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inadequate internal controls, outdated standards and outdated technology.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?

Which of the following is False?
A Successful project management team should.

HOTSPOT
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.

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

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

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

Who is responsible for ensuring that Communication Management Strategy is appropriate and that
planned communication activities actually take place?

Which of the following roles cannot be combined?

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 Marketing Director should be appointed as the Executive for
this project?

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?