PRINCE2 Foundation and Practitioner Essential Pre Reading Project Management Series PRINCE2 is a registered trade mark of AXELOS Limited. The Swirl logo is a trade mark of AXELOS Limited.
Table of Contents Introduction and Overview... 3 Introduction... 3 Overview... 3 The PRINCE2 Principles... 5 Continued Business Justification... 5 Learn from Experience... 5 Defined Roles and Responsibilities... 5 Manage by Stages... 6 Manage by Exception... 6 Focus on Products... 6 Tailor to suit the project environment... 6 The PRINCE2 Themes... 7 Business Case... 8 Organisation... 8 Quality... 9 Plan... 10 Risk... 10 Change... 11 Progress... 12 The PRINCE2 Processes... 14 Starting up a Project (SU)... 15 Initiating a Project (IP)... 15 Controlling a Stage (CS)... 16 Managing Product Delivery (MP)... 17 Managing Stage Boundaries (SB)... 17 Directing a Project (DP)... 17 Closing a Project (CP)... 18 Tailoring PRINCE2 to the Project Environment... 19 Extracts from Managing Successful Projects with PRINCE2 AXELOS Limited are highlighted in Green. Project Management Series 2 DDLS_PRINCE2_PRE READING
Introduction and Overview Introduction and Overview Introduction This purpose of this document is to prepare delegates for their PRINCE2 Foundation and / or Practitioner course. It presents the core ideas and vocabulary of PRINCE2 and enables the reader to undertake their accreditation course with a solid base and the confidence to go forward and be successful with forthcoming examinations. The work involved in passing the examinations should not be underestimated. Familiarity with the contents of this document prior to the course is essential. It is also essential that approximately 3 hours be set aside for personal study time each night during the course, prior to the exam. We look forward to you attending your PRINCE2 course with DDLS. We are sure that you will find it instructive, valuable and enjoyable. Work hard and you will be successful. Overview PRINCE2 is extensively used in more than 150 countries around the world. It is widely regarded as the leading methodology in project management across all types of projects (e.g. marketing, business re engineering, IT, construction, etc.). It has evolved since the mid 1970 s to enable any size of organisation, any type of project and of any size to deliver the required results to time, to budget, to customer expectations. A key challenge for organisations in today s world is to succeed in balancing two parallel, competing imperatives: To maintain current business operations profitability, service quality, customer relationships, brand loyalty, productivity, market confidence etc. What we term business as usual. To transform business operations in order to survive and compete in the future looking forward and deciding how business change can be introduced to best effect for the organisation. What makes projects different from business as usual? A project is a temporary organisation that is created for the purpose of delivering one or more business products according to an agreed Business Case. Project Management Series 3 DDLS_PRINCE2_PRE READING
PRINCE2 recognises six key aspects of project performance that must be managed: Costs Timescales Quality Scope Risk Benefits Manage, monitor, control these aspects then you have a great chance of success! Introduction and Overview How is PRINCE2 organised? There are four integrated elements of PRINCE2: The PRINCE2 Principles These are the good practices that you must show that you are following and show through the project. If you demonstrate the principles are being applied then you have a PRINCE2 project no matter how you are doing it The PRINCE2 Themes The aspects of project management that must be addressed continually and in parallel throughout the project. They explain various project management disciplines and why they are necessary. The PRINCE2 Processes These describe a step wise progress through the project lifecycle from getting started to project closure. Each process provides checklists of recommended activities, products and related responsibilities. Tailoring PRINCE2 to the project environment Projects are of different sizes, with differing requirement, in various languages and cultures. PRINCE2 needs to be tailored to the specific context of the project to make it effective and appropriate. PRINCE2 is not a one size fits all solution; it is a flexible framework that can readily be tailored to any type or size of project. Project Management Series 4 DDLS_PRINCE2_PRE READING
The PRINCE2 Principles The PRINCE2 Principles If a project does not adhere to these principles, it is not being managed using PRINCE2, because the principles are the basis of what defines a PRINCE2 project. The seven PRINCE2 principles 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 COURSE PREPARATION Think about where you have seen each of the following Principles applied well and badly In the class, you will be asked to describe these good and bad examples. Continued Business Justification Is your project viable, achievable, desirable and worthwhile? It is likely that this was the case at the start of the project it may even have been documented but is it still viable, desirable, achievable, desirable and worthwhile? Learn from Experience An organisation and the project teams should learn from previous experience (lessons are sought, recorded and acted upon throughout the life of the project). Defined Roles and Responsibilities A PRINCE2 project has defined and agreed roles and responsibilities within an organisation structure that engages the business, user and supplier stakeholder interests: Business sponsors who endorse the objectives and ensure that the business investment provides value for money Users who, after the project is completed, will use the products to enable them to gain the intended benefits Suppliers who provide the resources and expertise required by the project (these may be internal or external). COURSE PREPARATION: Understand each of the roles in a PRINCE2 project and their responsibilities. Project Management Series 5 DDLS_PRINCE2_PRE READING
The PRINCE2 Principles Manage by Stages A PRINCE2 project is broken down into manageable phases. These Management Stages provide senior management with control points at major intervals throughout the project. At the end of each stage, the project s status should be assessed, the Business Case and plans reviewed to ensure that the project remains viable, and a decision made as to whether to proceed. PRINCE2 requires there to be a minimum of two management stages: one initiation stage and one or more further management stages. Manage by Exception PRINCE2 enables appropriate control by defining distinct responsibilities for directing, managing and delivering the project and clearly defining accountability at each level. Focus on Products In order to achieve the required objectives, benefits and outcomes, a PRINCE2 project focuses on the definition and delivery of products, in particular their pre defined, agreed quality requirements the things that make the products fit for purpose. Tailor to suit the project environment PRINCE2 is a universal project management method that can be applied regardless of project type, organisation, geography or culture. It can be used by any project because the method is designed to be tailored to its specific needs. DON T FORGET THAT YOU MUST DEMONSTRATE THAT YOU ARE FULFILLING EACH OF THE PRINCE2 PRINCIPLES THROUGHOUT YOUR PROJECT! Project Management Series 6 DDLS_PRINCE2_PRE READING
The PRINCE2 Themes The PRINCE2 Themes PRINCE2 describes aspects of project management that must be addressed continually. Any Project Manager who gives thorough attention to these themes will fulfil the role in a professional manner. The PRINCE2 processes address the chronological flow of the project with actions relating to different themes mixed together. The following are summaries of each theme with the questions that they address: Answers Theme Summary Why? Who? Business Case Organisati on The project starts with an idea which is considered to have potential value. This theme addresses how the idea is developed into a viable investment proposition for the organisation and how project management maintains the focus on the organisation s objectives throughout the project. The organisation sponsoring the project needs to allocate the work to managers who will be responsible for it and steer it through to completion. