Strategic Alignment, Business Cases and Project Selection

Introduction

Project management begins before a project schedule is created. The most consequential decision is often whether a proposed project should exist at all. Organisations operate with limited capital, specialist talent, managerial attention, technology capacity and tolerance for risk. Selecting projects therefore requires more than ranking attractive ideas. It requires a disciplined connection between organisational strategy, stakeholder value, feasibility, uncertainty and the organisation’s total portfolio of investments.

A project may be technically feasible yet strategically irrelevant. It may have a positive financial return but create unacceptable regulatory or operational risk. Conversely, a project with modest direct cash benefits may be essential because it protects a licence to operate, strengthens resilience or enables several future initiatives. Strategic project selection is consequently a multi-criteria decision problem rather than a purely financial exercise.

This chapter explains how to translate strategy into project-selection criteria, develop credible business cases, evaluate financial and non-financial value, assess risk and feasibility, use scoring models, balance portfolios and define benefits-realisation measures. The emphasis is on managerial judgement supported by transparent evidence.

Learning Objectives

By the end of this chapter, the reader should be able to:

1. Explain strategic alignment and distinguish it from strategic rhetoric.
2. Structure a defensible project business case.
3. Evaluate projects using payback, net present value, benefit–cost ratio and related measures.
4. Incorporate risk, feasibility, benefits and interdependencies into selection decisions.
5. Construct and critique weighted scoring models.
6. Balance a portfolio across value, risk, time horizon, capability and strategic themes.
7. Define measurable benefits, owners, baselines, targets and benefits-realisation criteria.
8. Recognise ethical, governance and implementation limitations in project selection.

1. From Organisational Strategy to Project Choice

Strategy describes how an organisation intends to create and sustain value. Projects are temporary vehicles for changing products, processes, assets, technologies, capabilities or relationships. Strategic alignment exists when a project’s outputs and outcomes make a demonstrable contribution to one or more strategic objectives, without creating unacceptable conflict with other objectives.

A useful chain of logic is:

Strategic intent → strategic objectives → capabilities or changes required → project outputs → business outcomes → measurable benefits.

For example, a retailer’s strategic intent may be to provide reliable same-day fulfilment. The objective may be to increase urban delivery reliability. Required capabilities may include regional inventory visibility and route optimisation. A project may deliver an integrated planning platform. The outcome is better dispatch coordination, while benefits may include fewer late deliveries, lower expediting costs and improved customer retention.

Alignment should be tested through evidence. Statements such as “this project supports innovation” are insufficient unless innovation is an approved strategic objective and the project’s contribution can be traced to a measurable outcome. A project charter or business case should therefore identify:

• the strategic objective supported;
• the mechanism by which the project contributes;
• the measures affected;
• the timing of contribution;
• competing strategic priorities or trade-offs; and
• the consequences of not undertaking the project.

Strategic fit and strategic coherence

Strategic fit asks whether a proposal contributes to current priorities. Strategic coherence asks whether the entire set of proposed projects tells a consistent story. An organisation that claims to prioritise operational resilience but funds only short-term cost-reduction projects has a coherence problem. Portfolio-level coherence is especially important because individual projects can appear rational while collectively exceeding the organisation’s capacity or creating contradictory changes.

Projects are often classified into strategic categories such as growth, regulatory compliance, efficiency, customer experience, resilience, sustainability and capability building. These categories should not become labels used to justify predetermined decisions. Each category requires explicit criteria and, where relevant, a minimum investment envelope.

2. The Business Case as a Decision Instrument

A business case is an evidence-based argument for authorising, rejecting, deferring or reshaping a project. It is not a sales document and should present material disadvantages as clearly as advantages. A high-quality business case supports a decision at a defined point in time; it does not pretend that uncertain forecasts are facts.

Core components

A professionally structured business case normally contains:

The “do nothing” or “do minimum” option is essential. It establishes the counterfactual against which incremental costs and benefits are assessed. If the organisation would incur costs or lose benefits even without the project, those amounts should not be incorrectly attributed to the project.

Options analysis

A business case should compare genuine options, such as:

• internal development versus external procurement;
• phased implementation versus a full rollout;
• process redesign before automation versus automation of the current process;
• one site or region versus enterprise deployment; and
• immediate investment versus deferral.

The preferred option should not be selected solely because it has the highest estimated return. Option value, reversibility, learning, implementation risk, time to benefit and strategic necessity may justify a more expensive option.

