.
A number of alternatives were explored, including:
20% discount for all repeat customers - not cost-effective and very short term
A promotional calendar as a free Christmas gift - would target current and
prospective customers and the benefits would last into a second year
A series of television and press advertisements· was too expensive
A direct mail shot to all customers - benefit would be short term
Creation of an internet website - would not suit all customers
The calendar is seen as the favored option, as long as the company's competitors do not
increase their marketing activity. Whilst the Marketing department wants a very high
quality, glossy product, the project management team must be aware of the cost this will
incur.
Which 2 statements correctly define a Business Case risk which should be recorded under
the Major risks heading?

A.

Operational costs will increase as a result of the recruitment campaign.

B.

The prepared calendar pack is to be delivered to the printers by the first week in
December.

C.

If the calendar quality is poor customers will not use it, creating the reverse effect and
reducing orders further.

D.

If any competitors launch a calendar at the same time this will reduce the impact of the
MNO calendar and benefits will be reduced.

E.

Staff morale will improve as a result of the promotional calendar.

Scenario
Additional Information
During the initiation stage the Project Manager met with the Marketing Director to find out
more about the requirements of the promotional calendar and recorded the following notes:
There has been a reduction in the order numbers at the MNO Manufacturing due in part to
the increased marketing activities of its competitors. 10% of customers have not re-ordered
in this financial year and staff morale is poor. A number of skilled staff have left as a result
and replacement staff have not been recruited due to the reduced operation. If the project
is successful, a recruitment campaign will be required to fill the existing staff vacancies and
there may be a requirement for additional staff. Operational costs are likely to increase
because skilled staff are expensive and difficult to find.
In financial terms, there were a total of 1,500 orders in the last financial year, each with an
average profit of £2k. The Marketing department believes that sending a promotional
calendar to our current and prospective customers would increase orders by at least 10%
with a minimum of 10 further orders from the list of prospective customers within 12 months
from the date of distribution.
The Marketing Director will be funding the project from the business marketing budget. She
believes that the effect of a good company image portrayed by a successful calendar would
last into a second year. She has forecast the same increase in orders for a second year
and predicts that the annual employee satisfaction survey will show a measurable
improvement in staff morale.
A number of alternatives were explored, including:
20% discount for all repeat customers - not cost-effective and very short term
A promotional calendar as a free Christmas gift - would target current and
prospective customers and the benefits would last into a second year
A series of television and press advertisements· was too expensive
A direct mail shot to all customers - benefit would be short term
Creation of an internet website - would not suit all customers
The calendar is seen as the favored option, as long as the company's competitors do not
increase their marketing activity. Whilst the Marketing department wants a very high
quality, glossy product, the project management team must be aware of the cost this will
incur.
Using the Project Scenario and the additional Information provided for this question
In the Scenario Booklet, answer the following question.
Lines A to E in the table below consist of an assertion statement and a reason statement.
For each line identify the appropriate option, from options A to E, that applies. Each option
can be used once, more than once or not at all.

Scenario
Additional Information
During the initiation stage the Project Manager met with the Marketing Director to find out
more about the requirements of the promotional calendar and recorded the following notes:
There has been a reduction in the order numbers at the MNO Manufacturing due in part to
the increased marketing activities of its competitors. 10% of customers have not re-ordered
in this financial year and staff morale is poor. A number of skilled staff have left as a result
and replacement staff have not been recruited due to the reduced operation. If the project
is successful, a recruitment campaign will be required to fill the existing staff vacancies and
there may be a requirement for additional staff. Operational costs are likely to increase
because skilled staff are expensive and difficult to find.
In financial terms, there were a total of 1,500 orders in the last financial year, each with an
average profit of £2k. The Marketing department believes that sending a promotional
calendar to our current and prospective customers would increase orders by at least 10%
with a minimum of 10 further orders from the list of prospective customers within 12 months
from the date of distribution.
The Marketing Director will be funding the project from the business marketing budget. She
believes that the effect of a good company image portrayed by a successful calendar would
last into a second year. She has forecast the same increase in orders for a second year
and predicts that the annual employee satisfaction survey will show a measurable
improvement in staff morale.
A number of alternatives were explored, including:
20% discount for all repeat customers - not cost-effective and very short term
A promotional calendar as a free Christmas gift - would target current and
prospective customers and the benefits would last into a second year
A series of television and press advertisements· was too expensive
A direct mail shot to all customers - benefit would be short term
Creation of an internet website - would not suit all customers
The calendar is seen as the favored option, as long as the company's competitors do not
increase their marketing activity. Whilst the Marketing department wants a very high
quality, glossy product, the project management team must be aware of the cost this will
incur.
Which 2 statements should be recorded under the Timescale heading?

A.

Benefits will be lost if the project is not completed on time.

B.

A recruitment campaign to fill the existing staff vacancies will need to take place in the
next 12 months.

