Prince2 Principles eBook

8/16/2019 Prince2 Principles eBook

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The principles of PRINCE2The project management framework known asPRINCE2 is based upon a set of principles. Theseprinciples are the bedrock and founda ons uponwhich everything else in the framework is based.

Universal

PRINCE2 is based upon these principles for a verysimple reason. By being principles-based, it meansthat the framework can be applied to any shape,size or type of project. In this way, the principlescan be universally applied, both to a small in-housecompany project based here in London, or equallyto a massive interna onal aid project spanningmany borders commissioned by the United Na ons.

Best prac ces

These principles have also been proven in prac ceover many years to be the most e ec ve ways ofmanaging projects i.e. they are based upon modernbest prac ces in project management. This meansthey can be applied directly on projects and theproject management team does not need to “re-invent the wheel” by crea ng their own projectmanagement method from scratch.

Empowering

The principles are also empowering to the projectmanagement team because they can give themadded con dence and an ability to shape andmanage their projects

So, let’s take a look at each of these principles inturn.

Con nued business jus ca onThe rst principle or PRINCE2 emphasises that theremust always be a viable Business Case driving theproject.

Business Case

The Business Case is updated throughout theproject, as well as being used when star ng up theproject. If the factors underlying the Business Casechange in such a way that the expected bene ts

are no longer likely to be realised, then the projectshould be closed prematurely.

Changes detrimental to the Business Case are o enlinked to the economy; for example, the recent

worldwide recession led to many major buildingprojects being brought to a halt.

This principle also applies if the project iscompulsory (e.g. required to achieve compliancewith new legisla on) - the organiza on will require

jus ca on of the par cular project chosen, asthere may be several op ons available that yielddi erent costs, bene ts and risks.

The Business Case contains the reasons for runningthe project, with the expected bene ts documentedin measureable terms. In PRINCE2, the bene tsexpected from a project are subject to tolerances; ifthey drop below those tolerances, then the BusinessCase is no longer viable.

For example, if a project is mandated for thepurpose of making a pro t, then the mandateshould iden fy the threshold of pro t thatdetermines the viability of the Business Case. If theexpected pro t drops below that threshold, dueto changes in circumstances, the project should bestopped.

According to PRINCE2, project work should bebroken down into stages, for ease of manageability.

The Business Case is updated by the ProjectManager at the end of a stage and the Project Boardwill be presented with this updated documenta onwhen they assess the project at a stage boundary.

At a stage boundary the Board will decide if theBusiness Case remains viable, before authorisingthe plan for the next stage. If the viability of theBusiness Case raises concerns during a stage, aproject issue can be raised to bring the ma er tothe a en on of the Board as soon as possible, andbefore the end of stage assessment.

In the event of a project being closed prematurely,the organiza on must ensure that lessons arelearned about the cause of the failure. In addi on,every a empt should be made to derive maximumbene t from any outputs and outcomes that hadbeen achieved by the project.

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Learn from experienceAs humans, we are inclined to repeat ourmistakes. PRINCE2 addresses this tendency withits requirement for repor ng the lessons whichwe learn from projects. So important is thisrequirement, it is elevated to that of a principlewithin the framework.

Throughout a project the project manager shouldremain alert to poten al lessons to be learned.These lessons can be iden ed in the many reports

generated by the project management team.

A responsibility of the project manager is to iden fy,document and disseminate lessons, via LessonsReports to the Project Board. Members of theBoard distribute the Lessons Reports to appropriatepar es within the organisa on’s various projects.

20:20 Hindsight = Lessons learned

Aside from lessons iden ed during the current

project, PRINCE2 also emphasises the importance oflessons learned from previous projects. In PRINCE2,the very rst ac vity the project manager performsduring the Star ng Up a Project process is to createa Lessons Log, in order to document previous

lessons. Lessons Reports may then be generated atthe end of each stage and are a required output ofthe Closing a Project process.

When assessing whether an organisa on’s approachto project management is compliant with PRINCE2,assurance auditors may require evidence of lessonsactually being ‘learned’, i.e. proof that steps havebeen taken to avoid repea ng previous mistakes.

