An!Introduction!to!Project! Management!with! PRINCE2®! · An!Introduction!to!Project! Management!with! PRINCE2®!! BUSINESS!CHANGE!ACADEMY!! 2! An!Introduction!to!Project!Management!with!PRINCE2®!

An Introduction to Project Management with PRINCE2®

BUSINESS CHANGE ACADEMY

2 An Introduction to Project Management with PRINCE2®

www.BusinessChangeAcademy.com 2

1 Table of Contents

Copyright and Trademarks ..................................................................................... 3

1. PRINCE2 an Introduction ................................................................................. 4 1.1. PRINCE2 Background .......................................................................................................................... 4 1.2. PRINCE2 Structure and Architecture ........................................................................................... 5 1.3. PRINCE2 consists of Processes, Themes and Techniques ................................................... 5

2. PRINCE2 Project Management Methodology Structure ................................... 7 2.1. PRINCE 2 Principals ............................................................................................................................. 7 2.2. PRINCE2 Processes ............................................................................................................................... 8 2.3. PRINCE2 Components ......................................................................................................................... 8 2.4. PRINCE2 Techniques ........................................................................................................................... 9

3. PRINCE2 Components Overview .................................................................... 10 3.1. Business Case ....................................................................................................................................... 10 3.2. Organisation ......................................................................................................................................... 10 3.3. Plans ......................................................................................................................................................... 11 3.4. Risk Management ............................................................................................................................... 11 3.5. Quality ..................................................................................................................................................... 11 3.6. Change Control .................................................................................................................................... 11 3.7. Progress .................................................................................................................................................. 12 4. An Overview of PRINCE2 Processes ............................................................... 13 4.1. Directing a Project Process ............................................................................................................ 13 4.2. Starting Up a Project ......................................................................................................................... 13 4.3. Initiating a Project .............................................................................................................................. 13 4.4. Managing Stage Boundaries ........................................................................................................... 14 4.5. Controlling a Stage ............................................................................................................................. 14 4.6. Managing Product Delivery ............................................................................................................ 14 4.7. Closing a Project .................................................................................................................................. 15 5. An Introduction to PRINCE2 Techniques ........................................................ 16 5.1. Product Based Planning ................................................................................................................... 16 5.2. Quality Review ..................................................................................................................................... 17 5.3. Change Control .................................................................................................................................... 17

6. The Importance of PRINCE2 ........................................................................... 18 6.1. Best Practice ......................................................................................................................................... 18 6.2. Comprehensive Structure and Architecture ........................................................................... 18 6.3. Generic Independent Methodology ............................................................................................ 19 6.4. Business Justification Driven ......................................................................................................... 19 6.5. Product Driven .................................................................................................................................... 19 7. What PRINCE2 is not! .................................................................................... 20 7.1. Specialized Project Approach ........................................................................................................ 20 7.2. Detailed and Specific Techniques ................................................................................................ 20 7.3. Management Skills ............................................................................................................................. 20 7.4. Human Resource Management .................................................................................................... 20 7.5. Procurement Management and Contract Management ..................................................... 21 7.6. Project Quality ..................................................................................................................................... 21 7.7. Project Scheduling ............................................................................................................................. 21

An Introduction to Project Management with PRINCE2® 3


Copyright and Trademarks PRINCE® is a Registered Trade Mark of the Cabinet Office Business Change Academy © 2012



1. PRINCE2 an Introduction PRINCE2 is one the most popular and mature project management methodologies being used globally. PRINCE2 is generic yet highly tailored project management methodology which can be used on any type of project; be it managing an IT project, managing a multi-‐million dollar complex construction project to running a TV show such as The Apprentice. Many fortune 5000 companies have adopted PRINCE2 as their Project Management Methodology for delivering projects. PRINCE2 was initially started as an initiative by the UK Government to manage their in-‐house IT projects. Now, there are over 300,000 certified professionals worldwide. PRINCE2 has 7 principles which forms the core of any PRINCE2 project. These 7 principals are guidelines that determine whether a project is genuinely managed using PRINCE2. These principals should be present in every project. These 7 principles are as follows:

