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to cut costs, better manage suppliers performance and reduce the confusion caused by inadequate internal controls, outdated standards and outdated technology.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 operatingmodels) 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 Reasons heading?
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A. B. C. D. E.CD.
http://www.whatisprince2.net/prince2-theme-business-case.phpBased on the given scenario, the Ministry of Food Hygiene (MFH) is facing increasing pressure to cut costs, better manage supplier 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 feasibility study recommended outsourcing the MFH Information Technology Division and the Facilities Division as a way to cut costs and better manage supplier performance. The study also recommended using PRINCE2 to manage the outsourcing project and identified four management stages to be used in the project.
The MFH senior management agreed with the feasibility study's recommendations and accepted them as a basis for the project. The project has completed the Starting up a Project process and is now in the initiation stage. The MFH Chief Executive Officer has taken the role of Executive, and a PRINCE2-experienced Project Manager has been appointed from within MFH.
The question asks which two statements should be recorded under the Reasons heading. From the given options, statements A and C should be recorded under the Reasons heading.
Statement A is relevant because the feasibility study concluded that re-engineering existing services would not necessarily deliver the required performance improvements due to the lack of up-to-date technology in MFH. Therefore, outsourcing the IT and Facilities divisions was recommended as a solution.
Statement C is also relevant because the MFH needs to deal with the increasing pressure to cut costs and better manage supplier performance. Outsourcing the IT and Facilities divisions is one way to achieve these goals.
Statements B and D are not relevant because they are not reasons for outsourcing the IT and Facilities divisions. Statement B suggests that providing re-engineered services in-house will remove the need to transfer staff to a service provider, but this is not a reason for outsourcing. Statement D suggests that relocating staff to the selected service provider's premises will mean that no property transfer is required, but this is not a reason for outsourcing either.
Statement E is not directly relevant to the question because it does not relate specifically to outsourcing the IT and Facilities divisions. However, it is still a valid point that the inadequate controls, outdated standards, and outdated technology in MFH must be addressed, and outsourcing may be one way to do so.