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caused by inadequate internal controls, outdated standards and outdated technology.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.
Lines 1 to 6 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
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 Major risks heading?

A.

Due to market conditions a suitable service provider may not be found, possibly leading
to premature closure of the project.

B.

Owing to employment contract changes staff may resist outsourcing, which would make
it difficult to transfer staff to the selected service provider.

C.

MFH's operations may be reduced and the 1a-year contract may not achieve its
estimated value of £80m, which would reduce the service provider's profit.

D.

The initial estimates, taken from the feasibility study report, indicate that the project will
take two years to complete, which means that the business problems would remain for this
period.

E.

The management stages recommended by the consultants may not be appropriate,
resulting in confusion in planning.

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 benefits heading?

A.

Increase orders by at least 10% with a minimum of 10 further orders from the list of
prospective customers within 12 months.

B.

It will be similar to calendars sent out in previous years

C.

The Marketing department believes that the benefits of a good company image, as
portrayed by a successful calendar, will last into a second year and bring the same
increase in orders.

D.

The calendar will contain photos of both staff and company products.

E.

The Marketing department want a very high quality, glossy product as they believe this
will be more appealing to customers

Additional Information
Chief Executive Officer (CEO): He started the company 25 years ago and knows his job
very well. He injured his leg two years ago which has restricted his visits to the engineering
area. As CEO he has an overall perspective of the business strategic requirements and the
authority to commit resources as required.
Marketing Director: She has been with the company for three years, following a
successful career with a publicity company. She has the ability to represent the needs of
the business, particularly as this is a marketing project. She has the authority to commit the
annual business marketing budget, from which the project will be funded, as she sees
appropriate. She will be responsible for monitoring the expected benefits of the calendar, in
particular the improvement of the company's image.
Engineering Manager: He has been responsible for many engineering innovations in the
company and is still as keen and energetic as the day he started. VVhilst he will not be part
of the project team, his staff will feature in the photos for the promotional calendar.
Central Records: This group of five staff looks after all company records and document
control. They now maintain all project files.
Bright Lights: This is the local office supplies company. It supplies all the stationery and
office equipment needs of the company and will supply the stationery for this project.
Portraits ltd: This is a professional photographic company with a number of excellent
photographers and a history of successful work. This company has been selected to take
the photos for the company calendar. It has yet be decided which of the photographers to
use.
Which 2 statements explain why the CEO should be appointed as the Executive for this
project?

A.

He started the company 25 years ago.

B.

He knows his job very well.

C.

He restricts his visits to the engineering area.

D.

He has the authority to commit resources as required.

E.

He has an overall perspective of the business's strategic requirements.

Additional Information
Chief Executive Officer (CEO): He started the company 25 years ago and knows his job
very well. He injured his leg two years ago which has restricted his visits to the engineering
area. As CEO he has an overall perspective of the business strategic requirements and the
authority to commit resources as required.
Marketing Director: She has been with the company for three years, following a
successful career with a publicity company. She has the ability to represent the needs of
the business, particularly as this is a marketing project. She has the authority to commit the
annual business marketing budget, from which the project will be funded, as she sees
appropriate. She will be responsible for monitoring the expected benefits of the calendar, in
particular the improvement of the company's image.
Engineering Manager: He has been responsible for many engineering innovations in the
company and is still as keen and energetic as the day he started. VVhilst he will not be part
of the project team, his staff will feature in the photos for the promotional calendar.
Central Records: This group of five staff looks after all company records and document
control. They now maintain all project files.
Bright Lights: This is the local office supplies company. It supplies all the stationery and
office equipment needs of the company and will supply the stationery for this project.
Portraits ltd: This is a professional photographic company with a number of excellent
photographers and a history of successful work. This company has been selected to take
the photos for the company calendar. It has yet be decided which of the photographers to
use. Which 2 statements explain why the Sales Manager should be appointed as User
Assurance for this project?

A.

He joined the company last year with huge enthusiasm and is keen to increase sales.

B.

He can provide an evaluation of the potential impact the calendar will have on sales.

C.

He is able to advise on suitable stakeholder engagement of current and prospective
customers.

D.

He would like to move into the Marketing department in the future and sees this as an
opportunity to work closely with the Marketing Director.

E.

He can resolve any conflict in requirements between the Sales department and the
Marketing department.

