SAMPLE PRACTITIONER QUESTIONS

Question 1

SCENARIO Copy this and have this up on a separate screen

Background

MakeITwell is an IT component manufacturer which is structured into product divisions with centralized administrative functions: Human Resources (HR), Finance, Information Technology (IT) etc. It has traditionally pursued a strategy based on superior quality and reliability. It operates in a highly competitive global market characterized by the following factors:

• New overseas competitors whose products are increasingly matching the functionality and reliability of MakeITwell’s products
• Pressure to respond more quickly to shifts in customer demands and market trends
• Fierce bargaining over prices by the purchasing departments of the major IT hardware suppliers.

Additionally, MakeITwell faces a number of internal challenges as follows:

• Production costs and central overheads exceed those of MakeITwell’s competitors * Production processes and systems do not match the flexibility achieved by competitors. Consequently, it costs MakeITwell more time and money to respond to revised customer requirements
• Until recently change initiatives were led by the relevant divisions. Many suffered from delivery issues (delays and cost escalation) and have failed to realize the benefits intended
• Staff turnover is increasing – of particular concern is the loss of highly skilled engineers.

A review of recently completed initiatives found the following issues:

• Cost and benefits forecasts were highly inaccurate and incomplete – there was evidence of significant benefits being missed at the planning stage
• The strategic contribution was uncertain with many initiatives claiming to deliver the same benefits. There was also confusion as to the drivers of the key elements in the value chain
• Many initiatives were highly complex and the delivery methods applied were not sufficiently flexible to address this complexity
• Unplanned benefits were not being systematically identified and exploited resulting in significant potential benefits not being realized
• Mitigation of dis-benefits was often poorly planned and managed. For example, the Nordic Customer Engagement Initiative (NCEI) that sought to focus attention on the most profitable customers, had not considered the impact on other customers. In the end the position had been recovered without loss of revenue, but this had required significant management effort
• Initiatives had focused on processes and systems change. However, they had failed to obtain the full commitment of staff to the need for cultural change..

The CEO has come to the conclusion that MakeITwell faces a pivotal period in its history – it either adapts to the emerging competitive environment or it will see its competitive position damaged severely.

The CEO has recently persuaded the Corporate Board to approve the establishment of a Transformational Change Portfolio (TCP). This is designed to deliver benefits that contribute to the following portfolio objectives:

• Cost savings that result in reduced overhead expenditure and savings in manufacturing expenditure
• Capacity improvements measured in terms of reduced unit costs
• Greater manufacturing flexibility
• Increased turnover via new product development and more effective marketing.

The TCP includes a range of change initiatives designed to collectively achieve these objectives. This includes initiatives already underway (‘in flight’) and new initiatives including:
* A Business Intelligence (BI) initiative to enable improved management decision-making via more accurate forecasts
* An HR Transformation Programme to improve performance and reduce spend on the central HR function
* A lean manufacturing programme to improve efficiency and reduce production cost * A communications programme to improve communication with staff
* A staff re-engagement programme.

Answer 1

MakeITwell has also adopted best practice methods in project, programme and portfolio management supported by training programmes for all relevant staff.

The CEO has appointed a new Portfolio Director to act as the champion for the TCP. The Portfolio Director has argued strongly that the success of the TCP will depend on ensuring the portfolio adopts a benefits-led approach. Furthermore this requires a constant focus on ensuring benefits are realized and that funding allocations are revised in response to changing business priorities – reflecting the dynamic market conditions and emergent nature of MakeITwell’s strategy. Despite some Board-level uncertainty, the Portfolio Director has, with the CEOs support, gained agreement to the adoption of a Managing Benefits approach.

The progress to date includes the following:

• A first version of MakeITwell’s value chain has been completed and has been used to inform selection of initiatives for inclusion in the TCP
• A Benefits Management Forum has been established to promote more effective Benefits
  Management practices across MakeITwell. The forum consists of Project and Programme Management (PPM) representatives and Business Change Managers from across the organization
• An approach to benefits mapping has been adopted which includes the following headings: Enabling changes, Business changes, Intermediate benefits, End benefits, Investment objectives, and Strategic drivers
• Initiative and portfolio-level governance structures have been revised. This includes a Portfolio Investment Committee (which approves the benefits management practices and inclusion of initiatives in the TCP) and Portfolio Delivery Committee which monitors benefits realization at a portfolio-level. A Portfolio Benefits Manager has also been appointed to facilitate the development of effective benefits management
• A standard approach to benefits categorization has been agreed. It is being applied to all initiatives in the TCP with benefits being categorized as follows:
  ◦ Economic benefits – which result in direct budgetary savings
  ◦ Efficiency benefits – for example staff time savings from changed working practices ◦ Effectiveness benefits – products of a higher quality
  Each of the above are sub-divided into cashable and non-cashable sub-categories.
• Additionally, benefits are to be classified as ‘mission critical’, ‘highly desirable’ and ‘desirable’ based on the scale of the agreed contribution to the portfolio objectives. This year, cashable benefits have been prioritized as ‘mission critical’ to reflect the urgency of cost reduction and to free up funds to invest in other initiatives. This also reflects the policy adopted by MakeITwell to use as its primary investment decision criterion, the optimization of Net Present Value (subject to any stated constraints) from the available funds. Early payback is a desirable/secondary criterion
• Implementation of standard benefits management documentation to be applied across the portfolio
• The Five Case Business Case (with strategic, economic, financial, commercial and management cases) has been adopted with three iterations at various stages in the business change lifecycle:
  ◦ Strategic Outline Case (SOC) – prepared to inform the decision as to whether the initiative should be funded and included in the TCP
  ◦ Outline Business Case (OBC) – prepared to inform the decision as to whether the preferred solution represents value for money and to approve the development through to Full Business Case
  ◦ Full Business Case (FBC) – prepared to support the decision to go to contract or to commence implementation. By this stage all benefits should be signed off with the relevant benefit owners and ‘booked’ where possible. The FBC should be accompanied by a Benefits Management Strategy, Benefits Realization Plan and Benefit Profiles
• Regular stage gate reviews and six monthly portfolio-level reviews have been instigated
• A standard Benefits Dashboard Report has been introduced for all initiatives. This enables consolidation at a portfolio level of progress data on a range of financial and non-financial benefits.

END OF SCENARIO

Question 2

Question 1A - Principles

Answer the following question about the principles that support the efficient and effective operation of benefits management in MakeITwell.

Column 1 is a list of benefits management actions and techniques being utilized by MakeITwell. For each action/technique in Column 1, select from Column 2 the Managing Benefits Principle that the technique MOST clearly demonstrates. Each selection from Column 2 can be used once, more than once or not at all.

Column 1
1 Establishment of the MakeITwell Benefits Management Forum.
2 Booking the benefits in divisional business plans.
3 Documenting a Portfolio Benefits Management Framework.
4 Applying modular approaches to initiative development.

Column 2
A Align benefits with strategy
B Start with the end in mind
C Utilize successful delivery methods
D Integrate benefits with performance management
E Apply effective governance
F Develop a value culture

Part A

1 A B C D E F
2 A B C D E F
3 A B C D E F
4 A B C D E F

Answer 2

Answer

Part A

1 F
2 D
3 E
4 C

1 Correct [F]: Developing a value culture should be managed as a behavioural change programme with a focus on coordination, commitment and competencies. A Benefits Management Forum can facilitate coordination across the change
portfolio (Section 3.8).

2 Correct [D]: Booking the benefits in business plans, budgets, and performance targets is an aspect of integrating benefits with performance management (Section 3.5).

3 Correct [E]: A key characteristic of effective governance is that it is clear. This includes ensuring everyone understands who is responsible for what and accountable to whom, and what decisions are made where, when, and using what criteria. This is facilitated by documenting a Portfolio Benefits Management Framework (Section 3.7.1).

4 Correct [C]: In a complex and uncertain environment, successful delivery methods include breaking large initiatives down into smaller ones (Section 3.4).

Question 3

Question 1B - Principles

Using the Scenario, answer the following question about the principles that support the efficient and effective operation of benefits management in MakeITwell.

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.

Option Assertion Reason
A True True AND the reason explains the assertion
B True True BUT the reason does not explain the assertion
C True False
D False True
E False False

1
Assertion
Understanding the value chain underpinning MakeITwell’s business model will help determine the strategic contribution of each initiative.
Reason
Benefits represent the measurable improvement from change which contributes to an organizational objective.

2
Assertion
Application of the ‘Start with the end in mind’ principle helps identify the benefits from ‘in flight’ initiatives.
Reason
Benefits should be used to justify the cost of investment in a change initiative.

