Introduction

PRINCE2’s advice on how a project should be managed is built around three fundamental building blocks:

• Principles – universal guidance that show the way for all projects.
• Themes – tailored project management techniques that need to be applied consistently throughout.
• Processes – activities to take a project from start to finish.

These fit neatly together. The guiding principles drive the design of processes and the theme’s techniques. The latter are also tailored for a snug fit with the way in which projects are organised and run. Lastly, processes make extensive use of PRINCE2’s toolkit as a venture is guided from its early preparation, through initiation and delivery, and on to closure. Figure 2.1 illustrates the relationship.

Figure 2.1 The fundamental PRINCE2 building blocks

This chapter explains PRINCE2’s guiding principles. It also describes the project lifecycle, and provides an overview of themes and processes.

PRINCE2 principles

Over the years, considerable experience has been accumulated on what contributes to project success and the pitfalls to avoid. The PRINCE2 community has drawn on this knowledge to arrive at important lessons for everyone. Some have been captured in the form of general principles of good management practice. PRINCE2 picks out seven to underpin its whole approach. They are:

• Continued business justification
• Learn from experience
• Defined roles and responsibilities
• Manage by stages
• Manage by exception
• Focus on products
• Tailor to suit the project environment

Continued business justification

Any project should have a sound rationale for its existence. Broadly speaking, this means that its expected benefits outweigh its estimated cost – and there’s a reasonable prospect of a successful outcome. Its business justification also needs to explain why, of the alternatives available, the recommended option is the best one.

Since projects rarely take place in isolation, this assessment includes considering what contribution will be made to the organisation’s overall strategy. This additionally provides an opportunity to identify dependencies or overlaps with other initiatives.

PRINCE2 supplies an approach for developing a Business Case, with plenty of advice on what the analysis should address and how the results could be presented. It also explains how to link benefit forecasts with measures of actual results.

Clearly a project should only be taken forward where there is a credible trade-off between benefit, cost and risk. However, this isn’t a one-off exercise. As work progresses, much more becomes known about the time and resources needed to deliver. Perhaps the forecast benefits will be called into question too. The outside world doesn’t stand still either. For example, the rosy business case for printing thousands of ‘Paris 2012’ t-shirts ahead of time lost some of its gloss once the winning Olympic bid was announced, and champagne corks started popping in London.

In some organisations, once a project has started it’s almost impossible to get it stopped – even when it’s plain to see that the original business justification has been fatally undermined. Often the team gets so wrapped up in wrestling a growing set of problems that it loses sight of the bigger picture. It can also be tough for individuals who’ve made a strong personal commitment to then to have a hand in cancellation.

So for PRINCE2, business justification isn’t just thought about at the beginning. It’s formally revisited at multiple pre-defined points – hence, continued business justification. There’s no issue with the justification evolving during the course of a project; but the benefit, cost and risk equation must always stack up.

Learn from experience

All projects are unique and, therefore, involve entering uncharted territory. The collective knowledge of those involved offers valuable insight into what works well and what’s just waiting to go wrong. So this experience is a major factor in project success.

When it comes to benefiting from experience, PRINCE2 provides the team with a significant head start. Its management framework embeds what’s been learned on countless projects. However, this generic guidance needs to be supplemented with local knowledge. The nature of the work, the sponsoring organisation, and the individuals involved are all relevant when identifying which specific lessons to draw upon.

Tapping into all of the experience available – and particularly that of those not directly involved in the project – requires the team to be proactive. It also pays to remember that it’s not all doom and gloom. Learning from experience isn’t just about identifying past mistakes. It’s equally important to recognise what’s gone well, so that past successes can be repeated.

Extracting maximum benefit from this exercise also requires getting beyond the superficial symptoms of triumphs and disasters. The most useful lessons will be found through uncovering the underlying root causes for what went well and not so well.

Harvesting lessons doesn’t have to be an onerous, bureaucratic exercise. Indeed, a few informal one-to-one discussions with a few key players can yield more useful information than a large set-piece meeting.

Capturing lessons learned starts at the outset of a PRINCE2 project, with them then being sought all the way through to closure. This enables experience to be captured whilst it’s fresh in everyone’s mind, and also provides an immediate opportunity to apply what’s been learned.

Defined roles and responsibilities

For a project to be delivered successfully, those involved need to understand the specific roles they’ll play. A management structure also needs to be established to oversee the work. Achieving this degree of choreography can present a real challenge. Resources are typically drawn together from different parts of an organisation (perhaps even from different organisations); each person bringing with them a variety of expectations and working styles. It’s also usual to employ a mix of full-time and part-time resources. Most wouldn’t choose this as their ideal starting point for building a slick and cohesive project team.

PRINCE2’s response to this challenge is to provide a standard set of roles, and an explanation as to how these should be organised. Its starting point is to divide the project world up into the following three primary stakeholders:

• Business sponsors who set objectives and ensure the investment represents value for money.
• Users who exploit the project’s outputs to gain the intended benefits.
• Suppliers who provide the resources and expertise to build what’s needed (these may be internal or external).

