ScenarioA 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to cut costs, better manage suppliers' performance and reduce the confusion caused by inadequate internal controls, outdated standards and outdated technology.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 TechnologyDivision 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?
Answer(s): C,D
Outcomes: C and D reflect quantified and strategic benefits appropriate for Expected benefits in PRINCE2.A) Incorrect: value at £80m is not stated or validated; project baseline shows £20m savings, not contract value.B) Incorrect: strategic advantage of industry services is a qualitative benefit not an expected measurable benefit in this scenario.C) Correct: £20m total expected savings over 10 years at current prices is explicitly stated as the business case benefit.D) Correct: stabilizing costs at agreed levels through a 10-year contract aligns with delivering predictable, controlled operating costs.E) Incorrect: £2.5m is the initial project cost, not the demonstrated total expected benefit; “considerable savings” are not quantified here.
ScenarioA 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?
Answer(s): C,E
The two correct statements reflect dis-benefits: C) the project will take two years to deliver; E) MFH will lose direct control over the outsourced business functions.A) Incorrect: investment cost is a project cost, not a dis-benefit to stakeholders; it’s a financial input, not a dis-benefit outcome.B) Incorrect: staff morale is a potential HR impact but is not explicitly a dis-benefit in the IFSC context unless linked to delivery; the scenario focuses on project outcomes and governance.D) Incorrect: loss of opportunity for IT staff is a potential HR risk, but the dis-benefit should relate to project delivery/governance; it is not stated as a direct project outcome.C) Correct: project duration is a dis-benefit impacting benefits realization and timing.E) Correct: outsourcing reduces MFH’s direct control, a recognized dis-benefit in outsourcing arrangements.
ScenarioA 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 InformationTechnology 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?
Answer(s): A,B
The contract timing is a stage 3 activity and the benefit realization period spans 10 years, aligning with A and B.A) Correct: Stage 3 covers procurement and contracting; agreement with the selected service provider occurs during Stage 3.B) Correct: Benefits are measured over a 10-year horizon in the business case, reflecting the outsourcing value realization period.C) Incorrect: Scope changes would affect benefits and schedule, but the statement about extending timescale is not a defined Timescale entry from the plan; it’s a potential risk, not a fixed timing event.D) Incorrect: Benefits realization begins only after the service is operational, not solely at end of Stage 4; timescale should reflect staged benefits timing.E) Incorrect: Six weeks transfer is not specified or standardized; timescale should derive from plan milestones, not a provided estimate.
ScenarioA 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 theInformation 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?
Answer(s): B,D
The two statements B and D correctly identify major risk areas: B reflects resistance to outsourcing due to changes in staff contracts, which can impede transfer to the service provider and affect benefits realization; D highlights reliance on feasibility-derived duration, risking continuing business problems if the schedule is not realistic. A is wrong because market conditions affecting provider availability is less likely to be a major project risk once a long-term contract is contemplated; C misstates contract economics and profit impact as if internal factors drive provider profit; E is a governance concern but not a major risk at initiation stage since stage plan is explicit.
HOTSPOT (Drag and Drop is not supported)ScenarioA 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.
Answer(s): A
Which of the following statements describes an outcome?
Answer(s): B
An outcome is the result of applying the project’s products to achieve a change, i.e., a measurable effect produced by the change. A) Incorrect because specialists’ products are outputs, not outcomes. C) Incorrect as it defines benefits or value, not the broader outcome. D) Incorrect since stakeholders’ perceived advantages describe benefits, not the actual outcome itself. B) Correct because it captures the result arising from using the project’s products to achieve the intended change.
Which of the following should NOT be included in the business case?
Answer(s): D
A business case should include why the project is needed, options considered, and risks, but the business approach is not a component; it describes how the benefits will be realized, not the justification itself. A) Reasons are essential to justify the Initiative.B) Major Risks must be identified to assess viability.C) Business options are required to demonstrate the chosen path among alternatives.D) Business approach is not part of the business case content.
When considering the business options in the business case, which of these is NOT an option?
The correct answer is B) Do the maximum because business options should reflect feasible levels of investment and risk; “do nothing, ” “do the minimum, ” and “do something” are typical strategic options, whereas “do the maximum” is not a standard option in a business case analysis.A) Do nothing: valid baseline option representing no change.C) Do the minimum: viable alternative to preserve value with minimal investment.D) Do something: viable option representing targeted intervention to achieve benefits.
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