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to cut costs, better manage suppliers performance and reduce the confusion caused by inadequate internal controls, outdated standards and outdated technology.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 Expected dis-benefits heading?
Click on the arrows to vote for the correct answer
A. B. C. D. E.CE.
http://www.whatisprince2.net/prince2-theme-business-case.phpExpected dis-benefits refer to the potential negative impacts or drawbacks that the project may have on the organization or its stakeholders. In the given scenario, the two statements that should be recorded under the Expected dis-benefits heading are:
B. Staff morale will be negatively affected. E. MFH will lose direct control over the outsourced business functions.
Here's why:
B. Staff morale will be negatively affected: Outsourcing the Information Technology Division and the Facilities Division could lead to job loss, change in job roles, and work reassignment for the staff who were previously responsible for these functions. This could cause uncertainty, insecurity, and demotivation among the affected employees, which could impact their morale, productivity, and quality of work. Therefore, it is important to recognize this potential dis-benefit and develop strategies to minimize its impact on the employees.
E. MFH will lose direct control over the outsourced business functions: Outsourcing business functions involves transferring the responsibility of managing and delivering the services to an external service provider. While this may lead to cost savings and improved service quality, it also means that the organization loses direct control over these functions, which could have strategic, operational, and reputational implications. For instance, if the service provider fails to deliver the expected quality of service, it could reflect poorly on the organization, and there may be limited options to address the issue. Therefore, it is important to acknowledge this potential dis-benefit and develop effective governance and monitoring mechanisms to ensure that the service provider meets the agreed service levels and performance standards.
A. An investment of £2.5m is required: This statement does not belong under the Expected dis-benefits heading as it refers to the project cost, which is a known and expected investment that the organization needs to make to achieve the desired benefits. While it is important to manage the project budget and ensure that the costs are justified and controlled, it does not fall under the category of dis-benefits.
C. The project will take two years to deliver: This statement also does not belong under the Expected dis-benefits heading as it refers to the project timeline, which is a known and expected duration for the project completion. While it is important to manage the project schedule and ensure that the project is delivered on time, it does not fall under the category of dis-benefits.
D. Staff may lose the opportunity to work in Information Technology: This statement is similar to statement B and may be a potential dis-benefit for the affected staff. However, since statement B already captures this aspect, there is no need to repeat it under the Expected dis-benefits heading. Moreover, this statement may not apply to all staff members and may depend on their individual preferences, qualifications, and availability of alternative opportunities. Therefore, it is better to focus on the broader impact of staff morale rather than specific individual concerns.