CIPS Exam Report for Learner Community:
Qualification: Advanced diploma in procurement and supply Unit: AD2 Management risk in supply chains
Exam series: November, 2013 Exam Series
INFORMATION FOR CANDIDATES
The Principal Marker’s report is written in order to provide the learner community with feedback relating to the examination. It is designed as a tool for candidates - both those who have sat the examination and those who wish to use as part of their revision for future examinations.
Candidates are advised to refer to the Examination Techniques Guide on the CIPS website as well as this Principal Marker’s report.
The Principal Marker’s report aims to provide the following information:
An indication of how to approach the examination question
An indication of the points the answer should include
An indication of candidate performance for the examination question
Each question has a syllabus reference which highlights the learning objectives of the syllabus unit content that the question is testing. The unit content guides are available to download at the following link: http://www.cips.org/studyqualify/cipsqualifications/syllabuses/
ADDITIONAL SOURCES OF INFORMATION
Question 1) - Learning Outcome 1 (LO 1.1)
Analyse the main risks for GCRS, both internal and external, that should be included in the
feasibility study produced by Innovative Solutions. (25 marks)
Analysis of the question
This was a single mandatory question worth 25 marks which sought to test candidate ability to identify and analyse the different types and nature of risks faced by GCRS - drawing on material from the case study. Candidates were not required to discuss how the identified risks might be addressed. Syllabus ref: 1.1 refers. Analysis of the answer
Candidates were expected to generally classify the analysis into 2 streams - namely: The Internal risks faced by GCRS and also the External risks faced by GCRS from the wider environment
Candidates were also expected to discuss an appropriate model or technique to help identify and analyse either internal or external. Possible examples of INTERNAL RISKS faced by GCRS being: Human / Cultural risks, Group dynamics risk / Risk of Human error and inexperience, Business management risk, Corporate governance / security risk, Technology breakdown / implementation risk, Risk of lack of internal controls, Risk of poor employee relations, Loss of key personnel. Possible examples of EXTERNAL RISKS faced by GCRS being: Public relations / Media risk, Political / Government risk, Social cultural risk, Risk of Technology / Quality failure From external IT system supplier, Legal / Ethical risks.
Whilst the question did not directly require the use of formal models, it was permissible to structure
answers using a recognised model or technique - for example: Internal control systems, Auditing, PESTLE or STEEPLE, SWOT Analysis, PORTER’S 5 Forces Model, SAUNDERS Model of environmental factors.
Exam Question summary
For this mandatory question - candidates were expected to identify and analyse the different types and nature of risks faced by GCRS - drawing on relevant content and material from the case study. Answers were generally classified into 2 streams; namely:
1. Internal risks faced by GCRS - These are the risks associated with the internal environment of GCRS vis-à-vis its high profile services of Courts, Prison, Probation and Police. In other words the immediate micro environment.
Whilst many candidates did structure their answers into ‘internal’ and external’ risks, surprisingly, others did not and as a result lost marks for structure.
Some candidates went on to discuss an appropriate model or technique to help identify and analyse either an internal or external risk and consequently achieved more marks.
Questions 2a) & 2b) - Learning Outcome 2 (LO 2.1)
Q2a)
Outline THREE different contract strategies available to GCRS for this IT project, and discuss the likely allocation of project risks between GCRS and the contractor, for each identified strategy.
Q2b)
Suggest how ‘Innovative Solutions’ could be incentivised within a contractual relationship to achieve successful project outcomes.
(15 marks)
(10 marks)
Analysis of the question
This was a two part mandatory question worth 15 marks and 10 marks respectively (25 marks in total) which sought to test candidate knowledge and understanding of different contract strategies available to GCRS for this IT project, and discuss the likely allocation of project risks between GCRS and the contractor, for each identified strategy. Additionally, to build on this by discussing incentivisation to achieve successful project outcomes. Syllabus ref: 2.1 refers.