Assumptions and evidence quality

Forecasts should distinguish facts, assumptions and estimates. A demand forecast based on a pilot is different from one based only on executive opinion. Each material assumption should have an owner, evidence source, confidence rating and review date. Sensitivity analysis should identify assumptions to which the recommendation is most exposed.

3. Feasibility and the Triple Constraint Reconsidered

Traditional project thinking often emphasises scope, schedule and cost. At selection stage, feasibility is broader. A proposal may be assessed across the following dimensions:

1. Technical feasibility: Can the required solution be designed, integrated, secured, tested and maintained?
2. Operational feasibility: Can processes, roles and service levels function after implementation?
3. Commercial feasibility: Are suppliers, contracts, intellectual property and market conditions manageable?
4. Financial feasibility: Can the organisation fund the project and absorb recurring costs?
5. Organisational feasibility: Do leadership, culture, skills and change capacity support adoption?
6. Legal and regulatory feasibility: Are obligations concerning privacy, safety, competition, employment or reporting satisfied?
7. Schedule feasibility: Can critical deadlines be met without unacceptable compression or quality loss?
8. Sustainability feasibility: Are environmental and social impacts acceptable over the life cycle?

Feasibility is not binary in early evaluation. It is better represented as a set of uncertainties and conditions. For example, a cloud migration may be feasible provided that data residency is confirmed, legacy interfaces are remediated and specialist skills are contracted.

A useful distinction is between project risk and business-case uncertainty. Project risk concerns events that may affect delivery after authorisation. Business-case uncertainty concerns whether the underlying benefits, costs or strategic assumptions are valid in the first place. The latter should be tested before approval through discovery, prototypes, pilots or staged funding.

4. Financial Appraisal of Projects

Financial appraisal provides discipline, but it should not be mistaken for a complete decision rule. The method selected must reflect cash-flow timing, risk, tax, inflation, financing conventions and the organisation’s purpose.

Net present value

Money received at different times cannot be compared directly without a time-value assumption. For a project with an initial investment and annual net cash flows, net present value is:

where:

• I₀ is the initial cash outflow at time zero;
• CFₜ is the net incremental cash flow in period t;
• r is the discount rate per period; and
• n is the number of periods.

The formula assumes that cash flows are measured consistently, normally in nominal terms if r is a nominal discount rate, or in real terms if r is a real discount rate. The timing convention must be explicit: the standard expression assumes cash flows occur at period ends. A positive NPV means that, under the selected discount rate and assumptions, the project adds financial value relative to the benchmark.

For uneven cash flows, each cash flow is discounted separately. If a terminal value exists, it must be included in the period in which it is received. Sunk costs are excluded, while opportunity costs, incremental working capital and closure or disposal costs are included where relevant.

Worked financial example

An organisation is considering a three-year project. The initial investment is £100,000. Expected incremental cash flows are £45,000 at the end of year 1, £50,000 at the end of year 2 and £40,000 at the end of year 3. The discount rate is 10% per year.

The present values are approximately £40,909, £41,322 and £30,053. Therefore:

The project has an estimated positive NPV of approximately £12,284. This conclusion depends on the cash-flow estimates, discount rate, tax treatment and absence of material unmodelled costs.

Payback period

The payback period is the time required for cumulative undiscounted cash flows to recover the initial investment. In the example, cumulative cash flow is £45,000 after year 1 and £95,000 after year 2. The remaining £5,000 is recovered during year 3. Assuming cash flow arrives evenly during year 3:

Payback is simple and useful for liquidity or exposure analysis, but it ignores cash flows after payback and normally ignores the time value of money. Discounted payback corrects the latter but still ignores benefits after recovery.

Benefit–cost ratio and return measures

A benefit–cost ratio can be expressed as:

A ratio above 1 indicates that discounted benefits exceed discounted costs under the defined boundary. Benefits and costs must be defined consistently, and transfers between organisational units should not be counted as net benefits at enterprise level.

Return on investment is widely used but has no single universal definition. A simple form is:

This measure is meaningful only when the numerator, denominator, period, treatment of depreciation and treatment of risk are stated. NPV is generally preferable for comparing projects with different timing because it measures absolute value in currency units.

Non-financial value

Some benefits are difficult or inappropriate to monetise, including safety, regulatory compliance, employee wellbeing, resilience, reputation and environmental protection. They should not automatically be assigned zero value. Instead, the business case should distinguish:

• monetised benefits;
• quantified but non-monetised benefits;
• qualitative benefits;
• mandatory outcomes; and
• avoided losses or risk reductions.