3
Assertion
Benefits-led change is based on the recognition that benefits realization occurs only after the initiative is completed.
Reason
Benefits realization is often dependent on not only the delivery of project outputs, but also business and behavioural change.

4
Assertion
The application of disciplined delivery methods in MakeITwell should be adapted to the local circumstances.
Reason
If change initiatives are delivered late or don’t achieve the desired outcomes, benefits realization will be adversely affected.

5
Assertion
Clarity about who is accountable for benefits realization is key to the principle: ‘Apply effective governance’.
Reason
Accountability seeks to ensure that MakeITwell knows who to punish when benefits fall below forecast.

6
Assertion
Applying the technique of ‘decision conferencing’ supports the development of a value culture.
Reason
Active engagement of senior management in benefits management practices demonstrates their commitment to a value culture.

Part B

1 A B C D E
2 A B C D E
3 A B C D E
4 A B C D E
5 A B C D E
6 A B C D E

Answer 3

Answer

Part B

1 A True True
2 E False False
3 D False True
4 B True True
5 C True False
6 A True True

1 True: MakeITwell’s strategic objectives are not clearly stated in measurable terms. Addressing this provides a basis for assessing the strategic contribution of
individual initiatives (Section 3.2).

True: Benefits are the measurable improvements which contribute to one or
more organizational objectives. Determining this contribution depends
on an understanding of the organization’s value chain/business
model. Therefore, the answer is A (Section 2.2).

2 False: Application of the ‘Start with the end in mind’ principle means that
identification of the problem to be solved and the benefits of doing so
precede scoping of the initiative (Section 3.3).

False: Initiatives should be established to realize the required benefits rather than
benefits being used to justify the cost of investment in a change initiative (Section 3.1, 3.3).

3 False: Benefits-led change is characterized by impatience for benefits and quick wins (Section 3.3, Table 3.1).

True: Benefits realization doesn’t just happen and is indeed often dependent on
business and behavioural changes (Section 3.4).

4 True: MakeITwell is operating in a dynamic environment characterized by
complexity, ambiguity and uncertainty. In such circumstances, disciplined
delivery methods should be adapted to suit the conditions (Section 3.4).

True: It is true that if change initiatives are delivered late or don’t achieve the
desired outcomes, then benefits realization will be adversely affected.
However, this does not explain why disciplined delivery methods should be
adapted to the local circumstances. Therefore, the answer is B (Section 3.4).

5 True: A key characteristic of effective governance is that there is clarity about
who is responsible for what and accountable to whom (Section 3.7).
False: Effective governance means accountability is based on learning and
continuous improvement rather than a blame culture (Section 3.7).

6 True: Adopting new roles and routines can assist behavioural change. So,
applying the technique of ‘decision conferencing’ whereby managers
actively engage in benefits management, does support the
development of a value culture (Section 3.8).

True: One of the keys to developing a value culture is senior management
commitment. Building this commitment is facilitated by senior managers
adopting new roles and routines including the technique of ‘decision
conferencing’. Therefore, the answer is A (Section 3.8).

Question 4

Question 2A: Identify & Quantify -

Using the Scenario and the additional information provided for this question in the Scenario Booklet, answer the following question about benefits mapping in the Identify & Quantify practice.

Column 1 is a list of entries from the draft benefits map for the HR Transformation Programme. For each entry in Column 1, select from Column 2 the benefits map heading under which that entry should appear. Each selection from Column 2 can be used once, more than once or not at all. All statements in Column 1 are true statements.

Column 1
1 Reduced administration expenditure
2 Reduced headcount required for central HR
3 Cultural change within HR to provide a support rather than a direct delivery role
4 Reduced central HR budget by 20%
5 Implementation of an on-line HR advice facility
6 Increased competitive pressure from on-line and overseas competitors

Column 2
A Strategic drivers
B Investment objectives
C End benefits
D Intermediate benefits
E Business changes
F Enabling changes

Additional Information (Additional Information for part-question 2A)

HR Transformation Programme

HR has a poor reputation among operational managers and consumes a relatively high percentage of Headquarters (HQ) spend. The following issues have been identified:

• Poor employee performance is not being effectively and promptly addressed
• Top performers are not adequately recognized
• Staff turnover among skilled staff is increasing
• Key processes such as recruitment and promotion exercises take an excessive amount of time.

In response, a programme is underway to reduce administration spend, whilst also making the system more responsive. This will be achieved by transferring more HR responsibility to line managers from the central HR function. This programme includes:

• A training programme for line managers
• A cultural change programme within the HR function to support the move to a more supportive role
• Nomination of central HR ‘guides’ to provide a point of contact for specialist advice to help line managers
• The design, development and implementation of a new HR IT system to replace the existing HR intranet resource.

Answer 4

Part A

1 B
2 D
3 E
4 C
5 F
6 A

1 Correct [B]: Investment objectives represent the organizational target for achievement for an initiative in relation to the strategic drivers. In this case, the HR transformation initiative is designed to address the issues of poor performance and HR consuming a relatively high percentage of HQ spend (Section 5.2.2.3)

2 Correct [D]: Intermediate benefits arise from a change initiative and can in turn enable the realization of the end benefits the initiative was designed to realize. In this case, shifting workload results in a reduced headcount requirement. However, the end benefit of a reduced budget will only be realized when the spare staff are taken off budget by being re-allocated to another budget or are released (Section 2.2.5, 5.2.2.3, Glossary).

3 Correct [E]: Business changes represent new ways of working required for benefits to be realized from the enabling changes. They are usually on-going rather than one-off changes. A cultural change programme to enable the full benefits of the enabling changes including the on-line HR advice facility is thus a business change (Section 5.2.2.3).

4 Correct [C]: End benefits are those the initiative is set up to realize and which confirm achievement of the investment objectives. In this case the investment objective is to reduce administration expenditure – this is achieved via reductions in the central HR budget (Section 2.2.5, Glossary).

5 Correct [F]: Enabling changes represent the necessary prerequisites for business change and are usually one-off such as implementation of a new IT system. Implementation of an on-line HR advice facility is therefore an enabling change (Section 5.2.2.3, Glossary).

6 Correct [A]: According to the scenario, a strategic driver for change is the increased competitive pressure from overseas competitors. Strategic drivers exist
independently of any single initiative (Section 5.2.2.3).

Question 5

Question 2B - Identify & Quantify

Part B

1 A B C D E
2 A B C D E
3 A B C D E
4 A B C D E

Additional Information for part-question 2B

A review of current benefits management practices and performance has identified a number of issues that have undermined the preparation of accurate and reliable benefits forecasts in initiative Business Cases. These issues include the following:

A. Confusing assumptions with knowledge B. Failure to identify all potential benefits
C. Not taking the probability of various potential outcomes into consideration when making the forecast
D. Expectation bias.
The Portfolio Benefits Manager has recently returned from a Managing Benefits training course and has recommended that the following techniques be applied to benefits forecasting as a matter of priority: Technique

1. The ‘dog that didn’t bark’ test
2. Optimism bias adjustments
3. Independent review by a function outside the sponsoring division
4. Monte Carlo simulation
5. Reference class forecasting
6. Requiring all business cases to include evidence both for and against the recommended option.

Answer 5

Part B

1 A B C D E
2 A B C D E
3 A B C D E
4 A B C D E

1 True: Confusing assumptions with knowledge derives in large part from a shared set of beliefs and values. Exposing forecasts to independent review helps
address this bias (Section 5.3.3.2, Appendix D).

True: ‘Groupthink’ refers to the tendency to confuse truth or knowledge with
assumptions. It derives in large part from a shared set of beliefs and values.
Exposing forecasts to independent review helps address this bias.
Therefore, the answer is A (Section 5.3.3.2, Appendix D).

2 True: The ‘dog that didn’t bark’ test asks whether all potential benefits have been
identified. It is therefore relevant to addressing the failure to identify all
potential benefits in the Business Case (Section 7.3, 7.9.1, Glossary).

False: The ‘dog that didn’t bark’ test assesses the benefits included in the Business
Case against the categories specified in the Portfolio Benefits Management
Framework rather than the Benefits Realization Plan (Section 7.3, Appendix B).

3 True: Monte Carlo simulation is used to calculate the probability distribution of
possible outcomes. It is therefore relevant to addressing issue C (Section
5.3.5.3, Glossary).

True: Monte Carlo simulation is indeed facilitated by the use of relevant
software. But this does not explain why this technique is relevant to issue C.
Therefore, the answer is B (Section 5.3.5.3, Glossary).

4 False: Expectation bias refers to the tendency to seek evidence that confirms existing beliefs and assumptions. Optimism bias adjustments are applied to
benefits forecasts and as such do not address this particular bias which is
directly addressed by technique 6 (Section 5.3.3.2, Appendix D).