1. Business justification at every stage of project 2. Learn from experience 3. Defined roles and responsibilities of project resources. The project

management team is also organised 4. Management of projects are done into manageable and controlled stages 5. Management by exception 6. Focus on products 7. Flexibility and able to tailor to suit the project environment

1.1. PRINCE2 Background PRINCE stands for PRoject IN Controlled Environment and was first introduced in 1989, by UK Government’s Central Computer and Telecommunications Agency (CCTA). It was intended to be a standard for managing IT projects. In 1996, PRINCE2 was re-‐launched as a generic best practice approach to manage projects across industries. The re-‐launched and revised version of PRINCE is known as PRINCE2. PRINCE2 is the de facto standard for Project Management in the UK however it has now been adopted globally. Acknowledging its success and effectiveness in managing project, PRINCE2 has also been approved in several other countries like Netherlands, Belgium, Germany, Spain, South Africa, Australia, and including United States.



1.2. PRINCE2 Structure and Architecture PRINCE2 project management methodology is unique as it is Product driven which focuses on the delivery of the products and not on the activities. PRINCE2 is in Public Domain and thus for last 30 years numerous suggestions, feedbacks and lessons learned has shaped PRINCE2 framework into a well structured methodology.

1.3. PRINCE2 consists of Processes, Themes and Techniques

8 Processes: These 8 processes guides project in step-‐by-‐step fashion throughout the project lifecycle. These 8 steps are as follows:

1. Starting Up a Project (SU) 2. Planning (PL) 3. Initiating a Project (IP) 4. Directing a Project (DP) 5. Controlling a Stage (CS) 6. Managing Product Delivery (MPD) 7. Managing Stage Boundaries (MSB) 8. Closing a Project (CP)

7 Themes: Themes are the important aspect of the project that needs to be

continuously addressed throughout the project lifecycle. Themes are also referred to as components. These 7 Themes are as follows:

1. Business Case 2. Organisation 3. Plans 4. Risk Management 5. Quality 6. Change Control 7. Progress

3 Techniques: PRINCE2 defines 3 techniques to support and implement the

processes which are as follows: 1. Product Based Planning -‐ PRINCE2 uses a product driven approach

which means focus on product / output rather that its activities 2. Change Control -‐ how to log, assess impact and escalate issues and

changes 3. Quality Reviews – A structured technique for assessing a product’s

‘fitness for purpose’



What started as an initiative from the UK Government to merely manage their IT projects has now been evolved into a community with over 300,000 PRINCE2 certified professionals. There is no doubt that PRINCE2 is slowly become a force to reckon with in Project Management market space.



2. PRINCE2 Project Management Methodology Structure The PRINCE2 project management framework in last 30 years has been greatly metamorphosed into a mature, structured and systematic methodology. PRINCE2 project management methodology has 4 integral elements, which are as follows:

2.1. PRINCE 2 Principals Principals are best practice that MUST be present in a project which is implemented using PRINCE2 methodology. There are 7 Principals in PRINCE2 methodology which are as follows:

• Business justification: There must be continued business justification at

every stage of PRINCE2 managed project. Bottom line -‐ a project must make sense from a business point of view and also from Return on Investment stand point.

• Learn from experience: PRINCE2 methodology highly encourages team

members to exchange, share and learn from past project experience.

• Defined roles and responsibilities: This principal deal with the fundamental aspect of the team management i.e. every team member should have a clearly defined roles and responsibility. Everyone should be certain as what they are expected to do and they can expect from others.

• Manage projects in manageable and controlled stages: PRINCE2

methodology advices that whole project is broken down into smaller stages called “Management Stages”. This breakdown increases control and visibility of the project. Thus a PRINCE2 project should have an overall plan as well as a detailed plan for every stage.

• Management by exception: PRINCE2 employs the management by

exception approach. This helps stakeholders / board management to only deal with issues that are significant to them rather than non critical issues that can easily be dealt with other team members or project manager.

• Focus on products: PRINCE2 focuses on Product and not on tasks. In

PRINCE2 implementation products are well defined to the core so that everyone is absolutely clear on what is expected out of the product.

• Able to tailor to suit the project environment: PRINCE2 understands that

every project is unique and thus project methodology needs to be tailored to meet individual project requirement.



2.2. PRINCE2 Processes Processes are step-‐by-‐step implementation guidelines on how a project should be implemented across the project lifecycle. PRINCE2 methodology has 8 processes which are as follows:

• Directing a Project Process: This is basically the responsibility of board members. It extends from the start till the end of the project.

• Starting Up a Project: This is the 1st step of PRINCE2 and also referred as pre-‐project process. This deals with management team and building the initiation stage plan.

• Initiating a Project: Planning process deals with the overall planning and project description including project plan.

• Managing Stage Boundaries: This process is mostly a reporting process to make the board management aware of the stage performance. The reporting helps board management make critical decisions regarding the project / stage.

• Controlling a Stage: This is the ownership of Project Manager. This is where most of the stage work is done. It involves monitoring, managing and reporting the stage to ensure that the project is heading as per the plan.

• Managing Product Delivery: This process deals with the creation and delivery of products at various stages of the project.

• Closing a Project: This is the last stage of the project and deals with preparing and reporting for closing of the project.

2.3. PRINCE2 Components Components are critical success factors of a project that needs to be continuously addressed, monitored and measured throughout the project lifecycle. There are 7 components which are as follows:

• Business Case: This is very important to justify the business and return of investment of the project. This should be monitored throughout the project to ensure that the project is viable at every stage.

• Organisation: Organisation is required to ensure that the project management team is in place.

• Plans: Planning, re-‐planning and planning is key. This ensures that the entire project as well as every stage is planned well.

• Risk Management: This is vital to identify potential risks and having a mitigation plan to ensure the project is heading on the right track

• Quality: This ensures how product quality is measured and monitored



• Change Control: This will ensure on how the change requests are taken care off

• Progress: This deals with monitoring and reporting progress of the project against the plan.

2.4. PRINCE2 Techniques Techniques are ways to implement and support 7 processes in PRINCE2 methodology. There are 3 Techniques, which are as follows:

• Product Based Planning: PRINCE2 focus on product / output. Products descriptions are detailed and allow all interested parties to know what is being produced.

• Change Control: This technique deals with the management of changes and the process to deal of these is in place

• Quality Reviews: This describes how the product quality will be established and reviewed



3. PRINCE2 Components Overview Components are critical success factors of a project that needs to be continuously addressed, monitored and measured throughout the project lifecycle. Components addresses various critical aspects of a PRINCE2 project (Business Justification, Quality, Risk, Planning, and Control etc) and how to manage them. Components are activities done before the start of the project and is constantly monitored. Components are also customisable or tailored to suit individual project needs. Say for example, if one is doing a project on launching a satellite. In this case Plan, Risk, and Quality will be very detailed at a granular level as the error of margin is almost zero. Thus Components are flexible to be tailored as per the project needs across various industries. PRINCE2 has 7 components which are as follows:

3.1. Business Case The Business Case component deals with addressing the Business and Financial justification of the project. Before is project is started, its business case / justification needs to be prepared to see what is the business benefits of the project and what is the possible return on the investment. A project MUST be viable to start and the Business Case helps to justify its viability.

Business Cases help to understand following:

• What do we need to do this project?

• What are the benefits of this project?

• How much investment is required?

• What is expected Return on Investment?

3.2. Organisation Organisation Component describes Project Team structure and their roles. PRINCE2 project methodology uses a Customer – Supplier model where one party is the customer and the other party is the supplier. Thus PRINCE2 recommends that project team should have representation from both the parties and their roles & responsibilities should be described clearly.

Organisation helps to understand following:

• Who is the project sponsor?

• How does the Project team look like?

• What are the roles of team members?

• Who represents the interest of customer/users?



3.3. Plans The Plan component deals with the planning of the project. Plans are done at an overall project level as well as every stage of the project. These projects plans are updated at every stage of the project to reflect the progress, cost, time and plan for the next step.

Plans helps to understand following:

• What is the overall plan of the project?

• What are the products are we going to develop and when they will be delivered?

• How much will it cost us?

• What is the quality standard we need to attain?

• What is the resource requirement and what are their roles

3.4. Risk Management The Risk component helps identify, describe, document, monitor and manage risk. There is hardly any project that has no Risk. Being able to indentify risk and plan its mitigation is the key to success.