A compliance project may have a negative conventional NPV yet be mandatory. Its selection logic is not “high return” but legal necessity and risk reduction. The business case should still quantify implementation cost, residual risk and operational implications.

5. Risk, Uncertainty and Scenario Analysis

Risk is an uncertain event or condition that may affect objectives. In a business case, uncertainty also includes variability in assumptions even when no discrete event is identified.

A basic expected monetary value calculation is:

where pᵢ is the probability of outcome i, Iᵢ is its financial impact, and the impacts are measured relative to the relevant baseline. The method assumes that probabilities and impacts are meaningful and that the decision-maker accepts an expected-value representation. It should not be used mechanically where outcomes are catastrophic, probabilities are unreliable or risk preferences are strongly asymmetric.

For example, a project has a 20% probability of a £30,000 delay cost and a 10% probability of a £50,000 integration cost. If the events are treated as mutually exclusive for this simplified analysis:

If the events can occur together, a joint outcome must be considered; simply adding expected values may still be acceptable for expected total cost under linearity, but dependencies should be examined.

Useful analytical approaches include:

• Sensitivity analysis: changes one assumption at a time to identify influential variables.
• Scenario analysis: evaluates coherent combinations such as optimistic, base and adverse conditions.
• Decision trees: represent sequential decisions and uncertain outcomes.
• Monte Carlo simulation: repeatedly samples probability distributions to estimate a distribution of outcomes rather than a single forecast.
• Real-options reasoning: recognises the value of staged investment, deferral, expansion or abandonment under uncertainty.

Risk registers should not be used only after project approval. High-impact uncertainties may justify a discovery phase with explicit exit criteria. A stage gate can require evidence that technical performance, user adoption or supplier capability has reached an acceptable level before further funds are committed.

6. Weighted Scoring Models

A weighted scoring model converts multiple criteria into a transparent comparative assessment. Let project j receive score sᵢⱼ on criterion i, with criterion weight wᵢ. If weights sum to 1 and scores are normalised to a common scale, the weighted score is:

The model assumes that criteria are sufficiently defined, scores are comparable and additive aggregation is acceptable. These assumptions are contestable. A project that fails a mandatory safety or legal criterion should not pass merely because it scores highly elsewhere; mandatory gates should be applied before additive scoring.

Illustrative scoring example

Suppose an investment committee uses four criteria: strategic fit 35%, benefits 30%, feasibility 20% and risk 15%. Scores range from 1 to 5, where 5 is most favourable. Project A scores 5, 4, 3 and 2 respectively.

The score is 3.85 out of 5. It does not mean that the project creates £3.85 of value. It is an ordinal or semi-quantitative decision aid. Scores should be supported by evidence, recorded with their rationale and subjected to sensitivity testing. If modest changes in weights reverse the ranking, the decision is sensitive and should not be presented as mechanically determined.

Common weaknesses include double-counting related criteria, optimistic sponsor scoring, false precision, hidden political preferences and ignoring project size. A large project may score well but consume disproportionate capacity. Scoring should therefore be combined with resource constraints, financial analysis, risk review and portfolio-level evaluation.

7. Portfolio Balancing and Capacity Constraints

Project selection is not simply a queue in which every project above a threshold is approved. The portfolio should reflect the organisation’s risk appetite, strategic themes, time horizons and delivery capacity.

Important balancing dimensions include:

• Value: financial and non-financial contribution.
• Risk: delivery, compliance, cyber, market and reputational exposure.
• Time horizon: immediate improvements versus long-term capability.
• Innovation: incremental improvement versus exploratory work.
• Strategic category: growth, resilience, efficiency, compliance and sustainability.
• Resource profile: scarce skills, technology platforms, sites and leadership attention.
• Interdependency: sequencing, shared outputs and cumulative change impact.

A portfolio may require a minimum proportion of mandatory regulatory work, a target allocation to growth, and a controlled exposure to innovation. These are governance choices, not universal formulas. A mature portfolio process makes trade-offs visible.

Capacity constraints are particularly important. If ten approved projects each require the same scarce data-engineering team, the portfolio is not feasible even if each project is individually attractive. Resource-constrained selection may require integer optimisation or heuristic prioritisation. In practice, decision-makers often use a combination of hard constraints, scenario comparisons and informed judgement.

Portfolio governance should periodically reconsider approved projects. Cancellation or suspension is not necessarily failure; it can be evidence of disciplined capital allocation when assumptions change. Continuing a weak project solely because money has already been spent is an escalation-of-commitment error.

8. Benefits Realisation and Value Measurement

Project outputs are deliverables; benefits are improvements enabled by those outputs. A new planning system is an output. Reduced inventory, higher forecast accuracy or faster decisions are potential benefits. Benefits may be direct or indirect, tangible or intangible, and enabling or end-state.

A benefits-realisation plan should specify:

The baseline must be defined before the project changes the process. Targets should have a date, unit, population and measurement method. Benefits owners are normally business managers, not project managers, because benefits depend on adoption and ongoing operations after delivery.

A benefits map can link deliverables to outcomes and strategic objectives. Benefits should be classified as:

• Cash-releasing: creates a genuine reduction in expenditure or avoidance of planned expenditure.
• Productivity: releases capacity but may not reduce cash cost unless staffing or workload changes.
• Revenue: increases sales, margin or retention, subject to attribution.
• Risk reduction: lowers probability or impact of adverse events.
• Capability: enables future benefits but may not produce immediate measurable value.

Benefits should be tracked after project closure. A project can be delivered on time and still fail if users do not adopt the new process. Conversely, benefits may arise later than planned or through operational improvements beyond the original scope. Governance should record both realised and unrealised benefits and investigate variance without encouraging manipulation of measures.

9. Governance, Ethics and Responsible Selection

Project selection allocates organisational power and resources. Governance must therefore address conflicts of interest, transparency, accountability and fairness. Sponsors should declare material interests, particularly where supplier selection or organisational restructuring is involved. Assumptions and scoring rationales should be auditable.

Ethical concerns include:

• overstating benefits to secure approval;
• concealing safety, privacy or environmental impacts;
• shifting costs to vulnerable stakeholders;
• using biased data in technology projects;
• treating employee resistance as irrational rather than as evidence of design risk; and
• selecting projects that improve one department’s metrics while damaging system-wide performance.

Projects involving artificial intelligence require additional scrutiny of data quality, explainability, security, discrimination, human oversight and accountability. An AI project should not be approved merely because the technology is fashionable. The business case must identify the decision being improved, the measurable baseline, acceptable error rates, affected stakeholders and a process for human review.

Sustainability appraisal should consider life-cycle effects rather than only project construction. A digital service may reduce travel but increase energy consumption and electronic waste. Environmental and social impacts should be included in options analysis where material, even if they are not fully monetised.

10. Contemporary Practice: Staged Investment and Adaptive Portfolios

Volatile markets, geopolitical disruption, cyber threats, climate risk and rapid technological change have made long-range forecasts less reliable. Contemporary organisations increasingly combine annual portfolio planning with rolling reviews. Funding may be released in stages rather than committed irrevocably at the outset.

Adaptive governance does not mean abandoning business cases. It means defining learning objectives, decision points and evidence thresholds. A discovery stage may test desirability, feasibility and viability. A pilot may test operational performance. A scale decision then uses observed data rather than the original forecast alone.

Agile delivery also changes the meaning of a business case. Scope may be progressively elaborated, but strategic outcomes, guardrails, funding limits and benefit measures must remain clear. Agile methods do not justify indefinite work without demonstrated value. Product teams require outcome-based metrics and periodic investment decisions.

11. Illustrative Case: Northstar Distribution’s Warehouse Transformation

Background

Northstar Distribution, a fictional regional wholesaler, operates three warehouses. Order accuracy has declined, labour costs have increased and customers increasingly expect next-day delivery. Management proposes an automated warehouse-management system with handheld scanning, redesigned locations and workforce training.

Problem and options

The current process relies on paper picking lists and local spreadsheets. The business case compares three options:

1. Continue with the current process and introduce limited training.
2. Implement a warehouse-management system in one pilot warehouse, then scale if targets are met.
3. Deploy the system across all warehouses immediately.

The immediate full rollout appears fastest but has the greatest integration and change risk. The pilot requires additional elapsed time but creates learning and limits exposure.

Analysis

The strategic objective is reliable next-day fulfilment. Proposed benefits include reducing picking errors from 4.0% to 1.5%, reducing premium freight and releasing supervisory capacity. The baseline is established from six months of quality and freight records. The operations director is named benefit owner.

The pilot requires an initial investment of £180,000 and is expected to produce incremental cash benefits of £80,000, £90,000 and £70,000 over three years. At a 10% discount rate:

The present values are approximately £72,727, £74,380 and £52,592. Thus:

The pilot’s financial case is positive, but its most important purpose is also to test scanning reliability, adoption, integration effort and actual error reduction. Key risks include poor master data, temporary productivity loss, employee fatigue and supplier delays.