True: Optimism bias adjustments are indeed used to address the tendency to overestimate the scale of benefits to be realized (Section 5.3.4).

Question 6

Question 3A - Value & Appraise

Answer the following question about approaches applied to valuing benefits.
Column 1 is a list of benefits from initiatives included within MakeITwell’s Transformational Change Portfolio (TCP). For each benefit in Column 1, select from Column 2 the approach to valuing the benefit that is MOST appropriate. Each selection from Column 2 can be used once, more than once or not at all.

1 Column 1
More efficient processing, thus enabling increased production from the current budgetary provision.
2
3 Reduced risk of potential systems failure with uncertain cost implications.
Reduced time spent on routine data preparation, which can be used for other activities.

Column 2
A Increased revenue
B Reduction in total production cost
C Lower unit costs
D Value of work enabled
E Willingness to pay

Part A

1 A B C D E F
2 A B C D E F
3 A B C D E F

Answer 6

Part A

1 C
2 E
3 D

1 Correct [C]: Efficiency improvements enabling ‘more from the same’ should be measured in terms of reduced unit costs (Section 6.2.2.2).

2 Correct [E]: Reduced risk is a non-financial benefit and as such the most appropriate approach to valuing it is willingness to pay (Section 6.2.2.3).

3 Correct [D]: The value of staff time savings is the value of the use to which the time saved is put (Section 6.2.2.2).

Question 7

Question 3B - Value & Appraise

Answer the following question about approaches applied to initiative appraisal.
Column 1 is a list of investment rationales for initiatives being considered for inclusion in the TCP. For each entry in Column 1, select from Column 2 the approach to investment appraisal that is MOST appropriate. Each selection from Column 2 can be used once, more than once or not at all.

Column 1
1 IT infrastructure upgrade enabling increased use of current applications, new approved applications, and new applications which are currently at the preapproval stage.
2 Replacement of the stock control system which is essential to maintain business as usual and avoid system failures.
3 New just in time manufacturing system designed to streamline production processes to reduce the cost of production and enable increased throughput.

Column 2
A Cost-benefit analysis
B Real options
analysis
C Cost-effectiveness analysis
D Multi-criteria analysis

Part B

1 A B C D
2 A B C D
3 A B C D

Answer 7

Part B

1 B
2 C
3 A

1 Correct [B]: In this case there is a degree of uncertainty as to the benefits to be derived from unplanned expansion in users and new applications. In such circumstances, real options analysis is relevant as it specifically takes the value of flexibility into consideration (Section 6.3.2, Glossary).

2 Correct [C]: In this case the benefits refer to maintaining Business as Usual. Therefore, cost-effectiveness analysis is most relevant (Section 6.3.3.1).

3 Correct [A]: In this case the benefits are anticipated in terms of reduced costs and lower unit costs. Therefore, cost-benefit analysis is most relevant (Section 6.3.1).

Question 8

Question 3C: Value & Appraise - Additional Information

Using the Scenario and the additional information provided for this question in the Scenario Booklet, answer the following questions about the Value & Appraise practice.

1 If there are no limits on funding available, but MakeITwell only has the capacity to manage one initiative from the five available, it should invest in initiative 4.
Is this an appropriate decision for this scenario?

A No, because initiative 2 has the highest NPV and should, therefore, be invested in first.
B No, because initiative 1 has a higher NPV than initiative 4.
C Yes, because initiative 4 has the highest productivity index.
D Yes, because initiative 4 breaks even earlier than the alternative initiatives.

2 If MakeITwell only has £750,000 to invest over five years, it should invest in initiatives 4 and 5. Is this an appropriate decision for this scenario?

A No, because initiative 2 has the highest NPV and should therefore, be invested in first.
B No, because initiatives 1 and 2 have a higher combined NPV.
C Yes, because initiatives 4 and 5 provide the highest possible NPV from the funds available.
D Yes, because investing in more than one initiative helps diversify risk.

3 If MakeITwell has only £1,300,000 to invest over five years in initiatives that pay back in current value terms by the end of year 2, it should invest in initiatives 2, 4 and 5. Is this an appropriate decision for this scenario?

A No, because initiatives 2, 4 and 5 are not affordable.
B No, because initiative 2 does not pay back in current value terms by the end of year 2.
C Yes, because investing in three initiatives helps minimize the risk of failure.
D Yes, because initiatives 2, 4 and 5 have the highest combined NPV from the available investment.

4 MakeITwell has only £1,200,000 to invest over five years in initiatives that pay back in undiscounted terms by the end of year 2. In addition, 10% of benefits from initiative 2 are available to be re-cycled to fund other initiatives. In these circumstances it should invest in initiatives 2, 4 and 5.
Is this an appropriate decision for this scenario?

A No, because the funding available is insufficient for initiatives 2, 4 and 5.
B No, because initiative 2 doesn’t pay back in undiscounted terms by the end of year 2.
C Yes, because this maximizes the NPV from the available funds.
D Yes, because re-cycling benefits enables all initiatives that meet the hurdle rate of return to be funded.

Additional Information for part-question 3C

The following data has been collected for five initiatives in the Transformational Change Portfolio (TCP).

Initiative 1 Year Year Year Year Year Year
5 year cost 600 0 1 2 3 4 5 Totals
PI* 0.388 £,000’s £,000’s £,000’s £,000’s £,000’s £,000’s
Benefits 0 175 250 250 250 175 1100
Costs 600 600
Annual Net Flow -600 175 250 250 250 175 500
Annual NPV
Cumulative net flow -600 -600 159
-425 207
-175 188 75 171 325 109 500 233

Cumulative NPV -600 -441 -234 -46 124 233
Initiative 2 Year Year Year Year Year Year
5 year cost 550 0 1 2 3 4 5 Totals
PI* 0.488 £,000’s £,000’s £,000’s £,000’s £,000’s £,000’s
Benefits 0 200 200 200 200 200 1000
Costs 300 50 50 50 50 50 550
Annual Net Flow -300 150 150 150 150 150 450
Annual NPV
Cumulative net flow -300 -300 136
-150 124 0 113 150 102 300 93
450 269

Cumulative NPV -300 -164 -40 73 175 269
Initiative 3 Year Year Year Year Year Year
5 year cost 275 0 1 2 3 4 5 Totals
PI* -0.063 £,000’s £,000’s £,000’s £,000’s £,000’s £,000’s
Benefits 0 60 60 60 60 60 300
Costs 150 25 25 25 25 25 275
Annual Net Flow -150 35 35 35 35 35 25
Annual NPV
Cumulative net flow -150 -150 32
-115 29
-80 26
-45 24
-10 22 25 -17

Cumulative NPV -150 -118 -89 -63 -39 -17
Initiative 4 Year Year Year Year Year Year
5 year cost 250 0 1 2 3 4 5 Totals
PI* 0.758 £,000’s £,000’s £,000’s £,000’s £,000’s £,000’s
Benefits 0 100 100 100 100 100 500
Costs 0 50 50 50 50 50 250
Annual Net Flow 0 50 50 50 50 50 250
Annual NPV
Cumulative net flow 0 0 45 50 41
100 38
150 34
200 31
250 190

Cumulative NPV 0 45 87 124 158 190
Initiative 5 Year Year Year Year Year Year

Answer 8

Part C

1 A
2 C
3 B
4 C

1 A Correct: If the only constraint is the number of initiatives that can be invested in, MakeITwell should invest in the initiative with the greatest NPV (Section 6.3.1).
B Incorrect: Initiative 1 does have a higher NPV than initiative 4, but initiative 2 has an even higher NPV. If there are no constraints on investment aside from the number of initiatives, then initiative 2 should be funded (Section 6.3.1).
C Incorrect: Initiative 4 does have the highest Productivity Index (PI), but as funding isn’t a constraint, the PI is not relevant (Section 6.3.1).
D Incorrect: Initiative 4 does break even earlier than the other initiatives, but the scenario specifies that MakeITwell has chosen to optimize NPV as its primary investment criterion (Section 6.3.1).

2 A Incorrect: Initiative 1 does have the highest NPV, but initiatives 4 and 5 offer a highercombined NPV from the £750,000 available for funding. Where funding is
constrained the relevant decision rule is to rank initiatives using the Productivity
Index (Section 6.3.1).
B Incorrect: Initiatives 1 and 2 do have a higher combined NPV (£508,000) than initiatives 4 and 5 (£406,000), but they are not affordable – they would cost £1,150,000 whereas only £750,000 is available (Section 6.3.1).
C Correct: NPV is optimized (£406,000) from the £750,000 available for funding by
investing in initiatives 4 and 5 (Section 6.3.1).
D Incorrect: Investing in more than one initiative may or may not diversity risk depending on the characteristics of the initiatives concerned. According to the scenario the decision criterion adopted by MakeITwell is to optimize NPV (Section 6.3.1).

3 A Incorrect: Initiatives 2, 4 and 5 would cost £1,300,000 and are therefore affordable if £1,300,000 is available for investment (Section 6.3.1).
B Correct: Initiative 2 pays back in cash/undiscounted terms by the end of year 2, but not in current value/discounted terms (Section 6.3.1).
C Incorrect: Investing in three initiatives may diversify risk depending on the characteristics of the initiatives concerned. However, the decision criterion adopted by MakeITwell is to optimize NPV subject to any stated constraints (Section 6.3.1).
D Incorrect: Initiatives 2, 4 and 5 do have the highest combined NPV from the available investment of £1,300,000. However, initiative 2 does not pay back in current value terms by the end of year 2 (Section 6.3.1).

4 A Incorrect: The funding available is £1,200,000 plus 10% of the benefits from initiative 2 which is £100,000. So £1,300,000 is available which is sufficient to fund
initiatives 2, 4 and 5 (Section 6.3.1).
B Incorrect: Initiative 2 does pay back in undiscounted terms by the end of year 2 (Section 6.3.1).
C Correct: Investing in initiatives 2, 4 and 5 maximizes the NPV return from the available funds of £1,300,000. Furthermore all three initiatives meet the payback criterion (Section 6.3.1).
D Incorrect: Re-cycling benefits from initiative 2 enables initiatives 2, 4 and 5 to be funded. Initiative 1 also meets the stipulated hurdle rate of return, but funding is
insufficient to also fund this initiative (Section 6.3.1).

Question 9

Question 4A - Plan

1 Which 2 statements would appear in the Benefits Management Strategy?

A Ramp up of the staff time saving benefit will be 25% in month 1, 50% in month 2, and 100% from month 3.
B Benefits dependency networks will be used to confirm understanding of the enabling and business changes upon which benefits realization depends.
C Current status on benefits realization for efficiency benefits is classified as Amber-Red.
D The total forecast efficiency savings from the initiative are £2,500,000.
E Responsibility for commissioning end of tranche/phase benefit reviews lies with the Senior Responsible Owner (SRO).

2 Which 2 statements would appear in the Benefit Realization Plan?

A The forecast value of programme benefits in the efficiency cashable category totals to £150,000 by month 9.
B Benefits will be reported using the Transformational Change Portfolio categorization system.
C The Benefits Dashboard report will be prepared for the Programme Board for the second Friday each month.
D Efficiency benefits have been assigned to the ‘mission critical’ category.
E Current status on benefits realization for economy benefits is classified as Amber-Green.

3 Which 2 statements would appear in the Economic Case of the Business Case?

A All benefits are required to be validated with benefits owners to help prevent double counting.
B Responsibility for realizing the staff time saving benefit in HR lies with the HR Business Change Manager.
C The highest Net Present Value is provided by option B.
D The forecast Net Present Value of the programme is £450,000 over five years.
E Economic benefits will be re-cycled to address the funding shortfall in year 2.

Part A

1 A B C D E
2 A B C D E
3 A B C D E

Answer 9

Part A

1 B & E
2 A & C
3 C & D

1 A Incorrect: The Benefit Profile contains details of the ramp up of an individual benefit (Appendix B).
B Correct: The Benefits Management Strategy includes the approach to benefits mapping to be applied (Appendix B).
C Incorrect: A statement on benefits realization status would appear in the Benefits
Realization Report (Section 8.4.3.1).
D Incorrect: A statement on the benefits forecast would appear in the Benefits Realization Plan (Appendix B).
E Correct: The Benefits Management Strategy includes a description of the roles,
accountabilities and responsibilities for benefits planning and realization. It also
includes the review and assessment process (Appendix B).

2 A Correct: The Benefits Realization Plan is used as the baseline against which to track benefits realization. Therefore, it will contain a schedule with aggregated
benefits data for each time period (Section 7.9, Appendix B).
B Incorrect: A description of the approach to benefits categorization to be used will be included in the Benefits Management Strategy (Appendix B).
C Correct: The benefits reporting schedule will be included in the Benefits Realization Plan (Appendix B).
D Incorrect: A description of priorities in terms of benefit types sought will be included in the Benefits Management Strategy (Appendix B).
E Incorrect: A statement on benefits realization status would appear in the Benefits
Realization Report (Section 8.4.3.1-2).

3 A Incorrect: Processes to ensure benefits are not double counted are addressed in the Benefits Management Strategy (Appendix B).
B Incorrect: The Benefit Owner for a benefit is recorded on the Benefit Profile (Section 4.5, Appendix B).
C Correct: The Economic Case demonstrates that the preferred option optimizes value for money (Table 7.7).
D Correct: The Economic Case includes a cost-benefit analysis (Table 7.7).
E Incorrect: This entry concerns affordability and therefore appears in the Financial Case of the Business Case (Table 7.7).

Question 10

Question 4B - Plan

Using the Scenario, answer the following question about initiative-level benefits management roles.
Column 1 is a list of benefits-related functions/actions undertaken on various initiatives within MakeITwell’s Transformational Change Portfolio (TCP). For each statement in Column 1, select from Column 2 the role responsible for undertaking this function/action. Each selection from Column 2 can be used once, more than once or not at all.

Column 1
1 Commissions a benefits review on the Nordic Customer Engagement initiative.
2 Agrees the Benefit Profile for the efficiency savings on the lean programme.
3 Assesses readiness of the Finance Department to adopt the new ways of working prior to implementation of the new Business Intelligence system.

Column 2
A Senior Responsible Owner
B Programme
Manager
C Business Change
Manager
D Benefit Owner
E Benefit Manager

Part B

1 A B C D E
2 A B C D E
3 A B C D E

Answer 10

Part B

1 C
2 D
3 C

1 Correct [C]: According to the scenario the NCEI is one in which the programme has closed. Therefore, responsibility for commissioning benefits reviews will reside with the Business Change Manager (Section 4.5, Appendix C).
2 Correct [D]: The Benefits Owner is responsible for agreeing the Benefit Profile prepared by the BCM (Section 4.5, Appendix C).
3 Correct [C]: The BCM is responsible for assessing readiness for change as part of pretransition (Section 7.5).

Question 11

Question 4C - Plan

Using the Scenario, answer the following question about the Plan practice.
Lines 1 to4 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 canbe used once, more than once or not at all.

Option Assertion Reason
A True True AND the reason explains the assertion
B True True BUT the reason does not explain the assertion
C True False
D False True
E False False

1
Assertion
Addressing the failure to identify all potential benefits is aided by a Portfolio Benefits Management Framework.
Reason
The Portfolio Benefits Management Framework includes a consistent set of benefits categories against which initiative benefits forecasts can be appraised.

2
Assertion
Addressing the failure to identify emergent benefits is aided by applying the technique of ‘booking the benefits’ early in the initiative lifecycle.
Reason
‘Booking the benefits’ helps align benefits realization with the performance management regime.

3
Assertion
Failing to plan effectively to mitigate dis-benefits on the Customer Engagement
Initiative is an example of value for money failure.
Reason
Value for money failure arises from the effect of optimism bias and strategic misrepresentation on accurate benefits forecasting.

4
Assertion
Confidence in the causes of benefits realization is helped by the identification of a chain of leading and lagging measures.
Reason
Lagging measures help address problems in attributing changes in performance to a particular initiative.

Part C

1 A B C D E
2 A B C D E
3 A B C D E
4 A B C D E

Answer 11

Part C

1 A
2 D
3 E
4 C

1 True: The failure to identify all potential benefits is addressed by the ‘dog that
didn’t bark’ test. This is aided by a Portfolio Benefits Management
Framework (Section 1.5, 7.3).
True: The Portfolio Benefits Management Framework includes a consistent set of
benefits categories against which initiative benefits forecasts can be
appraised – both for forecast benefits and to identify any potential benefits that
have been omitted from the Business Case. Therefore, the answer is A
(Section 7.3, 10.3.1, Appendix B).

2 False: ‘Booking the benefits’ is used to align benefits and performance
management. However, it can only be applied to benefits that have been
identified. Emergent benefits are in contrast unplanned (Section 3.5, 7.7.2,
Glossary).
True: ‘Booking the benefits’ aligns benefits realization with the performance
management regime by ensuring planned improvements are reflected in
organizational KPIs, budgets etc. Responsibility for these improvements is
reflected in individuals’ performance objectives (Section 3.5, 7.3).