These stakeholders have representation within the project management team to ensure the interests of those commissioning, supplying and using the project outputs are balanced.

The organisational structure mandated by PRINCE2 ensures that it’s clear who’s responsible for managing what. It also supports effective decision making; striking the right balance between freedom to get on with the job and intervention when it’s needed.

Manage by stages

Breaking a sizeable task down into manageable chunks is a well recognised technique for dealing with something that seems daunting. For projects, this approach brings some particular advantages. First, it enables planning to be carried out at an appropriate level of detail; with the current phase of work having a detailed plan, and later steps being described at summary level. This is a sensible approach because effort spent specifying distant work in detail is almost certain to be wasted. Whilst you can reasonably plan exactly what you want to do next Tuesday, you’re unlikely to commit to an hour-by-hour schedule for this time next year.

Second, breaking up a project provides a series of natural checkpoints between each step. These encourage the management team to consider the bigger picture at regular points. In particular, they reinforce the message about ensuring continued business justification.

PRINCE2 implements this principle by requiring a project to be broken down into management stages. The right level of planning is achieved through a combination of a high level Project Plan, together with a detailed Stage Plan for the current work phase.

Stages also provide the basis for formal management controls. These are embedded within PRINCE2’s processes for running stages and for regulating the transition from one to the next.

Manage by exception

In the interests of efficient and effective delivery, the right balance has to be struck between giving individuals enough freedom to be productive, whilst maintaining sufficient controls to ensure the project doesn’t go off the rails. Taking a management perspective; you’d also want your (hopefully) highly capable senior managers to get involved when their expertise or guidance is absolutely required, but not to get tied up in unnecessary detail.

PRINCE2 achieves this balance using the approach of delegating authority through the agreement of tolerances. Put simply, individuals are able to exercise their own judgement provided the work they’re responsible for remains within agreed boundaries.

Tolerances are described in terms of the extent of deviation that’s permissible before upward escalation is required. They’re defined for the following six plan objectives:

To avoid shutting stable doors long after horses have bolted, the controls implemented track forecast performance against agreed tolerances – not just the current position. This provides the opportunity to intervene early, and to oversee corrective action before a problem worsens.

The management team also requires on-going assurance that the mechanisms used to control delegated authority are robust. After all, there’s nothing worse than being constantly re-assured that everything is on track, only to find out you’re accountable for a disaster that’s been brewing undetected.

Focus on products

What would be your top project management tip? How about: a project should be driven by what it needs to produce, and not a preoccupation with what it needs to do? This advice gets to the very heart of project management. It ensures that the required end result is agreed and planned for before everyone rushes off to start work. As the management guru Stephen R. Covey urges, ‘begin with the end in mind’.

One of PRINCE2’s primary strengths is that it’s built around this philosophy. In fact, the manual says that ‘The “product focus” supports almost every aspect of PRINCE2: planning, responsibilities, status reporting, quality, change control, scope, configuration management, product acceptance and risk management.’ That’s quite a list!

In a PRINCE2 project, deliverables are described using Product Descriptions. The scope of what’s included in a Product Description can be customised to suit, but as a minimum you’d expect to find the following:

A set of Product Descriptions is a great tool for ensuring that the expectations of those on the supplier side and those on the receiving end are aligned from the outset. In particular, time invested in jointly crafting quality criteria will give a handsome return. This provides a forum for flushing out misunderstandings and ambiguities, which would otherwise come back to haunt the project after the damage has already been done. It also establishes the baseline for which the project will ultimately be judged: a fit-for-purpose delivery.

Tailor to suit the project environment

One of PRINCE2’s assets is that it’s a generic project management method, and so can be applied to all sorts of ventures. However, this flexibility does carry a small price tag. Thought needs to be given to the situation specifics, and how these should shape tactics for extracting maximum value from the method.

The project management team needs to agree how the use of PRINCE2 will be configured to suit its particular needs. This will be influenced by factors such as the size and scale of the project, the level of risk being taken on, and the collective experience available.

PRINCE2 is very clear that tailoring doesn’t translate into simply cutting out parts of the method that don’t appeal. Instead roles, processes and products are implemented in a pragmatic way. This might include:

• Combining roles; for example, the Project Manager takes on the Project Support role too.
• Running a project with a single delivery stage.
• Combining products used to manage the project, for example, consolidating all of the control logs in one place.
• Reducing the formality of some products; for example, providing reports verbally or via email (whilst ensuring that a record of key actions and decisions is still maintained).
• Using terminology more familiar to the audience in support of, or as a substitution for, PRINCE2 specific terms.

PRINCE2 themes

Building on its principles, PRINCE2 provides a set of project management techniques to apply throughout the life of a project. It calls these ‘themes’, and there are seven of them. Whilst many of the core ideas contained within the themes could be applied to any project, PRINCE2 describes them in a way that’s designed to dovetail with its delivery processes. For example, putting mechanisms in place to ensure a fit-for-purpose delivery is a must-have for any project, but the Quality theme techniques are described from the perspective of PRINCE2’s product focus.