Approach and decision

The governance board approves the pilot subject to stage-gate conditions: master-data cleansing before configuration, worker consultation, privacy review, cyber testing and a six-month benefits review. Scale-up requires an error rate at or below 1.8%, no unresolved critical safety issues, stable system availability and a validated cost estimate for the remaining sites.

Outcome

In this illustrative case, the pilot achieves a 1.7% error rate after stabilisation, although productivity initially falls during training. The board authorises a revised scale-up plan with additional training time and a contingency for integration work. The decision is stronger than an immediate rollout because it converts major uncertainties into observed evidence.

Learning points

The case demonstrates that strategic fit does not eliminate the need for feasibility analysis. A positive NPV does not remove operational risk. A staged option can be superior because it purchases information and limits downside exposure. Finally, benefits require an owner, baseline, target and post-implementation measurement.

12. Best-Practice Decision Process

A robust project-selection process can be implemented as follows:

1. Clarify strategic objectives and portfolio constraints.
2. Define the problem and the counterfactual.
3. Generate realistic options, including a minimum-change option.
4. Screen for legal, safety, ethical and mandatory requirements.
5. Develop benefits maps, baselines and ownership arrangements.
6. Estimate life-cycle costs, cash flows, resources and timing.
7. Assess feasibility, assumptions, dependencies and risks.
8. Apply financial appraisal and a transparent multi-criteria model.
9. Test sensitivity, scenarios and capacity implications.
10. Compare the proposal with the existing portfolio.
11. Select funding stages, decision gates and evidence requirements.
12. Review realised benefits and update the portfolio as conditions change.

The process should be proportionate. A small internal improvement does not require the same evidence as a major capital programme, but proportionality must not become an excuse to omit material risk or stakeholder impact.

Challenges and Limitations

No selection method removes uncertainty. Financial models depend on forecasts; scoring models depend on judgement; strategic alignment can be interpreted politically; and benefits may be affected by external conditions. Quantification can create false confidence, while qualitative judgement can conceal bias.

Other limitations include difficulty attributing outcomes to one project, inconsistent data across proposals, double-counting benefits, changing strategic priorities and resource constraints that emerge after approval. Portfolio committees may also favour visible projects over enabling infrastructure or prevention, producing systematic underinvestment in resilience.

The appropriate response is not to seek a perfect model. It is to make assumptions explicit, use multiple perspectives, apply decision gates, involve affected stakeholders, document uncertainty and learn from post-project evidence.

Chapter Summary

Strategic project selection connects organisational intent to investments that create measurable outcomes. A business case should explain the problem, compare realistic options, identify strategic contribution, estimate benefits and costs, assess feasibility, expose assumptions and define governance. Financial tools such as NPV, payback, benefit–cost ratio and ROI provide useful but incomplete perspectives. Risk analysis, scenario testing and staged funding are essential when forecasts are uncertain.

Weighted scoring models support transparent comparison across strategic fit, benefits, feasibility and risk, but they require clear scales, non-duplicated criteria and mandatory gates. Portfolio management adds the system-level perspective by balancing value, risk, time horizon, strategic themes, capacity and interdependencies. Benefits realisation transforms promised value into accountable measurement through baselines, targets, owners, timing and attribution. Ethical, regulatory, sustainability and technology considerations must be integrated into selection rather than added after approval.

Key Terms

Strategic alignment: The demonstrable connection between a project and approved organisational objectives.

Business case: An evidence-based proposal supporting an investment decision.

Counterfactual: The condition or outcome expected if the project is not undertaken.

Benefits realisation: The process of achieving, measuring and sustaining intended project benefits.

Benefit owner: The accountable business manager responsible for achieving a benefit.

Net present value: The present value of incremental cash inflows and outflows discounted at a specified rate.

Discount rate: The rate used to convert future cash flows into present values.

Payback period: The time required for cumulative cash flows to recover an initial investment.

Benefit–cost ratio: Present value of benefits divided by present value of costs.

Sensitivity analysis: Analysis of how a result changes when one assumption changes.

Scenario analysis: Evaluation of outcomes under coherent alternative sets of assumptions.

Expected monetary value: Probability-weighted average financial impact of uncertain outcomes.

Feasibility: The degree to which a proposal can be implemented and sustained.

Weighted scoring model: A multi-criteria method that aggregates weighted project scores.

Portfolio: The coordinated collection of projects and programmes managed to achieve strategic objectives.

Capacity constraint: A limitation on available resources, skills, funding or organisational attention.