Analysis of the answer For part a)
Answers were expected to recognise that GCRS can achieve varying degrees of project risk allocation / risk transference through subtly different contracting strategies such as : full turnkey, partial turnkey,
management contracting, traditional multiple contractors etc. The case study and the likely extent of GCRS’s reliance on the expertise of an organisation such as ‘Innovative Solutions’ - pointed strongly to these contract strategy options. GCRS did not have the necessary skills, expertise or resource capability to undertake such a complex IT project itself and therefore would have to transfer risk by contractual means to get the job done.
The degree of risk allocation will depend on the contract strategy chosen - full risk allocation (turnkey) or something in between.
For part b)
to take a meaningful stake in the success or outcome of the complex IT project -taking on the potential for both upside and downside risk. Key parameters in amongst this being quality, cost, time and post contract support or maintenance services. Additionally, answers will be expected to articulate a good example of an incentivised mechanism.
Exam Question summary For Question 2a)
This was a very clearly structured question enabling marks to be allocated for strong answers, some top scoring. Some candidates tended to focus on specific ‘contractual conditions’ such as liability clauses and IPR, as opposed to ‘contract strategies’. Most did however recognise / capture that GCRS can achieve varying degrees of project risk allocation / risk transference through subtly different contracting strategies such as : full turnkey, partial turnkey, management contracting, traditional multiple contractors etc.
The case study and the likely extent of GCRS’s reliance on the expertise of an organisation such as ‘Innovative Solutions’ - pointed strongly to these contract strategy options.
For Question 2b)
This was also a well structured question, with some good scores achieved. Most answers managed to outline a form of incentivised risk/reward relationship between two contractual parties plus the theory behind both parties sharing risk/reward in some shape or form. Most answers also recognised key parameters such as Quality, Cost, Time and Post Contract Support or Maintenance services.
Question 3) - Learning Outcome 3 (LO 3.4)
There are many potential risks for GCRS throughout this project.
Outline a contingency or continuity planning process and suggest how this could be applied to overcome these risks.
(25 marks)
Analysis of the question
This was a single mandatory question worth 25 marks which sought to test candidate knowledge of
contingency or continuity planning processes and their application in the context of the case study material to overcome risks. Syllabus ref: 3.4 refers
Analysis of the answer
Business risk assessment / Identification of critical risks Identification / Evaluation of impact / Solutions
Continuity / Contingency action plans / activation of plan etc. Testing of Plan / Training those who will need to respond Communications Plan / Stakeholder involvement
Examples of typical risks from the case study and how the contingency planning process may be used to reduce them were also indicated.
Exam Question Summary
There were some very good answers to this question with many candidates demonstrating their knowledge by listing both contingency planning and continuity planning processes, which was not necessarily required. In addition to missing the keyword ‘or’, some candidates missed the other keyword of ‘process’ and did not describe any process at all. As a result, this was possibly the lowest scoring question. Stronger answers captured a contingency planning structures or something equivalent which articulated substantive stages as above.
Questions 4a) & Q4b) - Learning Outcome 1 (LO 4.1 & 4.2)
Q4a)
Discuss FOUR potential risks that could be included in the risk register to be presented to the board of management at GCRS.
Q4b)
Discuss the use of a probability / impact matrix to manage THREE of the risks identified in your answer to Q4a).
(16 marks)
(9 marks)
Analysis of the question
This was a two part question worth 16 marks and 9 marks respectively which sought to test candidate knowledge and understanding of potential risks that could be included a risk register and also the use of a probability/impact matrix to manage those risks. Syllabus refs: 4.1.and 4.2 refer.
Analysis of the answer For part a)
For part b)
Answers were expected to outline a risk assessment grid which plots / maps threats and hazards according to their likelihood of happening and also the seriousness of their effect if they do happen. In terms of
application: any of the risks identified were capable of being mapped onto such a grid.
Exam Question Summary For Question 4a)
This was a straightforward question, which many candidates answered well. Some top scoring answers seen here by identifying and discussing 4 relevant potential risks from the case study material (as viewed from the perspective of GCRS’s Procurement Director looking at potential risk and vulnerability to the 4 government agencies of transitioning to a new system in such a tight aggressive timeframe.
For Question 4b)
Most answers gave an outline of a risk assessment grid which plotted / mapped threats and hazards according to their likelihood of happening and also the seriousness of their effect if they did happen. Some good
