Business Case Flashcards
Actions related to managing business justification should be responsible for each action? "A. Executive. B. Senior user. C. Senior supplier. D. Project manager. E. Team manager. F. Project assurance." 1. 'Ensure that the law firm that is working on the contract between the singer and the record company will make a profit.
C. Senior supplier.
Correct. The law firm is an external spplier and therefore the senior supplier should be accountable for the supplier’s business case. Ref tab 6.1
Actions related to managing business justification should be responsible for each action? "A. Executive. B. Senior user. C. Senior supplier. D. Project manager. E. Team manager. F. Project assurance." 2. At a benefits review of the album launch, state whether the album sales met the targets specified in the business case.
B. Senior user
Correct. At benefit reviews the senior user should provide statements of actual benefit achievements compared to forecast benefits. Ref tab 6.1
Actions related to managing business justification should be responsible for each action? "A. Executive. B. Senior user. C. Senior supplier. D. Project manager. E. Team manager. F. Project assurance." 3. Monitor monthly spend against the agreed budget on behalf of the record company.
F. Project assurance
Correct. Project assurance should monitor project finance on behalf of corporate, programme management or the customer. Ref tab 6.1
The Music Album Project is part of a programme to contract new singers. The ‘artwork’ is being produced by an external graphic designer. The graphic designer’s profit has been documented in the record company’s business case.
Is this appropriate, and why?
No, because the graphic designer’s business justification should not be part of the project’s business case.
Correct. The project’s business case for a customer’s project is separate from a supplier’s business justification for bidding for, and working on that customer’s project. The customer needs to ensure that their project is viable and risks are acceptable, bearing in mind the suppliers chosen. A supplier would have to ensure that they will benefit from the work they undertake on the project. Ref 6.3.3
The project is in the initiation stage. When negotiating with the record company on behalf of the singer, the singer’s agent stated that this type of music represents 3% of the total music market. The singer’s agent understands the music industry and has been asked to specify how much profit the record company should expect to make from the sales of this album.
Is this appropriate, and why?
No, because the senior user should be accountable for specifying the benefits which justify the project.
Correct. The singer’s agent is an external supplier who cannot be responsible for the benefits in the record company’s business case. The senior user is accountable for specifying the benefits. Ref tab 6.1, C.3
“Statements from the business case for the Music Album Project.
Under which heading of the business case (A-F) should the statements be recorded?”
“A. Reason.
B. Business options.
C. Expected benefits.
D. Expected dis-benefits.
E. Timescale.
F. Major risks.”
1. It has been decided to invest in a new singer.
B. Business options
Correct. This identifies why the recommended business option was chosen. Ref A.2.2
“Statements from the business case for the Music Album Project.
Under which heading of the business case (A-F) should the statements be recorded?”
“A. Reason.
B. Business options.
C. Expected benefits.
D. Expected dis-benefits.
E. Timescale.
F. Major risks.”
2. We need to keep up with our competitors who have seen an increase in sales from the new singers they are signing with.
A. Reason
Correct. This is one of the reasons why the project is required. Ref A.2.2
“Statements from the business case for the Music Album Project.
Under which heading of the business case (A-F) should the statements be recorded?”
“A. Reason.
B. Business options.
C. Expected benefits.
D. Expected dis-benefits.
E. Timescale.
F. Major risks.”
3. Current customers may not buy from us if they see a change in the style of music we sell. This may cause a decrease in overall sales.
F. Major risks
Correct. The focus of this project is to increase sales. This is a threat to the company’s existing sales, and is therefore a major risk. Ref A.2.2
During the ‘initiating a project’ process, the Vice President (VP) estimated that the Music Album Project should generate sales that exceed production costs. However, the sales estimate may be too high, and therefore the record company may not make a profit. The VP will undertake business assurance and the Marketing Manager, who is the senior user, will undertake user assurance.
Is it appropriate for the VP to be responsible for assessing the effect of low sales on the business case, and why?
Yes, because business assurance reviews risks and their impact on the business case.
Correct. The role of business assurance, which the Vice President (VP) is undertaking, should assess the impact of the risk of low sales on the business case. Ref C.7, A.2.1
The Vice President (VP) was appointed as executive of the Music Album Project, which is now closing. During the project, extra funding was required and approved by the CEO. However, this funding was given on the condition that, when closing the project, the executive prepares an end project report showing the results of the project against its planned targets in the business case.
Is this an appropriate condition, and why?
No, because the project manager is responsible for preparing the end project report to assess project performance and results.
Correct. The project manager is responsible for preparing the end project report. One section in this report is the assessment of the results of the project against the expected benefits in the business case. Ref tab 6.1, 20.4.4, C.5.1, A.8.2