Plans helps to understand following:

• What are the potential Risks involved?

• What is the impact?

• What could be our risk mitigation plan/strategy?

• How can be Risk effectively identified, documented, and managed?

3.5. Quality The Quality component is useful in ensuring that Quality products are delivered and planned quality standards are being used. Quality helps to understand following:

• How is the quality of delivered product?

• What should be the level of quality?

• How can we check the quality of a given product against required level of quality?

3.6. Change Control



The Change Control component helps in identifying and managing change requests. Well, every project has issues and change requests. One cannot avoid it. It needs to be managed and that is what this component does. It also talks about the methodology and process that should be in place to handle change requests.

Change Control helps to understand following:

• Do we have the process to handle change requests?

• How do we identify, access and document Change Requests?

3.7. Progress Progress component deal with one of the most important aspect of a project i.e. Progress reporting and checking of current progress based on the planned value. This is done continually to ensure that the project is moving as planned and also to ensure that the project is still viable.

Progress helps to understand following:

• What is the current progress of the project to the planned value?

• What can be done to fill the gap?

• IS the project still viable?



4. An Overview of PRINCE2 Processes The PRINCE2 methodology has comprehensive, flexible and matured processes to implement projects of any size and domain, including IT, construction, telecommunication, entertainment, and so on. PRINCE2 processes are a set of integrated activities that are designed to achieve an objective or goal. These activities range from initial project planning and starting up a project to wrapping-‐up and closing the project. PRINCE2 methodology groups various activities into 8 processes which are as follows:

4.1. Directing a Project Process This process deals with making the project management board accountable for key decision making and handing over project control of the project. This is done by the project board and it spreads right from initial planning to the final closure of a project.

PRINCE2 follows Management by Exceptional which means that the project board will manage only those issues which are beyond control or alarming and need immediate attention.

4.2. Starting Up a Project “Do we have a viable project?” “Is this project worth doing and does it make business and financial sense?” These are the basic questions that are being answered in Starting up a project process. Some of the key activities of this stage are as follows:

• Preparing Business Case • Appointing Project Management Team and assigning roles • Detailing out the plan for Initiation Stage

4.3. Initiating a Project This process largely deals with the overall and detailed planning of the project. This is where the business case is evaluated and given a go. Some of the key activities of this stage are as follows:

• Drafting a detailed Project Plan covering project aspects like costs, timescales, risks, quality plan

• Preparing overall strategy for risk, configuration management, quality and communication management



• Planning and setting up Project Controls for board management

4.4. Managing Stage Boundaries Managing Stage Boundaries deals with the project progress reporting to the project board and making key decisions. The Project Manager also needs to review and update important documents like business case, plan, cost, etc and present these to the board.

Some of the key activities of this stage are as follows:

• Plan and report project progress to the board • Review and update project documents like: Business Case, and Project Plan • Prepare next Stage Plan and Request board authorisation

4.5. Controlling a Stage This is the stage where core project management work is done. This is solely responsibility of the Project Manager and it involves day-‐to-‐day project management.


• Assign and authorise jobs to various team leaders • Monitor and manage day-‐to-‐day project issues like: resource plan, issues, and

changes etc • Monitor project progress and key project aspects like: cost, time and

resource and keep them within the tolerance limit • Prepare and discuss progress report to the project board. Raise key issues

with the board and seek decisions

4.6. Managing Product Delivery As the name indicates, Managing Product Delivery or MPD process deals with the creation and delivery of the products. Unlike Controlling a Stage process, MPD is the responsibility of Team Leaders. Project Manager distributes work packages to the Team Leaders. Team Leaders then accepts, execute and deliver the required product and submit it to Project Manager for approval.


• Accept the work package • Plan internally and execute the work package • Deliver the product within the quality standard



4.7. Closing a Project Closing a Project marks the end of the project. This process deals with evaluating the project products and confirming that project has met its objectives. Some of the key activities of this stage are as follows:

• Preparing Project closure documents like: final signoff, product delivery status, handover report etc

• Final project evaluation by comparing planned vs actual



5. An Introduction to PRINCE2 Techniques

PRINCE2 methodology proposes 3 techniques for use during PRINCE2 project implements. These techniques are optional and customizable to suite projects. The 3 techniques address 3 aspects of project management which are Planning, Change control, and Quality.