3 False: Value for money failure refers to cases where benefits are realized but at
excessive cost. This is not the case with the Customer Engagement
Initiative; according to the scenario the failure to mitigate dis-benefits had no
financial implications (Section 7.7.1).
False: Value for money failure refers to cases where benefits are realized but at
excessive cost. This can be due to the effect of optimism bias and strategic
misrepresentation but on cost rather than benefits forecasting (Section 7.7.1).

4 True: Confidence in benefits realization is helped by the identification of a chain of leading and lagging measures because this helps address the attribution issue (Section 4.3.1, 7.6.5).
False: Leading rather than lagging measures help address problems in attributing
changes in performance to a particular

Question 12

Question 5A: Realize - Additional Information

Using the Scenario, answer the following question about the Transition Management element of the Realize practice on the HR Transformation Programme.
Column 1 is a list of true statements about activities undertaken as part of a programme. For each activity in Column 1, decide if the activity is part of transition management and select from Column 2 the transition management phase where it is MOST likely to be undertaken.

Column 1
1 Shut down the existing HR intranet resource which is to be replaced by the new HR IT system.
2 The Business Change Manager assesses the capability of the business unit to adopt the new ways of working.
3 The HR Director approves the commencement of the transition stage.

Column 2
A This is NOT part of transition management
B Managing pre-transition
C Managing transition
D Managing post-transition

Part A

1 A B C D
2 A B C D
3 A B C D

Answer 12

Part A

1 D
2 B
3 C

1 Correct [D]: Removing access to legacy systems is a part of the ‘Managing post-transition’ phase of transition management (Section 8.3.2).

2 Correct [B]: Change readiness assessment is part of the ‘Managing pre-transition’ phase (Section 7.5).

3 Correct [C]: SRO approval to commence transition is part of the ‘Managing transition’ phase of transition management (Section 8.3.1).

Question 13

Question 5B: Realize - Additional Information

Answer the following question about the initiative to improve communications.
Column 1 is a list of communications from the Portfolio Director to Business Case writers. For each communication in Column 1, decide if it is a ‘committed conversation’ and select from Column 2 the type of conversation that it represents. Each selection from Column 2 can be used once, more than once or not at all.

Column 1

1 Will you provide forecasts in accordance with the revised benefits eligibility guidance documented in the Portfolio Benefits Management Framework?

2 Inaccurate and unreliable benefits forecasts compromise our ability to make the best use of available funds. This needs to be addressed in time for the next strategic planning round.

3 We need to significantly improve the accuracy of forecasting.

Column 2

A Not a committed conversation
B Initiative conversation
C Conversation for understanding
D Conversation for performance
E Conversation for closure

Part B

1 A B C D E
2 A B C D E
3 A B C D E

Answer 13

Part B

1 D
2 C
3 B

1 Correct [D]: This is a ‘conversation for performance’ which are a network of requests and promises spoken to produce a specific action and result (Section 8.5.2).

2 Correct [C]: This is a ‘conversation for understanding’ in which people seek to understand the drivers and evidence for initiative conversations and specify the timeline for improvement (Section 8.5.2).

3 Correct [B]: This is an ‘initiative conversation’ which creates a call to action via an assertion, request, promise or declaration (Section 8.5.2).

Question 14

Question 5C: Realize - Additional Information

Using the Scenario and the additional information provided for this question in the Scenario Booklet, answer the following question about which technique is MOST appropriate to address the issues identified.
Lines 1 to4 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 canbe used once, more than once or not at all.

Option Assertion Reason
A True True AND the reason explains the assertion
B True True BUT the reason does not explain the assertion
C True False
D False True
E False False

Assertion
1 From those techniques shown, issue A is MOST effectively addressed by technique 8.
Reason
The ‘Scout and Beacon’ approach ensures that the original business case includes emergent benefits.

Assertion
2 From those techniques shown, issue B is MOST effectively addressed by technique 7.
Reason
‘Narrative leadership’ engages stakeholders at an emotional level.

Assertion
3 From those techniques shown, issue C is MOST effectively addressed by technique 3.
Reason
The ‘one version of the truth’ technique addresses the attribution issue.

Assertion
4 From those techniques shown, issue D is MOST effectively addressed by technique 4.
Reason
Normalized scales can be used with initiative weightings to represent progress at a portfolio level.

Part C

1 A B C D E
2 A B C D E
3 A B C D E
4 A B C D E

Answer 14

Part C

1 C
2 A
3 E
4 B

1 True: Failure to identify unplanned or emergent benefits is addressed by the
‘scout and beacon’ approach (Section 7.7.2).
False: The ‘scout and beacon’ approach helps identify emergent benefits which are
benefits that arise as the initiative is developed, deployed or implemented.
Therefore, they won’t appear in the original Business Case (Section 7.7.2).

2 True: Failure to obtain the full commitment of staff in the need for cultural change is addressed by ‘narrative leadership’ (Section 8.5.6).
True: ‘Narrative leadership’ engages stakeholders at an emotional level and
this explains why it addresses the failure to obtain the full commitment of staff in
the need for cultural change. Therefore, the answer is A (Section 8.5.6).

3 False: ‘One version of the truth’ seeks to ensure an authoritative source of
information for decision-making rather than addressing problems in linking
operational performance improvements to a specific change initiative. This
issue is addressed by using leading measures (Section 8.4.1, 8.4.3.3,
Glossary).
False: The attribution issue is addressed by using leading as well as lagging
measures rather than ‘one version of the truth’ which seeks to ensure an
authoritative source of information for decision-making (Section 8.4.1, 8.4.3.3,
Glossary).

4 True: Normalized scales can be used to combine assessments of progress on
a range of financial and non-financial benefits (Section 8.4.3.1).
True: Weightings can be applied to normalized scales to represent progress
at a portfolio level. However, this does not explain why normalized scales can
be used to represent progress on the initiative Benefits Realization Report.
Therefore, the answer is B (Section 8.4.3.1).

Question 15

Question 6A: Review - Additional Information

Using the Scenario, answer the following question about the Review practice.
Column 1 is a list of statements made to the team undertaking the post-investment review of the Customer Engagement initiative. For each statement in Column 1, select from Column 2 the cognitive bias that the statement MOST clearly demonstrates. Each selection from Column 2 can be used once, more than once or not at all.

Part A

1 A B C D E
2 A B C D E
3 A B C D E

Answer 15

Part A

1 D
2 B
3 A

1 Correct [D]: The ‘Texas Sharpshooter fallacy’ refers to the tendency to evaluate an initiative in terms of the benefits actually realized, rather than whether the intended benefits were realized (Section 9.5).
2 Correct [B]: The ‘Hindsight bias’ refers to the tendency to see past events as being more predictable than they actually were (Section 9.5).
3 Correct [A]: The ‘Self-serving bias’ refers to the tendency to see successes as being due to our efforts/abilities, but failure is due to external factors or bad luck (Section 9.5).

Question 16

Question 6B: Review - Additional Information

Using the Scenario and the additional information provided for this question in the Scenario Booklet, answer the following questions about the Review practice.
Remember to select 2 answers to each question.

1 Which 2 questions are within the scope of a Gate A review within MakeITwell?

A Are all identified benefits signed off by the benefit owners?
B Are the identified high-level benefits linked to the drivers of the elements of MakeITwell’s value chain?
C Is a complete set of benefits (analyzed by scale and recipient) recorded in the Benefits Management Strategy?
D How many suggestions for improvement under the champion-challenger model have been received?
E Does the assessment of achievability reflect the division’s track record in benefits realization?

2 Which 2 questions are within the scope of a Gate C review within MakeITwell?

A How do benefits realized during roll out compare to forecast?
B Does the recommended delivery option represent best value for money?
C Are arrangements for the post-implementation review clearly identified, including who will undertake it and when?
D Have benefit owners been agreed for all significant benefits?
E What level of maturity has the TCP achieved for benefits management?

3 Which 2 questions are within scope of a Gate D review within MakeITwell?

A Has a benefit profile been completed for all material benefits?
B Was the conversion ratio applied to ‘economic’ benefits realistic?
C Has the Portfolio Investment Committee commissioned a pre-mortem review?
D Has the forecast positive Net Present Value been achieved?
E Did the achieved improvement in staff job satisfaction lead to the anticipated fall in staff turnover?

