What are the risks of this process?

At the beginning of each year, an organization has an annual meeting to propose and approve projects for the upcoming year.

Managers will typically follow the process of:

a) Presenting ideas of the projects

b) Defining the benefits

c) Producing the estimations

d) Giving the benefit/cost ratios

A set budget is then approved for each project based on the expected returns.

What are the risks of this process? (choose the best answer)
A . New opportunities might be missed during the year.
B. Technical work estimations are not accurate because managers are not the best ones to give development estimations.
C. All of the above.
D. Cost estimations are not accurate because the scope might not be clear.
E. Investment decisions could be poor if claimed benefits are overstated.

View Answer

Answer: C

Explanation:

As projections become larger, complexity increases and its accuracy becomes less. Larger projects have a higher risk of waste and the ability to adapt to changes becomes more difficult and slower because of unknowns.