One poten al source of evidence is an adaptedquality control process if the original strategy wasmodi ed a er being found wan ng. For example,suppose the Quality Management Strategy for aso ware project called for ‘user acceptance tes ng’but some users recruited for the tes ng were foundto lack the necessary experience. In later tes ngprocedures, a more focused category of user couldbe recruited, in response to the lesson learnedabout inappropriate users.

20:20 Foresight = Best prac ces

Recrui ng an individual with experience in asimilar project, or purchasing documenta on froma previous project, can be an e ec ve means of

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avoiding past mistakes. A number of high-pro leproject managers from the Olympic Games inSydney, Australia, were recruited to work on theLondon 2012 Olympic Games project managementteam - they brought with them their own lessonslearned.

De ned roles and responsibili esThe PRINCE2 principle ‘De ned roles andresponsibili es’ emphasizes that each personinvolved in a project should be aware of thepar cular contribu on that he/she is expected tomake to that project.

If everyone understands what is required of them,the chances of delivering a successful projectare greatly improved. Any confusion about whatshould be done, by whom, and when is likely to bedetrimental to the project’s progress.

For example, a lack of clear leadership is a commoncause of project failure. With de ned roles andresponsibili es in place, the risk of project failuredue to inadequate leadership can be reduced.

An organiza on’s Project Management O ce (PMO)should create a repository of Lessons Reports,ensuring that lessons are made available to futureprojects. Learning from experience is crucial toPRINCE2’s ‘best prac ce’ approach to projectmanagement.

Levels of management

The principle requires a management hierarchy -

from the Project Board at the top, to the ProjectManager below, and then down to the TeamManager. The hierarchy ensures that the projectis managed using three clearly de ned levels ofmanagement.

Project Board

On a PRINCE2 project, the Project Board consists ofthree roles: the Execu ve, Senior User, and SeniorSupplier. Only one person ful ls the Execu ve role,

but any number of people may perform the otherroles. If the Board members are unable to agree ona par cular issue, the Execu ve acts as the decisionmaker.

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For small projects, the Project Board may consistof just the Execu ve, who will perform all of theBoard’s du es. If the project is large, the ProjectBoard is likely to be complex, consis ng of a cross-func onal representa on of many elements ofthe par cipa ng organiza ons. In PRINCE2, theProject Board is part of the project team, which alsoincludes the Project Manager, Project Support andTeam Managers.

Stakeholders

Moreover, PRINCE2 iden es three stakeholderinterests: Business, User and Supplier and theProject Board is designed to represent all threeinterests.

Manage by stages

According to this principle each stage of a projectmust be properly planned, monitored, andcontrolled. A PRINCE2 project requires a minimumof two stages - the rst one being called the

The Business interest (some mes referred to asCorporate) sponsors the project, endorses itsobjec ves, and aims to ensure that the businessinvestment provides value for money.

The User interest refers to members of the Businesswho, a er the project is completed, will use theproject’s products to enable the organiza on to gainthe intended bene ts.

Both User and Business interests collec velyrepresent the Customer (with the Execu ve beingresponsible for the Business element).

The Supplier interest represents those who providethe resources and exper se required by the project.They may be internal or external to the customerorganiza on. All three stakeholder interests mustbe represented within the project, in order for it tosucceed.

‘Ini a on’ stage (during which the project isplanned), and then at least one more to cover thedelivery of the project’s specialist products.

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The requirement for an ini a on stage ensures thata project is not started before detailed forecasts ofcosts and mescales have been completed. If theproject skips this stage, there is a risk that it willul mately cost considerably more than originallyan cipated.

At the end of the ini a on stage, the Project Boardassesses the viability of the project by examiningthe Project Ini a on Documenta on (PID). Inaccordance with this principle, a project that is giventhe go ahead will be assessed again by the Boardat regular intervals (known as management controlpoints) during its lifecycle. A er each assessment,the Board may decide that the project shouldcon nue as planned, alter its scope, or prematurelyclose it if it is no longer viable.

Planning horizonIt is a general rule of planning that every plan shouldbe made only to a manageable and foreseeablelevel of detail (called a planning horizon). PRINCE2recommends three levels of plan - the ProjectPlan, Stage Plans and op onal Team Plans; each isappropriate for the par cular level of managementthat uses it.