Part B

1 A B C D E
2 A B C D E
3 A B C D E

Answer 16

Part B

1 B & E
2 C & D
3 D & E

1 A Incorrect: Benefits should be signed off by benefit owners on the Benefit Profile. However, this is done at Full Business Case stage (ref Scenario) rather than the SOC reviewed at Gate A which is equivalent to ‘Start Gate’ (Section 9.3.1).
B Correct: ‘Start Gate’ includes assessing whether the strategic contribution is clearly articulated. One way in this can be achieved is by linking benefits to the drivers of the elements of the organization’s business model (Section 3.2, 9.3.1).
C Incorrect: The Benefits Management Strategy defines the approach to managing benefits realization rather than detailing the benefits to be realized. The latter will appear in the Benefits Realization Plan (Appendix B). Furthermore, one would not
expect to see a completed set of benefits at SOC stage which instead focuses
on establishing the case for change and precedes the selection of the preferred
option (Section 7.9.1).
D Incorrect: Review of suggestions for improvement under the ‘champion-challenger’ model will be monitored at portfolio-level. At an initiative level, it might be reviewed as part of lessons learned, but this would be at the post-implementation not ‘Start Gate’ review (Section 9.5, 11.3.3).
E Correct: ‘Start Gate’ includes assessing whether benefits forecasts are informed by an ‘outside view’ such as the division’s track record in benefits realization (Section 5.3.4, 9.3.1).

2 A Incorrect: Gate C concerns the investment decision/readiness for service and will therefore occur prior to roll out (Section 9.6, Additional Information).
B Incorrect: Consideration as to whether the recommended delivery option represents best value for money is addressed at OBC stage, i.e. Gate B in MakeITwell (Section 7.9.1, Additional Information).
C Correct: Gate C should include review of the Benefits Management Strategy which includes arrangements for post-implementation review (Section 7.9.1, 9.5,
Additional Information).
D Correct: Gate C includes review of the Benefits Realization Plan and the Benefit Profiles. This includes whether individuals (Benefit Owners) have been identified who are responsible for benefits realization (Section 9.6).
E Incorrect: Gate D reviews are applied at initiative rather than portfolio level (Section 9.5, 10.3.3.1).

3 A Incorrect: Consideration as to whether a Benefit Profile has been completed for all material benefits will take place at Gate C rather than Gate D (Section 9.6).
B Incorrect: Conversion ratios are applied to ‘efficiency’ rather than ‘economic’ benefits (Section 6.2.2.2).
C Incorrect: Pre-mortems are undertaken on behalf of the SRO rather than the Portfolio Investment Committee (Section 9.2, Table 9.1, 9.3.2).
D Correct: Post-implementation review includes assessing the value for money attained which will be evidenced by whether the forecast Net Present Value has been achieved (Section 9.5.2).
E Correct: One of the objectives of the post-implementation review is to validate the assumptions underpinning the organization’s business model. Consideration as to whether the improvement in staff job satisfaction achieved led to the
anticipated fall in staff turnover is therefore within scope of the postimplementation review (Section 9.5.2).

Question 17

Question 6C: Review - Additional Information

Using the Scenario and the additional information provided for this question in the Scenario Booklet, answer the following questions about the periodic portfolio-level review within MakeITwell.

1 On initiative 6, the five year Benefits Forecast variance should be escalated to the Portfolio Delivery Committee. Is this appropriate for this scenario?

A No, because the variance exceeds £100,001 and should therefore be escalated to the Portfolio Investment Committee.
B No, because the variance is positive.
C Yes, because the monetary value control limit required for a level 3 escalation is not met.
D Yes, because the percentage value control limit required for a level 3 escalation is not met.

2 On initiative 7, the five year Benefits Forecast variance should be escalated to the Portfolio Delivery Committee. Is this appropriate for this scenario?

A No, because the initiative has an IRR of less than 5% and should, therefore, be escalated to the Portfolio Investment Committee
B No, because the SRO has explained that the variance is due to the delayed start date for benefits realization which falls within a level 1 escalation
C Yes, because both the percentage and monetary variances are within the control limits for a level 2 escalation.
D Yes, because the Portfolio Delivery Committee reviews benefits realization at a portfolio level.

3 On initiative 8, the current year Benefits Realization variance should be escalated to the Portfolio Investment Committee. Is this appropriate for this scenario?

A No, because the monetary variance falls within the control limit band for a level 2 escalation.
B No, because the percentage variance falls within the control limit band for a level 2 escalation.
C Yes, becauseboth thepercentage and monetary variances fall within the control limit band for a level 3 escalation.
D Yes, because the monetary variance falls within the control limit band for a level 3 escalation.

4 On initiative 9, the SRO’s Confidence in Benefits Realization assessment should be escalated to the Portfolio Investment Committee. Is this appropriate for this scenario?

A No, because it meets the standard banding requirement at the Outline Business Case stage.
B No, because it falls within the banding requirement for escalation to the Portfolio Delivery Committee
C Yes, because the current assessment falls below the required standard at the Full Business Case stage.
D Yes, because the current assessment falls two bands below the required standard at the Outline Business Case stage.

Part C

1 A B C D
2 A B C D
3 A B C D
4 A B C D

Answer 17

Part C

1 D
2 A
3 D
4 C

1 A Incorrect: The monetary value variance does exceed the relevant control limit of £100,001. However, both this and the percentage variance need to exceed the stated control limits to trigger escalation (Section 8.4.3.3, 10.3.5).
B Incorrect: The additional information specifies that both negative and positive variances will be subject to review. In the latter case, this is to assess whether there are lessons learned that can be applied more widely (Section 8.4.3.3, 10.3.5).
C Incorrect: The variance is 6% and £120,000. The monetary value variance exceeds the control limit for level 3 escalation but not the percentage variance. Both need to be exceeded to trigger escalation to the Portfolio Investment Committee (Section 8.4.3.3, 10.3.5).
D Correct: The variance is 6% and £120,000. The latter exceeds the control limit for level 3 escalation but not the former – both need to be exceeded to trigger escalation to the Portfolio Investment Committee (Section 8.4.3.3, 10.3.5).

2 A Correct: The monetary and percentage variances both fall within the control limits for a level 2 escalation (Portfolio Delivery Committee). However, the fall in benefits forecast also means a negative NPV when cash flows are discounted at 5%. Any change that results in an IRR of less than 5% is escalated to the Portfolio
Investment Committee (Section 8.4.3.3, 10.3.3.2, 10.3.5).
B Incorrect: The variance in forecast benefits may be due to the delayed start date for benefits realization which does fall within the limits for a level 1 escalation.
However, the additional information stipulates that each type of variance is
treated separately for escalation purposes (Section 8.4.3.3, 10.3.3.2, 10.3.5).
C Incorrect: The percentage and monetary variances are within the control limits for a level 2 escalation. However, the fall in benefits forecast also means a negative NPV when cash flows are discounted at 5%. Any change that results in an IRR of less than 5% is escalated to the Portfolio Investment Committee (Section 8.4.3.3,
10.3.3.2, 10.3.5).
D Incorrect: The Portfolio Delivery Committee monitors benefits realization at a portfolio level but this variance concerns the five year forecast. Variances that exceed the stated control limits are in any case escalated to the Portfolio Investment Committee (Section 8.4.3.3, 10.3.3.2, 10.3.5).

3 A Incorrect: The £20,000 variance exceeds the £10,001 control limit, triggering a level 3 escalation (Section 8.4.3.3, 10.3.3.2, 10.3.5).
B Incorrect: The percentage variance does fall with the control limit band for a level 2 escalation. However, the monetary variance triggers a level 3 escalation as only
one of the percentage and monetary control limits needs to be exceeded to
trigger escalation to the next level (Section 8.4.3.3, 10.3.3.2, 10.3.5).
C Incorrect: The percentage variance at 6.7% falls within the level 2 control limit (Section 8.4.3.3, 10.3.3.2, 10.3.5).
D Correct: In the case of current year to date Benefits Realization variances, only one of the monetary value and percentage variance control limits need to be exceeded to trigger escalation. On initiative 8 the 6.7% percentage variance is within the level 2 limit, but the £20,000 variance exceeds the £10,001 control limit
triggering a level 3 escalation (Section 8.4.3.3, 10.3.3.2, 10.3.5).

4 A Incorrect: The SRO’s confidence in benefits realization (6.5) falls within the Silver banding required at Outline Business Case stage. However, initiative 9 is at the Full Business Case stage (Section 8.4.3.3, 10.3.3.2, 10.3.5).
B Incorrect: Initiative 9 is at the Full Business Case stage and the SRO’s confidence in benefits realization (6.5) falls within the Silver banding. This is below the ‘gold’
standard rating required at the FBC stage. Escalation to the Portfolio Investment
Committee is therefore appropriate (Section 8.4.3.3, 10.3.3.2, 10.3.5).
C Correct: Initiative 9 is at the FBC stage and the SRO’s Confidence in Benefits
Realization (6.5) falls within the ‘silver’ banding. This is below the required
standard of ‘gold’ banding at the FBC stage. Escalation to the Portfolio
Investment Committee is therefore appropriate (Section 8.4.3.3, 10.3.3.2,
10.3.5).
D Incorrect: Initiative 9 is at the FBC stage and the assessment is one level below that required at this stage (Section 8.4.3.3, 10.3.3.2, 10.3.5).

