Application of PRINCE2® and the Impact on Project Management

Table of Contents

Executive Summary

List of Figures

List of Abbreviations

1 Introduction

2 Processes
2.1 Starting Up a Project (SU)
2.2 Initiating a Project (IP)
2.3 Directing a Project (DP)
2.4 Managing Stage Boundaries (SB)
2.5 Controlling a Stage (CS)
2.6 Managing Product Delivery (MP)
2.7 Closing a Project (CP)
2.8 Planning (PL)

3 Components
3.1 Business Case
3.2 Organisation
3.3 Plans
3.4 Controls
3.5 Management of Risk
3.6 Quality in a Project Environment
3.7 Configuration Management
3.8 Change Control

4 Techniques
4.1 Product-Based Planning
4.2 Change Control
4.3 Quality Review

5 Conclusions

Bibliography

Executive Summary

The abbreviation PRINCE stands for PRojects IN Controlled Environments and describes a method for effective project management for all types of project. It was developed by the Office of Government Commerce and launched by the name PRINCE2 in 1996. PRINCE2 is now a de facto project management standard and widely used by the UK government as well as in the private sector, both in the UK and internationally.

PRINCE2 is a process oriented approach, which can be adjusted to any type of project due to its flexibility and scalability. The approach and the needed basic knowledge are assigned to three categories: processes, components and techniques.

Processes ensure that start, end and advancement of the project are monitored and controlled. The processes embrace the activities from setting the project off on the right track, through controlling and managing the progress to the completion of the project. Each PRINCE2 project will have to regard these processes differently. The following processes are applied in PRINCE2: Starting Up a Project, Initiating a Project, Directing a Project, Controlling a Stage, Managing Product Delivery, Managing Stage Boundaries, Closing a Project and Planning.

The components are key aspects of project management that are used throughout the processes and include the Business Case, the Organisation, Plans, Controls, Management of Risks, Quality in a Project Environment, Configuration Management and Change Control.

PRINCE2 presents very few techniques and leaves the selection of the preferred one to the user, who chooses according the demands of the specific project. The techniques the user can choose from include Product-Based Planning, the Change Control technique and the Quality Review technique.

List of Figures

Figure 1: The PRINCE2 relationship with projects and business

Figure 2: PRINCE2 processes and components

Figure 3: Starting Up a Project

Figure 4: Initiating a Project

Figure 5: Directing a Project

Figure 6: Managing Stage Boundaries

Figure 7: Controlling a Stage

Figure 8: Managing Product Delivery

Figure 9: Closing a Project

Figure 10: Planning

Figure 11: Plans

Figure 12: Management of Risks

List of Abbreviations

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1 Introduction

PRINCE2 is a project management method for all types of project. The abbreviation PRINCE stands for PRojects IN Controlled Environments and describes a method for effective project management. This technique was first developed in 1989 by the CCTA (Central Computer and Telecommunications Agency), which is now known as the OGC (Office of Government Commerce). The OGC continued to develop this technique and launched PRINCE2 in 1996 following user requirements, who had asked for direction on projects besides the ones concerning informational systems. PRINCE2 is now a de facto standard and widely used by the UK government as well as in the private sector, both in the UK and internationally (OGC 2005a, p. 1). Meanwhile, there are more than 200,000 practitioners worldwide (PRINCE2 Deutschland e.V. 2009).

Within the project management method PRINCE2 a project is defined as: “A management environment that is created for the purpose of delivering one or more business products according to a specific Business Case” (OGC 2005, p. 7). A PRINCE2 project has the following features (OGC 2005a, p. 7):

- A limited and clear life cycle,
- Distinct and quantifiable business products,
- An equivalent set of activities to attain the business products,
- A distinct amount of resources and
- An organisation structure, with clear responsibilities, to manage the project.

Its allocation within business and project environment is displayed in Figure 1.

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Figure 1: The PRINCE2 relationship with projects and business

Source: OGC 2005a, p. 9

PRINCE2 is a process oriented approach, which can be adjusted to any type of project due to its flexibility and scalability (Triest 2008, p. 27).

The following aspects account for the success of a PRINCE2 project (Triest 2008, p. 19):

- The definition of a Business Case as an economic precondition allows fast decisions within the course of the project. The application of the Business Case as a controlling instrument is not reduced to regarding financial profit, but other key figures like enhancing customer satisfaction can be taken as a basis.
- The product oriented project planning helps in visualizing the objective.
- The project documents confine to the most important information and allow for reporting essential information to management.
- Project controlling using a list of open issues, which contains all of the appearing questions and problems makes the course of the project transparent to the involved and allows for a fast appraisal of the current situation.