The Project Board uses an updated version of the

Project Plan as its working document throughout

the project. The Project Manager, who is responsiblefor the day-to-day management of the project, willuse the current Stage Plan. The Team Manager(s)will write Team Plans to an appropriate level ofdetail.

Go/no go

Each management stage in PRINCE2 acts as a “go/nogo” decision point for the Project Board. It’s whereit decides whether the project is s ll viable and if so,can commit to the next stage by approving the planfor the next stage.

If the decision is “go” then e ec vely this givespermission for the Project Manager to spendthe money authorized by the Board for the nextstage and is thus a less risky approach to takinginvestment decisions when compared with one bigdecision taken at the beginning of the project.

If the decision is “no go” then the project isno longer viable, then the project should beprematurely closed.

Stage boundaries therefore enable the ProjectBoard to control the project on a stage-by-stagebasis, whilst delega ng day to day management ofthe stage to the Project Manager.

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Manage by excep onOn a PRINCE2 project, tolerances are established foreach project objec ve. Limits of delegated authorityare also de ned, so that it is clear who should makea decision about correc ve ac on if tolerances areexceeded. The ac vi es associated with direc ng,managing, and delivering the project must beperformed within agreed tolerance levels.

On a PRINCE2 project, regular Highlight Reportskeep the Project Board informed about progress.This leaves the Board members free to carry on withtheir own ac vi es, beyond those required for thedirec ng of the project. Only if a tolerance level isforecast to be exceeded (known as an ‘excep on’ inPRINCE2), does the Board need to address the issuethrough the assessment of an Excep on Report.

Tolerances

The 6 performance targets for which tolerances areset on a PRINCE2 project are: me, cost, quality,scope, bene ts, and risk. Accepted tolerances areagreed for each of these elements at the projectlevel by members of corporate management, whenthe project is mandated. Changes to these project-level tolerances can only be made at corporate leveltoo.

Once an excep on to a project-level toleranceoccurs, the Project Board must escalate the problemto corporate level for a decision to be made.

Stage tolerances are calculated by the ProjectManager when planning each Stage. They are thencon rmed by the Project Board when it approves aStage Plan. Similarly, Work Package tolerances areset by the Project Manager when a Team Plan isauthorised.

If a Team Manager raises an issue, indica ng adevia on from Work Package tolerances, the ProjectManager must assess the issue and take correc veac on, unless the Stage tolerances will be a ected.If the issue will a ect the Stage tolerances, the

Project Manager must create an Excep on Report,and escalate the ma er to the Board.

Bene ts of “managing by excep on”

By working in this way, the Project Board "managesby excep on" i.e. only gets involved when keydecisions need to be taken (when an issue exceedsagreed tolerances) and hence is a very e cient useof senior management me.

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Focus on productsPRINCE2 recognises the importance of deliveringproducts that meet their agreed quality criteria,hence the ‘focus on products’ principle.

When products are successfully delivered, they leadto project bene ts, and so it is extremely importantthat they are planned and executed e ec vely. Ifthe stakeholders’ expecta ons are to be ful lled inaccordance with the business jus ca on, everyoneinvolved with the project must agree on and fullyunderstand the nature of its products. Otherwisethe aim of the project will be open to interpreta on- and considerable confusion is likely to ensue,impeding the project’s progress.

Product-based planning

Whereas some project management methods focuson ac vity planning, planning in PRINCE2 startswith iden fying products. Product-based planningis a crucial aspect of the PRINCE2 approach tomanaging projects; in par cular, it helps the projectteam to reduce the risk of scope creep, as well asmaking issues such as acceptance disputes and userdissa sfac on less likely to occur and poten allyless damaging.

Product Descrip ons

As part of PRINCE2’s product-based approach,Product Descrip ons are developed and agreed, andthese e ec vely describe what is to be deliveredby the project. They help to ensure that everyoneinvolved in the project is aware of each product’spurpose, composi on, quality criteria, etc. Theyalso enable the project team to es mate how muchwork will be involved in bringing each product tofrui on, what resources will be required, whatac vi es must be performed, and so on. The agreedproducts de ne the project’s scope, as well asproviding a founda on for planning and controlac vi es.