Question 18

Question 7A: Portfolio-based application - Additional Information

Answer the following question about portfolio-level benefits management documentation.
Column 1 is a list of true statements about MakeITwell’s Transformational Change Portfolio (TCP). For each statement in Column 1, select from Column 2 the document in which it is MOST likely to appear. Each selection from Column 2 can be used once, more than once or not at all.

Column 1

1 Portfolio-level benefit reviews will be co-ordinated by the Portfolio Office on a six monthly basis.
2 Efficiency savings will be split into cashable and non-cashable categories.
3 Economic benefits of £3 million in HQ spend are forecast for the coming year.

Column 2

A Portfolio Dashboard Report
B Portfolio Benefits Management Framework
C Portfolio Benefits Realization Plan

Part A
1 A B C
2 A B C
3 A B C

Answer 18

Part A
1 B
2 B
3 C

1 Correct [B]: The Portfolio Benefits Management Framework contains the rules and guidelines by which benefits are managed. This includes their treatment across the business change lifecycle including at portfolio-level reviews (Section 10.3.7.1, Appendix B).

2 Correct [B]: The Portfolio Benefits Management Framework contains the rules and guidelines by which benefits are managed. This includes the benefits eligibility guidance including categorization (Section 10.3.7.1, Appendix B).

3 Correct [C]: The Portfolio Benefits Realization Plan includes a statement of the main benefits forecast to be realized in the year ahead, analysed by business unit and benefit category (Section 10.3.7.1, Appendix B).

Question 19

Question 7B: Portfolio-based application - Additional Information

Answer the following question about portfolio-level roles.
Column 1 is a list of actions relating to MakeITwell’s TCP. For each statement in Column 1, select from Column 2 the MOST appropriate role responsible for carrying out that action. Each selection from Column 2 can be used once, more than once or not at all.

Column 1
1 Chairs the Benefits Management Forum
2 Agrees a change to the control limits for escalating in-year variances from benefits forecast in the annual Benefits Realization Plan
3 Reviews the conclusions of the end-of-tranche reviews undertaken on the Business Intelligence initiative.

Column 2
A Portfolio Benefits Manager
B Portfolio Director
C Portfolio Delivery Committee
D Portfolio Investment Committee

Part B

1 A B C D
2 A B C D
3 A B C D

Answer 19

Part B

1 A
2 D
3 C

1 Correct [A]: The Portfolio Benefits Manager’s responsibilities include working with the Business Change Managers to promote more effective Benefits Management
practices. It would therefore be appropriate for this role to chair the Benefits
Management Forum (Appendix C.1).
2 Correct [D]: The Portfolio Investment Committee approves the Portfolio Benefits Management Framework and changes to it. This framework represents the rules and guidelines by which benefits will be managed including the control limits for reporting variances from the Benefits Realization Plan (Section 10.3.1, 10.3.7.2, Appendix C.1).
3 Correct [C]: ‘In flight’ gate reviews are undertaken on behalf of the Portfolio Delivery Committee (Section 10.3.3.1, Appendix C.1).

Question 20

Question 7C: Portfolio-based application - Additional Information

Using the Scenario and the additional information provided for this question in the Scenario Booklet, answer the following questions about the Portfolio Benefits Management Framework.
Remember to select 2 answers to each question.

1 Which 2 statements apply to Section A?
A No change to entry 1 because it expresses a measurable high-level benefit of the TCP.
B Move entry 1 to Section B because it concerns validation of the benefits.
C Delete entry 1 because it is an intermediate rather than an end benefit.
D Move entry 2 to Section B because it concerns benefits validation.
E Delete entry 2 because it concerns costs rather than benefits.

2 Which 2 statements apply to Section B?
A Move entry 3 to Section A because it describes high-level benefits that MakeITwell’s TCP is designed to achieve.
B No change to entry 3 because it refers to benefits categorization.
C No change to entry 4 because it concerns benefits validation.
D Move entry 4 to Section C because it concerns the treatment of benefits throughout the business change lifecycle.
E Move entry 4 to Section E because it concerns responsibilities for benefits forecasting, tracking and reporting.

3 Which 2 statements apply to Section C?
A Move entry 5 to Section E because it concerns a responsibility for benefits forecasting.
B No change to entry 5 because it concerns MakeITwell’s approach to benefits mapping.
C Delete entry 5 as this belongs in the relevant initiative-level Benefits Management Strategy.
D No change to entry 6 because it describes the approach to benefits mapping that will be applied across the TCP.
E Delete entry 6 because this relates to benefits dependency networks rather than benefits mapping.

4 Which 2 statements apply to Sections D and E?
A Delete entry 7 because benefits management ends with initiative closure
B No change to entry 7 because it describes an aspect of benefits management across the business change lifecycle.
C Move entry 7 to Section E because it describes a responsibility for benefits management.
D No change to entry 8 because it relates to an aspect of responsibility for benefits reporting.
E Move entry 8 to Section A because the post-implementation review helps validate the assumed drivers of MakeITwell’s business model.

Part C
1 A B C D E
2 A B C D E
3 A B C D E
4 A B C D E

Answer 20

Part C

1 A & D
2 B & C
3 A & D
4 B & D

1 A Correct: This does represent a high-level benefit the portfolio is designed to achieve along with the metric to be used. It is therefore appropriate to Section A
(Appendix B).
B Incorrect: This does represent a high-level benefit the portfolio is designed to achieve along with the metric to be used. It is therefore appropriate to Section A
(Appendix B).
C Incorrect: Capacity improvements and reduced unit costs are an end benefit the portfolio is designed to achieve. It is therefore appropriate to Section A (Appendix B).
D Correct: Validation includes agreeing the benefit with the recipient or owner and
‘booking’ them in relevant targets/plans. This is therefore appropriate to Section
B which includes benefits validation (Section 7.3, Appendix B).
E Incorrect: Reductions in unit cost are one of the high-level benefits the portfolio is designed to achieve. This entry concerns validation of those benefits and is
therefore appropriate to Section B (Appendix B).

2 A Incorrect: Entry 3 concerns benefits eligibility guidance and is therefore appropriate to Section B (Appendix B).
B Correct: Entry 3 concerns benefits eligibility guidance and is therefore appropriate to Section B (Appendix B).
C Correct: Entry 4 concerns benefits validation and is appropriate to Section B (Section 7.3, Appendix B).
D Incorrect: Entry 4 concerns benefits validation and is appropriate to Section B rather than Section C (Section 7.3, Appendix B).
E Incorrect: Entry 4 concerns benefits validation and is appropriate to Section B rather than Section E (Section 7.3, Appendix B).

3 A Correct: Entry 5 concerns responsibility for benefits mapping rather than the approach to be applied. It is therefore appropriate to Section E (Appendix B).
B Incorrect: Entry 5 concerns responsibility for benefits mapping rather than the approach to be applied. It is therefore appropriate to Section E rather than Section C (Appendix B).
C Incorrect: Entry 5 concerns the responsibility for benefits mapping to be applied to all initiatives in the TCP. As such, it is appropriate to the Portfolio Benefits
Management Framework (Appendix B).
D Correct: Entry 6 describes the approach to benefits mapping to be applied across the TCP. It is therefore appropriate to Section C (Appendix B).
E Incorrect: Benefits dependency networks are a form of benefits mapping. Entry 6
describes the approach to benefits mapping to be applied across the TCP. It is
therefore appropriate to Section C (Appendix B).

4 A Incorrect: Benefits management extends beyond initiative closure and the Portfolio Benefits Management Framework should specify how benefits will be managed post-initiative closure (Section 10.3.4).
B Correct: Benefits management extends beyond initiative closure and the Portfolio Benefits Management Framework should specify how benefits will be managed post-initiative closure (Section 10.3.4).
C Incorrect: Entry 7 concerns the requirement that responsibility be defined rather than who has that responsibility. As such, it is appropriate to Section D rather than
Section E (Appendix B).
D Correct: Entry 8 concerns who is responsible for benefits reporting post-initiative closure. As such, it is appropriate to Section E (Appendix B).
E Incorrect: Post-implementation review does help validate the assumed drivers of the business model. But entry 8 concerns who is responsible for benefits reporting
post-initiative closure. As such, it is appropriate to Section E (Appendix B).

