PMP Practice Questions #23
You are the Project Manager for a new product development project. Various stakeholders have expressed their views on what they believe will bring the most business value. Given that business value can vary based on individual perspectives, which of the following statements is the MOST accurate understanding of business value and its variability among stakeholders?
A) Business value is a concept and is measured in terms of Return on Investment and Pay Back Period.
B) Business value is determined solely by the project’s end-users.
C) Business value is derived from various factors like increased market share, customer satisfaction, or operational efficiency.
D) Business value is only realized once the project is completed and it is tracked by Benefit Management Plan.
This question asks what “business value” means in project management and how different people might see it differently. It wants the person answering to think about all the different things that can make a project valuable, not just the simple or obvious ones. The main point is to understand that “business value” can be complicated and mean different things to different people involved in a business project.
Analysis of Options:
Option A: Business value is a concept and is measured in terms of Return on Investment and Pay Back Period. This option confines business value to strictly financial outcomes, namely Return on Investment (ROI) and Pay Back Period. It neglects other non-financial aspects that stakeholders might perceive as valuable. While these financial measures are part of business value, they don’t encompass the entire spectrum, making this option incomplete.
Option B: Business value is determined solely by the project’s end-users. This option posits that only the project’s end-users determine business value. This perspective overlooks the contributions and valuations of other stakeholders. In the realm of project management, various parties (internal and external) can derive value from different aspects of the project, not just the end-users. This option is too restrictive and misses the collective stakeholder influence.
Option C: Business value is derived from various factors like increased market share, customer satisfaction, or operational efficiency. This option understands business value as being derived from a multitude of factors, including but not limited to increased market share, customer satisfaction, and operational efficiency. It acknowledges the variable nature of business value among stakeholders, reflecting that what may be valuable to one stakeholder might not hold the same significance to another. This option, therefore, recognizes the complexity and multifaceted nature of business value, making it a comprehensive choice.
Option D: Business value is only realized once the project is completed and it is tracked by Benefit Management Plan. While it’s true that a Benefit Management Plan is used to track business value, stating that business value is only realized post-project completion is misleading. Many projects, especially those following agile or incremental delivery approaches, realize and deliver value continuously throughout the project lifecycle. This option fails to consider the ongoing delivery of value and the varying project methodologies that facilitate this.
Conclusion: Option C is the most accurate understanding of business value and its variability among stakeholders. It captures the essence that business value is not a monolithic concept focused solely on financial gain, end-user perception, or post-project realization. Instead, it’s a nuanced, multifaceted construct influenced by various factors and stakeholder perspectives. This comprehensive viewpoint ensures that all aspects of value, both tangible and intangible, are considered.
PMP Exam Content Outline Mapping
|Business||Task 2: Evaluate and deliver project benefits and value|
- Benefit Measurement
- Business Value
- Business Case
- Benefit Management Plan