Chapter 1.3

Question 1

Name 2 considerations when preparing a business case

Answer 1

1. Costs
2. Benefits

Question 2

Name 3 benefits that may be mentioned in a private sector business case

Answer 2

1. Improved profitability
2. improved ROI
3. Shorter lead times

Question 3

Name 2 benefits that may be mentioned in a public sector business case

Answer 3

1. Improved service for tax payers
2. Improved value for money or cost savings

Question 4

When would a recommendation be proceeded in a business case

Answer 4

If the benefits outweigh the costs because it means the project is financially viable

Question 5

Name a method of assessing whether an objective is important

Answer 5

Issues management

Question 6

Issues management

Answer 6

The process of identifying and resolving issues

Question 7

What are the three trends that help you decide if an objective is strategic or not?

Answer 7

1. External trends
2. Internal trends
3. Performance trends

Question 8

Hybrid strategies

Answer 8

Strategies that combine the best parts of two or more strategies

Question 9

Name the 6 types of intervention to consider when brainstorming ways to create a business case

Answer 9

1. Market interventions
2. Technical interventions
3. Cost structure interventions
4. Work process interventions
5. Supplier relationship interventions
6. Supply chain interventions

Question 10

Lean

Answer 10

A management process for reducing waste and thereby creating more value in a set of activities

Question 11

Six Sigma

Answer 11

A quality management approach that focuses on improving processes, products or services through the identification and elimination of defects

Question 12

Value analysis

Answer 12

Process of analysing costs to identify cost reduction and cost control opportunities to ensure that a product or service production costs are as efficiently as possible in order to maximise profit

Question 13

Value engineering

Answer 13

A process used to review and amend new products to reduce costs and increase value to customers

Question 14

Name 5 cost structure interventions

Answer 14

1. Lean
2. Six Sigma
3. TCO
4. Value analysis
5. Value engineering

Question 15

Name 3 examples of technical interventions

Answer 15

1. Rationalising or simplifying specifications
2. Innovative technologies
3. Creating IP rights

Question 16

Name an example of market interventions

Answer 16

Over and above bidding interventions through competitive tendering

Question 17

Define work process interventions

Answer 17

An organisation attempts to create an advantage that delivers a breakthrough in costs or service by looking at external, collaborative processes with suppliers

Question 18

Define supply chain interventions

Answer 18

Designing the right supply chain by either eliminating unnecessary intermediaries or using outsourcing to gain expertise or scale

Question 19

What is the starting point for finding hybrid options

Answer 19

To list the criteria that the strategies need to address, together with any data that measures the success of the current way of doing things in meeting those criteria

Question 20

Cost-benefit analysis

Answer 20

A technique for deciding whether to follow a particular course of action based on its financial impact

Question 21

What’s the value of a cost-benefit analysis

Answer 21

To show the financial consequence of the choice made

Question 22

How is the effect of time built into the cost-benefit analysis?

Answer 22

By calculating a pay back period

Question 23

Pay back period

Answer 23

The time it takes for the benefits of a change to repay its costs

Question 24

Switching costs

Answer 24

The costs incurred by a buyer when changing from one product or supplier to another

Question 25

Can intangible items be included in a cost-benefit analysis?

Answer 25

Yes but a value must be estimated for these

Question 26

Name 3 examples of less obvious costs

Answer 26

1. Impact on health and safety 2. Impact on the organisations reputation 3. Environmental costs

Question 27

Name 1 way organisations can analyse their competitors

Answer 27

Benchmarking

Question 28

Define benchmarking

Answer 28

A strategic analytic process of continuously measuring an organisations products, services and practices against a recognised leader in the studied area

Question 29

Name 4 types of benchmarking

Answer 29

1. Internal/departmental benchmarking 2. Competitive benchmarking 3. Functional benchmarking 4. Generic benchmarking

Question 30

Define internal/departmental benchmarking

Answer 30

Where a business process is compared to a similar process in the same organisation

Question 31

Define competitive benchmarking

Answer 31

Where a product, service or process is benchmarked against that of a direct competitor