C.

Additional 10% increase in orders in year two.

D.

The prepared calendar pack must be delivered by the first week in December.

E.

The print company requires a 2 week notification period of the calendar pack delivery.

Scenario
A central government department, the Ministry of Food Hygiene (MFH), faces increasing
pressure to cut costs, better manage suppliers’ performance and reduce the confusion
caused by inadequate internal controls, outdated standards and outdated technology.
External consultants were employed to conduct a feasibility study to identify options to
address the problems, and the likely costs and benefits. The following options were
considered:
Do nothing.
Re-engineer selected business functions.
Outsource selected business functions.
The feasibility study concluded that there was a case for outsourcing the MFH Information
Technology
Division and the Facilities Division (maintenance of buildings and grounds). The
recommendations were:
One service provider should be contracted to provide the services currently provided by
the
Information Technology Division and the Facilities Division.
A 10-year service contract should be agreed with the selected service provider.
The feasibility study developed high-level designs of the current organization, processes,
systems and
operating models, plus an outline Business Case for the required project. The external
consultants
also made the following recommendations for the management of the project:
Use PRINCE2.
Set up the project with 4 management stages:
Stage 1. Standard PRINCE2 initiation activities.
Stage 2. Create detailed designs (future organization, processes, systems and operating
models) and the service level agreement between MFH and the future service
provider.
Stage 3. Request and evaluate proposals, select service provider and agree contract.
Stage 4. Transfer equipment and staff, transfer responsibility for service provision and run
trial period.
Initial estimates indicated that the project would cost £2.5m and take two years to
complete.
MFH senior management agreed that there was a case for outsourcing, and accepted the
recommendations as a basis for the project. There is an expected saving of £20m over 10
years.
The Outsourcing project has completed the Starting up a Project process and is now in the
initiation stage. Because of the strategic importance of the project, the MFH Chief
Executive Officer has taken the role of Executive. A PRINCE2-experienced Project
Manager has been appointed from within MFH. Staff within the business functions being
outsourced will work with the external consultants who conducted the feasibility study to
define the detailed designs.
Which 2 statements should be recorded under the Timescale heading?

A.

The contract with the selected service provider will be agreed during stage 3.

B.

The expected benefits will be calculated over 10 years from completion of the project.

C.

If more MFH divisions are added to the scope of the services to be outsourced, the
project timescale will be extended and the realization of benefits will be delayed.

D.

The expected benefits should start to be realized as soon as the outsourced services
become operational at the end of stage 4.

E.

The transfer of equipment and staff is estimated to take six weeks.

Which of the following statements describes an outcome?

A.

Any of the projects specialist products

B.

A result of the change derived from using the project's products

C.

A measurable improvement resulting from a change

D.

Something perceived as advantages by a stakeholder

Who is responsible for ensuring that the value-for-money solution is constantly
reassessed?

A.

Business Assurance

B.

Senior User

C.

Corporate or Programme Management

D.

Reject Support

Scenario
A central government department, the Ministry of Food Hygiene (MFH), faces increasing
pressure to cut costs, better manage suppliers’ performance and reduce the confusion
caused by inadequate internal controls, outdated standards and outdated technology.
External consultants were employed to conduct a feasibility study to identify options to
address the problems, and the likely costs and benefits. The following options were
considered:
Do nothing.
Re-engineer selected business functions.
Outsource selected business functions.
The feasibility study concluded that there was a case for outsourcing the MFH Information
Technology
Division and the Facilities Division (maintenance of buildings and grounds). The
recommendations were:
One service provider should be contracted to provide the services currently provided by
the
Information Technology Division and the Facilities Division.
A 10-year service contract should be agreed with the selected service provider.
The feasibility study developed high-level designs of the current organization, processes,
systems and
operating models, plus an outline Business Case for the required project. The external
consultants
also made the following recommendations for the management of the project:
Use PRINCE2.
Set up the project with 4 management stages:
Stage 1. Standard PRINCE2 initiation activities.
Stage 2. Create detailed designs (future organization, processes, systems and operating
models) and the service level agreement between MFH and the future service
provider.
Stage 3. Request and evaluate proposals, select service provider and agree contract.
Stage 4. Transfer equipment and staff, transfer responsibility for service provision and run
trial period.
Initial estimates indicated that the project would cost £2.5m and take two years to
complete.
MFH senior management agreed that there was a case for outsourcing, and accepted the
recommendations as a basis for the project. There is an expected saving of £20m over 10
years.
The Outsourcing project has completed the Starting up a Project process and is now in the
initiation stage. Because of the strategic importance of the project, the MFH Chief
Executive Officer has taken the role of Executive. A PRINCE2-experienced Project
Manager has been appointed from within MFH. Staff within the business functions being
outsourced will work with the external consultants who conducted the feasibility study to
define the detailed designs.
Which 2 statements should be recorded under the Business options heading?