PRINCE2 consists following three techniques:

1) Product Based Planning 2) Quality Review 3) Change Control

These techniques are described in more detail in the following setions.

5.1. Product Based Planning PRINCE2 strongly focuses on Product Based Planning which means that products (sometimes refered to as outputs or deliverables) are more important than the activities. In other words, PRINCE2 lays more value on what is to be produced than how it is to be produced. There are 3 main steps in Product Based Planning: 1. Project Product Description: This is very important to identify all the products to

be developed and its descriptions should be captured. Details like • Unique name identifier name of products with which the products will be

identified • Product Title is essentially the product name • Product Purpose to establish the very need for the product creation • Product Composition to establish all the sub-‐components that will be the

part of the product

2. Product Breakdown Structure (PBS): Once the product description is established, it’s time to design the work breakdown structure to establish the tree structure of all the products, sub-‐products and to be developed. PBS is a hierarchical tree that explains the relationship in which the products and sub products will be developed and finally the ultimate product. In certain cases sub-‐product breakdown structure is also established

3. Product Flow Diagram: After PBS is established, a product flow diagram is created. Product Flow Diagrams identify the order and sequence of products.



5.2. Quality Review PRINCE2 Quality Review is the technique used to for checking and reviewing whether product fulfils the intended quality expectations. The purpose of Quality Review is to critically examine quality parameters for the product being developed. This also includes Project Assurance which determines whether proper people are performing Quality Reviews. Quality Review is generally done by Review meetings which have representations from Project Board, Project Manager and Team Leaders who are responsible for product development.

5.3. Change Control Change Control is the 3rd PRINCE2 technique which deals with effective and efficient management of project changes / issues. The Project manager is responsible for Change Control. Change has risk associated with it and thus its business case, impact and viability must be accessed well before putting it across to project board for approval. A normal Change Control process would consist of the following:

• Change Request or Change Record: This is an official request from the customer requesting a change

• Change Assessment: Once the change request is received its impact is assess and it is delivered to the delivery team

• Change Plan: After assessment a change plan is established to detail how the change will be handled

• Change Test: After the plan, the developed change is tested and its approval from the customer is taken

• Change Implementation: At this step, change is implemented and reviewed

• Close: After the implementation is complete, signoff is taken from the stakeholders and the change request is closed.



6. The Importance of PRINCE2 PRINCE2 (PRoject IN Controlled Environment) is structured, non-‐propriety and proven project management methodology. PRINCE2 is generic project management methodology which is well suited for any project in any industry. It is truly an independent methodology which can be tailored to fit projects across industries. PRINCE2 was developed in UK and is now the de facto standard for Project Management in UK. Due to PRINCE2 massive success other countries like Netherlands, Belgium, Germany, Spain, South Africa, Australia, and even United States have also been adopting PRINCE2 methodology. For last 30 years PRINCE2 has evolved and transformed into a structured methodology with principles, components, processes and tailoring guide making it a complete package for project implementations. PRINCE2 methodology has been intensely gaining popularity globally. Now let’s look at some of the important reasons to understand PRINCE2 wide adoption:

6.1. Best Practice PRINCE2 methodology has been used for over 30 years. Several thousands of projects have been implemented using PRINCE2 methodology. The best part is that all the lessons learned, feedbacks, suggestions from these many projects has already been incorporated into PRINCE2 methodology making it a truly best practice methodology.

6.2. Comprehensive Structure and Architecture PRINCE2 methodology is built with integrated 4 elements which are:

• Principles: Principles are the core values which must be present in every PRINCE2 projects. There are 7 principles.

• Components: Components are important aspects of project management which needs to be monitored and managed throughout the project. There are 8 components: Business Justification, Project Organisation, Quality, Plans, Risk, Configuration Management, and Progress

• Processes: Processes are the step-‐by-‐step set of activities to help implement a project. There are 8 process from starting up of project to Project closure

• Techniques: Techniques are proven ways / track to implement and support 8 processes. There are 3 techniques



These elements make PRINCE2 comprehensive and foolproof for managing and implementing projects.