Question 32

Define functional benchmarking

Answer 32

Where similar or identical practices are compared with those of an organisation outside of the immediate industry sector

Question 33

Define generic benchmarking

Answer 33

Looks at unrelated business processes or functions in organisations regardless of the industry

Question 34

Name 7 benefits of internal benchmarking

Answer 34

1. The most cost effective form of benchmarking 2. Relatively easy to do 3. Low cost to carry out 4. Relatively fast to do compared with other types of benchmarking 5. Provides good practise before moving to other forms of benchmarking 6. Easy to transfer lessons learned 7. Provides a deeper understanding of your own processes

Question 35

Name 7 challenges of internal benchmarking

Answer 35

1. Can foster mediocrity 2. Provides limited opportunities for growth 3. Gives a lower level of performance improvement 4. Can create an unhealthy atmosphere of competitiveness 5. There may be internal bias 6. May not give best in class comparisons 7. Results are not much of a stretch beyond what is already achieved

Question 36

Name 5 benefits of competitive benchmarking

Answer 36

1. Compares similar processes 2. Gives a better understanding of a competitor 3. Could be the basis for a potential partnership with the competitor 4. A useful basis for planning and setting goals 5. May provide a comparison with an organisation facing similar regulatory issues

Question 37

Name 5 challenges of competitive benchmarking

Answer 37

1. Performance improvement might be low 2. Can be perceived as a threat by either or both parties 3. May be limited if there are intellectual property issues 4. May not give best-in-class comparisons 5. The competition may capitalise on an organisations weaknesses

Question 38

Name 3 benefits of functional benchmarking

Answer 38

1. Provides industry trend information 2. Comparisons are quantitative 3. Improvement rates are generally better

Question 39

Name 4 challenges of functional benchmarking

Answer 39

1. The two organisations may have diverse corporate cultures 2. Organisations need to be very specific in describing processes and specifying the information needed 3. Common functions can be difficult to find 4. Takes more time that internal benchmarking

Question 40

Name 5 benefits of generic benchmarking

Answer 40

1. A non-competitive and so non-threatening process 2. Provides a broader and different perspective on a process 3. Fosters innovation 4. Examines multiple industries 5. Can be used for global comparisons

Question 41

Name 5 challenges of generic benchmarking

Answer 41

1. Can be difficult to identify best-in-class 2. Those industries that are generally known as best-in-class get inundated with requests and so may not be open to working with new organisations 3. Difficult concept for some people to understand 4. Takes a long time to plan 5. Step changes in performance can be risky

Question 42

Name 6 sustainability factors to be included in a business case

Answer 42

1. Use of technology throughout the project, to minimise paper transactions 2. Procurement of raw materials 3. Sustainability practices of suppliers 4. Location of suppliers 5. Logistical operations around the movement of goods 6. End-of-life options for the asset, or materials to be procured

Question 43

Risk assessment

Answer 43

The process for identifying and dealing with any potential hazards that a project could face

Question 44

How should risks be graded in regards to impact?

Answer 44

1. Minor 2. Moderate 3. Major 4. Critical

Question 45

Name 5 examples of stakeholders who may need to be considered

Answer 45

1. Finance departments 2. Senior management or decision makers 3. Teams directly responsible for undertaking activities within the business case 4. IT departments 5. External stakeholders such as suppliers

Question 46

Change management

Answer 46

The process, tools and techniques for dealing with the people aspect of change to achieve the business outcome required

Question 47

Name 11 elements of an implementation plan that may be checked

Answer 47

1. Have roles and responsibilities been allocated and agreed 2. Is there a communication strategy 3. Is there a change management strategy 4. Has the specification been agreed 5. Has the procurement route been agreed 6. Has sufficent time been allowed for writing tender documents 7. Has sufficient time been allowed for managing the tender process 8. Does the plan allow for time to agree the criteria for choosing a supplier 9. Has sufficient time been allowed for any negotiations 10. Has sufficient time been allowed for writing the contract 11. Have all of the major tasks and dependencies been identified in a formal time plan