Additional Information
Chief Executive Officer (CEO): He started the company 25 years ago and knows his job
very well. He injured his leg two years ago which has restricted his visits to the engineering
area. As CEO he has an overall perspective of the business strategic requirements and the
authority to commit resources as required.
Marketing Director: She has been with the company for three years, following a
successful career with a publicity company. She has the ability to represent the needs of
the business, particularly as this is a marketing project. She has the authority to commit the
annual business marketing budget, from which the project will be funded, as she sees
appropriate. She will be responsible for monitoring the expected benefits of the calendar, in
particular the improvement of the company's image.
Engineering Manager: He has been responsible for many engineering innovations in the
company and is still as keen and energetic as the day he started. VVhilst he will not be part
of the project team, his staff will feature in the photos for the promotional calendar.
Central Records: This group of five staff looks after all company records and document
control. They now maintain all project files.
Bright Lights: This is the local office supplies company. It supplies all the stationery and
office equipment needs of the company and will supply the stationery for this project.
Portraits ltd: This is a professional photographic company with a number of excellent
photographers and a history of successful work. This company has been selected to take
the photos for the company calendar. It has yet be decided which of the photographers to
use.Which 2 statements explain why Central Records should be appointed as Project Support
for this project?

A.

They control the receipt, identification, versions, storage and issue of all project products
within the company's projects.

B.

They already exist within the organization and have been with the company for many
years.

C.

They will ensure compliance with all company policies and procedures.

D.

They perform a quality assurance function across all projects.

E.

They have knowledge of the organizational standards that will be applicable to the
project.

Additional Information

Further information on some resources who could be involved in the project:
Outcome Account Manager: He represents Outcome which is a recruitment agency that
provides specialist outsourcing resources. Outcome provided the consultants who carried
out the feasibility study and the same consultants will be providing support and guidance to
the Information Technology and Facilities teams during the project.
Director of Finance Division: She was transferred from the Information Technology
Division 12 months ago. She is responsible for ensuring a cost-conscious approach is
adopted in all operational and project activities across the Ministry of Food Hygiene.
Hardware Manager: Reports to the Director of Information Technology. He provides
computer hardware to all business functions but has little awareness of the needs of his
colleagues working in software.
Payroll Manager: Reports to the Director of Finance. He is a very experienced andefficient qualified accountant who has much of the responsibility of running the Finance
Division on behalf of the Director of Finance. He has been involved in drafting the Ministry's
business strategy and assisting in a full business risk assessment. He also drafted the
corporate Business Case standards.
Which 2 alternative actions apply to the proposed business assurance for this project?

A.

Remove because he will be impacted by the project and therefore represents a user.

B.

Replace with 'Project Manager' because this is a simple project that does not require
additional business assurance.

C.

Add Outcome Consultants' because they carried out the feasibility study.

D.

Add 'Director of Finance Division' because she is responsible for checking that any
supplier and contractor payments are authorized.

E.

Retain because he is familiar with the Ministry of Food Hygiene business strategy, the
business level risk assessment and the Business Case standards.

Which of the following represents the four key characteristics a good Project board should
display?

A.

Authority, Credibility, Commitment, Availability

B.

Authority, Credibility, Delegation, Availability

C.

Authority, Availability, Connections, Delegation

D.

Authority, Credibility, Connections, Delegation

In which Management product would the Project Board specify where the authority for
change requests lies?

A.

Risk Management Strategy

B.

Quality Management Strategy

C.

Communication Strategy

D.

Configuration Management Strategy

Which of the following statements is true of the business interest on the project?

A.

Ensures the project provides value for money

B.

Ensures the requirements for the project are defined

C.

Ensures the products produced meet the desired quality

D.

Represents the users of the product

Additional Information

Further information on some resources who could be involved in the project:
Outcome Account Manager: He represents Outcome which is a recruitment agency that
provides specialist outsourcing resources. Outcome provided the consultants who carried
out the feasibility study and the same consultants will be providing support and guidance to
the Information Technology and Facilities teams during the project.
Director of Finance Division: She was transferred from the Information Technology
Division 12 months ago. She is responsible for ensuring a cost-conscious approach is
adopted in all operational and project activities across the Ministry of Food Hygiene.
Hardware Manager: Reports to the Director of Information Technology. He provides
computer hardware to all business functions but has little awareness of the needs of his
colleagues working in software.
Payroll Manager: Reports to the Director of Finance. He is a very experienced and
efficient qualified accountant who has much of the responsibility of running the Finance
Division on behalf of the Director of Finance. He has been involved in drafting the Ministry's
business strategy and assisting in a full business risk assessment. He also drafted the
corporate Business Case standards.
Which 2 alternative actions apply to the proposed Senior Supplier for this project?

A.

Retain because she is responsible for the design of the future Information Technology
organization and working practices.

B.

Add 'Director of Facilities' because he is responsible for the design of the future
organization, processes, systems and operation models for Facilities.

C.

Add 'Hardware Manager' because he provides computer hardware to all business
functions and will be impacted by the outcome.

D.

Remove because she only represents the Information Technology Division.

E.

Replace with 'Director of Facilities' because he supports the initiative and has many
ideas about how to improve the service.

Additional Information