The approach and the needed basic knowledge are assigned to three categories as displayed in Figure 2 (Triest 2008, p. 30):

- Processes: PRINCE2 provides a set of processes that offer a controlled beginning, controlled progress and a controlled end to any project. The processes define what should happen and when it should be done (Bentley 2005, p. 6). These processes are: Starting Up a Project, Initiating a Project, Directing a Project, Controlling a Stage, Managing Product Delivery, Managing Stage Boundaries, Closing a Project and Planning.
- Components: PRINCE2 has different components to explain its philosophy about a variety of project aspects, why they are needed and how they can be used. This philosophy is realized by the processes (Bentley 2005, p. 6), which are Business Case, Organisation, Plans, Controls, Management of Risks, Quality in a Project Environment, Configuration Management and Change Control.
- Techniques: PRINCE2 provides only very few techniques, whose use is mostly optional (Bentley 2005, p. 6). They include Product-Based Planning, Change Control technique and Quality Review technique.

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Figure 2: PRINCE2 processes and components
Source: OGC 2005a, p. 12

2 Processes

The steps of project management are described within eight processes, embracing the activities from setting the project off on the right track, through controlling and managing the progress to the completion of the project (OGC 2005a, p. 12). Each PRINCE2 project will have to consider these processes differently.

2.1 Starting Up a Project (SU)

This very short process shall create the preconditions for the project start. Starting Up a Project is the initial process within PRINCE2. This process will be divided into more specific sub-processes, which focus appointing an Executive and a Project Manager, designing and appointing a Project Team, preparing a Project Brief, defining a Project Approach and Planning an Initiation Stage as shown in Figure 3.

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Figure 3: Starting Up a Project

Source: OGC 2005a, p. 26

The following objectives shall be reached within this first process (Triest 2008, p. 31):

- Description and assignment of the project team,
- Securing, that the objectives of the project are known,
- Development of a resolution method: Which approach is chosen for the project to achieve the desired outcome?,
- Definition of the customer’s quality expectations and
- Planning of work packages, which have to be sketched as a basis of the agreement between customer and supplier.

The project starts once this process has been carried out and the Project Board has given approval of the project initiation. As shown in Figure 3, this step is labelled Authorising Initiation (DP1). The cause for a project is called the Project Mandate, which is supplied by corporate management and may vary from verbal request to a complete Project Brief (OGC 2005a, p. 26).

According to the size of the project, the process of Starting Up a Project should last only a short time.

2.2 Initiating a Project (IP)

This process prepares Information, which are needed for deciding on a sound justification, if to continue with the project. A solid basis for managing projects is generated and the planning is expedited to the point of authorization of the Project Board.

This process follows the pre-project process Starting Up a Project (SU). As shown in Figure 4, this process is activated by Authorising Initiation (DP1), followed by Authorising a Project (DP2) and triggers the Planning (PL) process to generate the Project Plan and the Managing Stage Boundaries (SB) process to generate the next Stage Plan. Initiation is supposed to be the first stage in any PRINCE2 project (OGC 2005a, p. 48).

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Figure 4: Initiating a Project

Source: OGC 2005a, p. 48

The following objectives shall be reached within this process (OGC 2005a, p. 14):

- Defining how the required product quality will be attained,
- Planning the costs of the project,
- Revising the Business Case and confirmation that an acceptable Business Case exists for the project,
- Ensuring that the investment of time and effort required by the project is acceptable, accounting for the risks of the project,
- Enabling and encouraging the Project Board to take ownership of the project and agree to the commitment of resources for the next stage and
- Providing the baseline for the decision-making process required during the project’s life.

As a management product, the Project Initiation Document is created. Project advancement and success will be measured against this document henceforth (Triest 2008, p. 31). Other documents created in readiness for use during the project are:

- The Quality Log,
- The Issue Log and
- The Lessons Learned Log (OGC 2005a, p. 14).

2.3 Directing a Project (DP)

This process addresses the Project Board. Since this group of people should only be involved within the process of decision making, the management principle “Management by Exception” is applied.

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Figure 5: Directing a Project

Source: OGC 2005a, p. 70

As shown in Figure 5, this process extends the whole life-span of the project and compasses the significant decisions (Triest 2008, p. 30):

- Preparation and authorization of the project plan and the Business Case,
- Clearance of the maintenance of the project,
- Controlling, that the justification for the prolongation of the project exists at defined points of decisions within the project lifecycle,
- Controlling of advancement,
- Apportionment of assignments on demand and
- Securing of a controlled end of the project.

2.4 Managing Stage Boundaries (SB)

The objective of this process is to

- Plan the next phase, the project plan and the Business Case,
- Update risk assessment,
- Report on results and the efficiency of the completed phase and
- Obtain clearance by the Project Board for entering the next stage (Triest 2008, p. 32).

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