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to cut costs, better manage suppliers performance and reduce the confusion caused by inadequate internal controls, outdated standards and outdated technology.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?
Click on the arrows to vote for the correct answer
A. B. C. D. E.AB.
Under the Timescale heading, the two statements that should be recorded are:
A. The contract with the selected service provider will be agreed during stage 3. D. The expected benefits should start to be realized as soon as the outsourced services become operational at the end of stage 4.
Here's why:
A. The contract with the selected service provider will be agreed during stage 3. In the PRINCE2 project management methodology, the project is divided into management stages. The second stage is to create detailed designs and the service level agreement between MFH and the future service provider, while the third stage is to request and evaluate proposals, select a service provider, and agree on a contract. Therefore, it is reasonable to expect that the contract with the selected service provider will be agreed during stage 3.
D. The expected benefits should start to be realized as soon as the outsourced services become operational at the end of stage 4. The expected benefits of the project are the savings of 20m over 10 years. The project involves outsourcing the Information Technology Division and the Facilities Division, which should lead to cost reductions, better supplier performance management, and improved internal controls. The fourth stage of the project is to transfer equipment and staff, transfer responsibility for service provision, and run a trial period. Once the outsourced services become operational at the end of stage 4, the expected benefits should start to be realized. It is important to note that the realization of benefits may take some time, and that ongoing monitoring and evaluation will be necessary to ensure that the expected benefits are being achieved.
C and E are not suitable for the Timescale heading because they do not relate to the timing of the project as a whole. Option C refers to a potential delay if more MFH divisions are added to the scope of the services to be outsourced, which is not relevant to the project timescale. Option E refers to the estimated time for transferring equipment and staff, which is important information but does not relate to the overall timescale of the project.