A.

The re-engineering of selected business functions would not provide the required
outcome.

B.

The lack of up-to-date technology in MFH means a re-engineering of existing services
will not necessarily deliver the performance improvements required.

C.

Use external consultants to provide guidance on the detailed design of the outsourced
services.

D.

Set up a PRINCE2 project to deliver the outsourced services.

E.

Review a list of service providers to determine a short-list of possible service providers.

Scenario
Additional Information
During the initiation stage the Project Manager met with the Marketing Director to find out
more about the requirements of the promotional calendar and recorded the following notes:
There has been a reduction in the order numbers at the MNO Manufacturing due in part to
the increased marketing activities of its competitors. 10% of customers have not re-ordered
in this financial year and staff morale is poor. A number of skilled staff have left as a result
and replacement staff have not been recruited due to the reduced operation. If the project
is successful, a recruitment campaign will be required to fill the existing staff vacancies and
there may be a requirement for additional staff. Operational costs are likely to increase
because skilled staff are expensive and difficult to find.
In financial terms, there were a total of 1,500 orders in the last financial year, each with an
average profit of £2k. The Marketing department believes that sending a promotional
calendar to our current and prospective customers would increase orders by at least 10%
with a minimum of 10 further orders from the list of prospective customers within 12 months
from the date of distribution.
The Marketing Director will be funding the project from the business marketing budget. She
believes that the effect of a good company image portrayed by a successful calendar would
last into a second year. She has forecast the same increase in orders for a second year
and predicts that the annual employee satisfaction survey will show a measurable
improvement in staff morale.
A number of alternatives were explored, including:
20% discount for all repeat customers - not cost-effective and very short term
A promotional calendar as a free Christmas gift - would target current and
prospective customers and the benefits would last into a second year
A series of television and press advertisements· was too expensive
A direct mail shot to all customers - benefit would be short term
Creation of an internet website - would not suit all customers
The calendar is seen as the favored option, as long as the company's competitors do not
increase their marketing activity. Whilst the Marketing department wants a very high
quality, glossy product, the project management team must be aware of the cost this will
incur.
Which 2 statements should be recorded under the Expected dis-benefits heading?

A.

A high quality, glossy product will involve additional costs.

B.

Individuals in the engineering team who are not selected to appear in the calendar
photographs will become de-motivated.

C.

The calendar may not result in the expected 10% increase in orders.

D.

Because the Calendar project is a priority for the MNO Manufacturing Company, the
delivery of other projects within the Marketing department will be delayed.

E.

The calendar may not result in the 10 further orders from the list of prospective
customers in 12 months.

Scenario
A central government department, the Ministry of Food Hygiene (MFH), faces increasing
pressure to cut costs, better manage suppliers’ performance and reduce the confusion
caused by inadequate internal controls, outdated standards and outdated technology.
External consultants were employed to conduct a feasibility study to identify options to
address the problems, and the likely costs and benefits. The following options were
considered:
Do nothing.
Re-engineer selected business functions.
Outsource selected business functions.
The feasibility study concluded that there was a case for outsourcing the MFH Information
Technology
Division and the Facilities Division (maintenance of buildings and grounds). The
recommendations were:
One service provider should be contracted to provide the services currently provided by
the
Information Technology Division and the Facilities Division.
A 10-year service contract should be agreed with the selected service provider.
The feasibility study developed high-level designs of the current organization, processes,
systems and
operating models, plus an outline Business Case for the required project. The external
consultants
also made the following recommendations for the management of the project:
Use PRINCE2.
Set up the project with 4 management stages:
Stage 1. Standard PRINCE2 initiation activities.
Stage 2. Create detailed designs (future organization, processes, systems and operating
models) and the service level agreement between MFH and the future service
provider.
Stage 3. Request and evaluate proposals, select service provider and agree contract.
Stage 4. Transfer equipment and staff, transfer responsibility for service provision and run
trial period.
Initial estimates indicated that the project would cost £2.5m and take two years to
complete.
MFH senior management agreed that there was a case for outsourcing, and accepted the
recommendations as a basis for the project. There is an expected saving of £20m over 10
years.
The Outsourcing project has completed the Starting up a Project process and is now in the
initiation stage. Because of the strategic importance of the project, the MFH Chief
Executive Officer has taken the role of Executive. A PRINCE2-experienced Project
Manager has been appointed from within MFH. Staff within the business functions being
outsourced will work with the external consultants who conducted the feasibility study to
define the detailed designs.
Which 2 statements should be recorded under the Expected dis-benefits heading?

A.

An investment of £2.5m is required.

B.

Staff morale will be negatively affected.

C.

The project will take two years to deliver.

D.

Staff may lose the opportunity to work in Information Technology.

E.

MFH will lose direct control over the outsourced business functions.