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Tailor to suit the projectenvironmentThe nal principle 'Tailor to suit the projectenvironment’ highlights a key advantage of usingPRINCE2 - its adaptability.

The verb to “tailor” refers to the appropriate use ofPRINCE2 so that it matches the needs of a par cularproject. PRINCE2 recognises that all projectsare di erent in terms of their cultural context,geographical loca on, level of complexity and scale.Tailoring to suit the project environment allowsyou to adapt the PRINCE2 methodology to suit theneeds of your project - and s ll comply with thePRINCE2 approach to project management.

For example, one element of PRINCE2 that is

rou nely tailored is the schedule for Project Boardmee ngs. Such mee ngs are not a requirement ofthe PRINCE2 methodology; regular Highlight Reportsare considered su cient. In many organiza ons,however, regular mee ngs are part of the corporateculture. They can be accommodated by PRINCE2,thanks to the tailoring principle.

If your organisa on tailors PRINCE2, you should

document the changes made to the methodand describe these in the Project Ini a onDocumenta on (PID). In this way, the changes canbe audited and provide evidence of compliance withPRINCE2 and corporate standards.

Tailoring whilst remaining compliant

When you are tailoring PRINCE2, you must bearin mind that no part of the method should beignored or removed. Even on a small project, youwill need to address risk, quality and con gura onmanagement. If the method is changed too much,you will be in danger of running a ‘PINO’ (that’s‘PRINCE2 In Name Only’) project.

Organiza ons can address the PINO problemby referring to the PRINCE2 Maturity Model. 1 Organiza ons can use the model to establish theirlevel of compliance with PRINCE2. 2

The goal of the tailoring principle is to adapt thePRINCE2 method to the needs of your projectenvironment, in order to avoid crea ng a ‘template-driven’ project management method in whicheverything is done unques oningly. Rememberthat PRINCE2 focuses on informa on and decisions,rather than just documents and mee ngs.

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Summary

Hopefully you’ve learned something about thePRINCE2 principles a er reading this eBook. Asa PRINCE2 trainer, I o en hear my students referto their employer as being one which managestheir projects according to PRINCE2. A er delving

a li le deeper, it becomes apparent that theseorganiza ons are not managing their projectsaccording to PRINCE2.

There is only one simple test of whether a projectis a PRINCE2 project and it’s nothing to do withhow many documents are wri en by the projectmanagement team. Nor is it to do with whether allof the guidance in the PRINCE2 manual 3 is beingfollowed. The test is simply whether the project is

applying all of the 7 PRINCE2 principles.

In this way, PRINCE2 is not a rigid and ancient textwri en down on tablets of stone which is unable tobe challenged and changed. On the contrary, it’s aworkable set of best prac ces which can be appliedto any project, no ma er what scale, type or level ofcomplexity.

It’s by applying these principles sensibly on yourproject that you will gain the greatest bene t ofthe world’s most popular project managementframework.

About the author

Simon Buehring is the founder and ManagingDirector of Knowledge Train, a PRINCE2Accredited Training Organiza on based in the UK.Simon regularly delivers project management and

PRINCE2 training courses in the UK and overseasand writes a blog about project managementand PRINCE2. For more than 25 years Simon hasworked on or managed so ware projects for awide range of organiza ons both in the UK andinterna onally, including the BBC and HSBC.

1. O ce of Government Commerce (OGC). (2010). PRINCE2 Maturity Model (P2MM) . Available: h p://www.p3m3-o cialsite.com/nmsrunt -ime/saveasdialog.aspx?lID=462&sID=210. Last accessed 2nd July 2013.2. O ce of Government Commerce (OGC). (2010). PRINCE2 Maturity Model (P2MM) Self-Assessment. Available: h p://www.p3m3-o cial -site.com/nmsrun me/saveasdialog.aspx?lID=469&sID=210. Last accessed 2nd July 2013.3. O ce of Government Commerce (OGC) (2009). Managing Successful Projects with PRINCE2. London: Sta onery O ce Books. 342.
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Prince2 Principles eBook