Question 21

Question 8A - Implement & Sustain

Answer the following question about the relationship between benefits management and MakeITwell’s other key functions/activities in managing the Transformational Change Portfolio (TCP). Column 1 is a list of proposed actions. For each action in Column 1, select from Column 2 the key activity/function that benefits management will need to coordinate MOST closely with. Each selection from Column 2 can be used once, more than once or not at all.

Column 1
1 Determine whether each division has the capacity to absorb the combined business change impact of the TCP over the next 12 months.
2 Incorporate the planned impact of the TCP into divisional targets for the forthcoming year.
3 Implement consistent and effective approaches to managing inter-initiative dependencies.
4 Review the results of post-implementation reviews to assess to what extent the anticipated contribution to organizational objectives has been realized.
5 Ensure assessments of initiative achievability reflect the probability that forecast benefits will actually be realized.

Column 2
A Strategic & Business Planning
B Investment Appraisal &
Portfolio Prioritization
C Performance Management
D Financial & Management accounting
E Project & Programme management
F Commercial & Procurement
G Business as Usual

Part A

1 A B C D E F G
2 A B C D E F G
3 A B C D E F G
4 A B C D E F G
5 A B C D E F G

Answer 21

Part A

1 G
2 C
3 E
4 A
5 B

1 Correct [G]: Benefits management will liaise with Business as Usual in determining the change capacity and whether business change is appropriately scheduled (Table 4.1, 10.3.2.1).

2 Correct [C]: Incorporating benefits into divisional targets is an example of aligning benefits with performance management (Section 3.5, Table 4.1).

3 Correct [E]: Benefits management will work with the Project & Programme Management community in ensuring successful delivery as an enabler for benefits realization. A key part of this will be managing inter-initiative dependencies (Section 3.4, Table 4.1, 10.3.2.1).

4 Correct [A]: Benefits management will work with Strategic & Business Planning in validating the organization’s business model (Table 4.1).

5 Correct [B]: Benefits management will liaise with Investment Appraisal & Portfolio Prioritization in ensuring that benefits are reflected in assessments of both initiative attractiveness and achievability (Table 4.1).

Question 22

Question 8B - Implement & Sustain

Using the Scenario, answer the following questions about implementing and sustaining progress in benefits management in MakeITwell.

1 The Business Change Director has proposed that an ‘incremental’ approach be adopted for the implementation of benefits management in MakeITwell.
Is this an appropriate application of Managing Benefits for this scenario?

A No, because a ‘big bang’ approach is most appropriate where the business environment is mature with strong senior management support.
B No, because an ‘opportunistic’ approach is appropriate in circumstances where implementation is unplanned.
C Yes, because an ‘incremental’ approach is appropriate where the business strategy is subject to change and senior management support is mixed.
D Yes, because planned approaches such as ‘incremental’ improve the chances of success.

2 The Portfolio Director is filling the role of SRO for the implementation of Benefits Management in MakeITwell. Is this an appropriate application of Managing Benefits for this scenario?

A No, because benefits management does not need to be managed as a change programme.
B No, because this compromises the Portfolio Director’s delivery responsibilities.
C Yes, because this demonstrates senior management commitment.
D Yes, because this ensures the required changes can be forced through.

3 It has been proposed that gaining the commitment of the Project and Programme Management (PPM) community to benefits management will be enhanced by use of the decision conferencing technique.
Is this an appropriate application of Managing Benefits for this scenario?

A No, because decision conferencing is not relevant to building stakeholder commitment.
B No, because decision conferencing is relevant to engaging senior managers rather than the PPM community.
C Yes, because decision conferencing engages the PPM community in the development of benefits management practices.
D Yes, because decision conferencing involves the PPM community in the composition of the change portfolio.

4 Evaluating the performance impact of benefits management on MakeITwell will be achieved via periodic health-check assessments. Is this an appropriate application of Managing Benefits for this scenario?

A No, because PPM maturity models provide a better assessment of performance impact than healthcheck assessments.
B No, because evaluating performance impact is achieved via measures that evidence the realization of forecast intermediate and end benefits.
C Yes, because health-check assessments encompass measurement of benefits realized.
D Yes, because health-check assessments facilitate comparison of perceptions across a range of stakeholders.

5 The Portfolio Benefits Manager is recommending that a benefits map be prepared as part of the implementation of benefits management. Is this an appropriate application of Managing Benefits for this scenario?

A No, because benefits maps are prepared for individual initiatives rather than for benefits management itself.
B No, because a first step in implementation should be to undertake driver-based analysis.
C Yes, because a key function of the Portfolio Benefits Manager is to facilitate benefits-mapping workshops.
D Yes, because benefits management should be managed as a benefits-led change programme.

Part B

1 A B C D
2 A B C D
3 A B C D
4 A B C D
5 A B C D

Answer 22

Part B

1 C
2 C
3 B
4 B
5 D

1 A Incorrect: A ‘big bang’ approach is most appropriate where the business environment is mature with strong senior management support. However, MakeITwell is operating in a highly dynamic environment and so an ‘incremental’ approach is most appropriate (Section 11.2).
B Incorrect: An ‘opportunistic’ approach is unplanned. This is appropriate where there is little senior management support for benefits management. This is not the case in this scenario so an ‘incremental’ approach is more appropriate (Section 11.2).
C Correct: An ‘incremental’ approach is appropriate where the business strategy is subject to change and senior management support is mixed. This is the situation within MakeITwell, so an ‘incremental’ approach is appropriate (Section 11.2).
D Incorrect: Planned approaches such as ‘incremental’ do improve the chances of success but this does not explain why an ‘incremental’ rather than ‘big bang’ approach is relevant in the circumstances of this scenario (Section 11.2).

2 A Incorrect: Implementation of benefits management is best managed as a business and behavioural change programme (Section 11.3.2).
B Incorrect: There is no conflict between responsibility for delivery and for benefits
realization. Successful implementation is helped by having a senior board-level
sponsor or champion to demonstrate senior management commitment. The
Portfolio Director is ideally placed to fill this role (Section 3.8, 11.3.1).
C Correct: Successful implementation is helped by having a senior board-level sponsor or champion to demonstrate senior management commitment. The Portfolio Director is ideally placed to fill this role (Section 3.8, 11.3.1).
D Incorrect: Successful implementation is helped by having a senior board-level sponsor or champion to demonstrate senior management commitment rather than to enable change to be forced through. Indeed implementation is best managed as a business and behavioural change programme (Section 3.8, 11.3.1).

3 A Incorrect: ‘Decision conferencing’ is relevant to building stakeholder commitment, but in relation to senior managers rather than the PPM community (Section 3.8, 11.3.2).
B Correct: ‘Decision conferencing’ is relevant to building stakeholder commitment in relation to senior managers rather than the PPM community (Section 3.8,
11.3.2).
C Incorrect: The ‘champion-challenger’ model, rather than ‘decision conferencing’, engages the PPM community in the development of benefits management practices (Section 11.3.3).
D Incorrect: ‘Decision conferencing’ engages senior managers, rather than the PPM
community, in deciding on the composition of the change portfolio (Section
11.3.2).

4 A Incorrect: PPM Maturity assessments do provide a repeatable, criteria-based evaluation, but one that focuses on adherence to good practice rather than performance impact (Section 11.3.4.2).
B Correct: Evaluating impact is indeed achieved via measures that evidence the realization of forecast intermediate and end benefits (Section 11.3.4.1).
C Incorrect: Health-check assessments assess perceptions of progress rather than
measuring performance impact (Section 11.3.4.2).
D Incorrect: Health-check assessments do indeed facilitate comparison of perceptions across a range of stakeholders. However, this does not assess performance impact which should be done via a suite of measures evidencing realization of intended intermediate and end benefits (Section 11.3.4).

5 A Incorrect: Benefits maps are prepared for individual initiatives. But the implementation of benefits management should be managed as a benefits-led change programme. Part of this involves being clear about the intended benefits which is helped by completion of a benefits map (Section 11.3.2).
B Incorrect: A first step in implementation should be to undertake driver-based analysis. However, this does not explain why preparing a benefits map is not appropriate to the implementation of benefits management (Section 11.3.2).
C Incorrect: A key function of the Portfolio Benefits Manager is to facilitate benefits-mapping workshops. However, this does not explain why a benefits map is appropriate to the implementation of benefits management (Section 11.3.2, Appendix C.1).
D Correct: Benefits management should be managed as a benefits-led change
programme and part of this involves being clear about the intended benefits.
This is aided by completing a benefits map (Section 11.3.2).