6.3. Generic Independent Methodology PRINCE2 methodology can be implemented for any type of project in any industry. This means that PRINCE2 methodology is uniquely independent and has wide coverage. Be it managing a small scale IT project or be it managing a large construction project like building a stadium or be it running a political campaign. PRINCE2 is equally suitable for all kind of projects.

6.4. Business Justification Driven PRINCE2 methodology is business justification centric. According to PRINCE2, a project must be viable and make business and financial sense. Before a project is started a strong Business case needs to be prepared and presented to the management for approval. If the management sees that the project can make a business impact and have good return on investment, only then is the project given the go ahead. PRINCE2 methodology supports continued business justification which means that the project should be viable at every stage of the project. If at any stage the expected rate of return is no longer viable, then that project should be reviewed or stopped.

6.5. Product Driven PRINCE2 methodology focus on Product rather than activities. Products / outcomes are well defined so that stakeholders are clear on what to expect from the product and what would be its quality.

These benefits and advantages has made PRINCE2 gain popularity among other established project management methodologies like PMBOK. It’s not a surprise that there are above 300,000 PRINCE2 certified professional worldwide and this number is increasing every day.



7. What PRINCE2 is not! PRINCE2 is a well structured and defined project management methodology. PRINCE2 methodology is adequately endowed with principles, components, processes and techniques to deliver any kind & type of project. Even with such a structured Methodology, PRINCE2 does not include everything under project management domain and other management aspects of project management. Some of the areas not included in PRINCE2 project management methodology are as follows:

7.1. Specialized Project Approach PRINCE2 is a generic project management methodology and thus it gives generic framework to implement project of any size and type. PRINCE2 however, does not address in detail on how to run specialized or highly domain centric projects for example what is the best practice to run a financial portfolio restructuring project or what is the best practice methods to market insurance products project.

7.2. Detailed and Specific Techniques PRINCE2 does provide 3 techniques to support implementation, which are Product Based Planning, Configuration Management and Quality Reviews. However, these 3 techniques are not enough to handle specific needs. PRINCE2 does not mention highly specific techniques for implementations say earned value analysis, critical path analysis or PERT analysis. PRINCE2 advises project managers to identify and implement detailed techniques from outside.

7.3. Management Skills PRINCE2 also does not address management skills required to run a project like leadership skills, motivational skills, delegation skills, negotiation skills, Inter-‐personal skills and other soft skills. PRINCE2 advises to identify and implement required management skills as per the project requirement.

7.4. Human Resource Management Project Human Resource Management in PRINCE2 has been loosely mentioned. Some of the key aspect of Human Resource Management like: acquisition, performance appraisal and health and safety regulations are not covered in PRINCE2.



7.5. Procurement Management and Contract Management Project Procurement Management and Contract Management are completely missing in the PRINCE2. PRINCE2 does not mention this in its methodology. This is because PRINCE2 views Project Procurement and Contracting as specialized process which should be done separately.

7.6. Project Quality Quality is a major are within PRINCE2 project management methodology. While PRINCE2 does address product quality in detail, but it also misses out some of major techniques like: cost-‐benefit analysis, benchmarking, cause-‐and-‐effect mapping, and cost of quality etc.

7.7. Project Scheduling PRINCE2 does include project scheduling which is done in the project planning stage. However, PRINCE2 does not give details on how to improve scheduling if in an event overall timescale are not acceptable.

These exclusions do not make PRINCE2 any less useful as a project management methodology. It’s just that PRINCE2 has a different approach to project management and assumes these other facets are provisioned from elsewhere. One piece of good news is that PRINCE2 is in public domain and it is non-‐proprietary. This means that PRINCE2 is consistently being reviewed and improvised with suggestions, feedbacks, and lessons learned from thousands of PRINCE2 practitioners globally delivering several thousands of projects.

Documents

An!Introduction!to!Project! Management!with! PRINCE2®! · An!Introduction!to!Project! Management!with! PRINCE2®!! BUSINESS!CHANGE!ACADEMY!! 2! An!Introduction!to!Project!Management!with!PRINCE2®!