Stage gate: A formal decision point at which continuation depends on evidence and conditions.

Strategic fit: The extent to which a proposal supports a defined strategic priority.

Sunk cost: A past cost that cannot be recovered and should not affect an incremental decision.

Real option: The value of flexibility to defer, expand, abandon or change an investment.

Review Questions

5 Short Answer Questions

1. What is the difference between a project output, an outcome and a benefit?
2. Why should a business case include a do-nothing or do-minimum option?
3. State two limitations of the payback period.
4. What is the role of a benefit owner?
5. Why should mandatory legal or safety criteria be applied as gates rather than merely as weighted scores?

5 Long Answer Questions

1. Explain how strategic intent can be translated into measurable project-selection criteria.
2. Compare NPV, payback period, benefit–cost ratio and ROI as project appraisal methods.
3. Discuss how feasibility analysis should address technical, operational, organisational and regulatory issues.
4. Explain the strengths and weaknesses of weighted scoring models in portfolio decisions.
5. Describe how staged investment can improve decisions under uncertainty.

3 Analytical / Application Questions

1. A project requires £250,000 initially and generates £100,000, £110,000 and £90,000 at the ends of years 1, 2 and 3. Calculate its NPV at 8% and explain which assumptions should be tested before approval.
2. Design a weighted scoring model for selecting among a compliance project, a customer-experience project and an automation project. Justify the criteria, weights, scoring scale and any mandatory gates.
3. Develop a benefits-realisation plan for a digital procurement project, including a baseline, target, measure, owner, timing, risks and method of attribution.

Multiple Choice Questions with Answers

Question 1

Which statement best describes strategic alignment?

A. The project has the lowest estimated cost.

B. The project demonstrably contributes to approved organisational objectives.

C. The project uses the newest available technology.

D. The project has the shortest schedule.

Correct Answer: B. The project demonstrably contributes to approved organisational objectives.

Question 2

Why is the do-nothing option important in a business case?

A. It guarantees project approval is avoided.

B. It provides a counterfactual for comparing incremental costs and benefits.

C. It removes the need for risk analysis.

D. It ensures all benefits are monetised.

Correct Answer: B. It provides a counterfactual for comparing incremental costs and benefits.

Question 3

Using the chapter’s NPV example, what is the approximate NPV of £100,000 invested now for cash flows of £45,000, £50,000 and £40,000 at a 10% discount rate?

A. −£12,284

B. £0

C. £12,284

D. £40,000

Correct Answer: C. £12,284

Question 4

Which limitation is most associated with a conventional payback period?

A. It always requires probability distributions.

B. It ignores cash flows occurring after the payback point.

C. It cannot use annual cash flows.

D. It automatically accounts for inflation.

Correct Answer: B. It ignores cash flows occurring after the payback point.

Question 5

In a weighted scoring model, what condition is normally required for weights?

A. Each weight must be greater than 1.

B. Weights must be negative for high-priority criteria.

C. Weights should sum to 1 when expressed as proportions.

D. All criteria must have identical weights.

Correct Answer: C. Weights should sum to 1 when expressed as proportions.

Question 6

Which item is an outcome rather than an output?

A. A configured warehouse-management system

B. A completed training manual

C. Improved order-picking accuracy

D. A signed supplier contract

Correct Answer: C. Improved order-picking accuracy

Question 7

What is the principal responsibility of a benefits owner?

A. To write every project status report

B. To achieve and sustain the business benefit after delivery

C. To approve all supplier invoices

D. To calculate the discount rate

Correct Answer: B. To achieve and sustain the business benefit after delivery

Question 8

A project has a 20% probability of a £30,000 loss and a 10% probability of a £50,000 loss. Treating the events as specified in the chapter’s simplified example, what is the EMV?

A. £5,000

B. £8,000

C. £11,000

D. £80,000

Correct Answer: C. £11,000

Question 9

Which approach is most appropriate when a project contains major technical uncertainty?

A. Approve the full scope without testing assumptions.

B. Use staged funding with discovery, evidence and decision gates.

C. Exclude technical risk from the business case.

D. Use only the payback period.

Correct Answer: B. Use staged funding with discovery, evidence and decision gates.

Question 10

Why should a legally mandatory project not be rejected solely because its NPV is negative?

A. Mandatory projects have no costs.

B. Legal necessity and risk reduction may be the primary selection rationale.

C. NPV is never useful.

D. Negative NPV proves the project is strategically aligned.

Correct Answer: B. Legal necessity and risk reduction may be the primary selection rationale.