Here’s a list of the themes with a brief description of each one:

• Business Case (Why?). Supporting the principle of continued business justification; the techniques used to demonstrate whether or not the project is worth investing in, and to ensure that this question is kept under review.
• Organisation (Who?). Supporting the principle of defined roles and responsibilities; the project roles that are required, and how these are used to provide a clear division of accountabilities and responsibilities.
• Quality (What?). Starting with the principle of focus on products, the techniques that are used to ensure that the project’s outputs are fit for purpose.
• Plans (How? How much? When?). A set of techniques for planning how a project is going to deliver its products, what resources this will require, and how long it will take.
• Risk (What if?). A set of techniques for anticipating events with the potential to throw a project off course, and for making intelligent decisions about how to deal with these.
• Change (What’s the impact?). A set of techniques for assessing potential changes to the project, and to ensure that these are dealt with appropriately.
• Progress (Where are we now? Where are we going? Should we carry on?). Supporting the principles of continued business justification and manage by exception; a set of techniques for capturing actual and forecast performance against the plan, and to deal with any significant deviations.

To provide some useful context, this book slots discussion of PRINCE2’s themes at appropriate points in the journey through the project lifecycle. Here’s where the detail is provided:

PRINCE2 processes – the big picture

So, to recap, PRINCE2 has some common sense underlying principles, and a set of handy project management techniques. But how does PRINCE2 actually drive a project from A to B? The answer is: through a set of defined processes. These spell out what needs to be done, who should do it, and the end result being strived for.

Before getting into the detail, it’s worth stepping back to take in the big picture. Any project management framework that’s going to earn its keep needs to provide a sensible path – or lifecycle – for getting from start to finish. A reputable lifecycle recognises that there’s a logical and efficient sequence in which work should be undertaken, and that there are some tasks that absolutely must be done before others. Furthermore, built-in quality checks should tell you if you’re really ready to move on.

PRINCE2 lays out the project lifecycle as:

• Pre-project. Gaining formal control and establishing there’s an outline case for venturing further.
• Initiation Stage. Developing delivery plans and a detailed Business Case, and deciding if the investment needed is justified.
• Delivery Stage(s). Executing the project using one or more management stages, and then closing it.

Each phase of the lifecycle is completed using a number of pre-defined processes. These incorporate the formal controls required to govern progress from one step to the next.

Figure 2.2 The PRINCE2 project lifecycle

Source: © Crown Copyright 2009. All rights reserved. Material is reproduced with the permission of the Cabinet Office under delegated authority from the Controller of HMSO.

PRINCE2 processes – the smaller picture

So what are the PRINCE2 processes, and how do they fit within the lifecycle described above? Having seen that there are seven principles and seven themes, it comes as no surprise that PRINCE2 arms you with seven processes. Here they are:

• Starting up a Project. Determining if a project looks viable and worthwhile.
• Directing a Project. Making key decisions and exercising overall control.
• Initiating a Project. Establishing what needs to delivered, what this will take, and whether or not there’s sufficient business justification to proceed further.
• Controlling a Stage. Managing the project day-to-day against the plan.
• Managing Product Delivery. Setting the team to work and verifying the results.
• Managing a Stage Boundary. Reviewing a concluding stage and preparing for the next.
• Closing a Project. Making a final hand-over and ensuring the project is ready to close.

Some processes are specific to a stage, and others are run more than once. The grid in Figure 2.3 below shows which processes get used where.

You’re not left to work out for yourself what each process involves. PRINCE2 specifies the activities required, and recommends actions for each one. As you’d expect from the focus on products, it’s made clear what each activity needs as an input, and which products get created or updated as a result.

This book steps through PRINCE2’s lifecycle, and describes each process as it first comes into play. Here’s where you’ll find the detail:

Directing a Project runs across the lifecycle. So its part in the story is picked up at each step.

Figure 2.3 PRINCE2 processes used over the project lifecycle

Figure 2.4 How PRINCE2 topics are organised by chapter

Summary

PRINCE2 is a flexible, generic method for managing projects. So it’s relevant whether you’re putting up a building, implementing an innovative IT system, or opening a new shop.

It’s based upon a set of fundamental principles, which set the ground rules for how a project should be set up and run. Themes provide project management tools and techniques. They’re tailored to suit the processes that are used to plan, evaluate, control and deliver.

There’s a logical sequence to take a project from its early stages through to formal closure. Emphasis is placed on up-front preparation and always ensuring there’s sufficient business justification for the next investment step. The correct balance is struck between giving individuals the freedom to deliver, and having the right controls in place to intervene when necessary.

A defining feature of PRINCE2 is its product focus. The philosophy that a project should be driven by what it needs to produce shapes nearly every aspect of the approach.

However, a project is nothing without its people; who need to be organised and clear on their roles and responsibilities. This important topic is the subject of the next chapter.

PRINCE2 has seven principles, seven themes and seven processes: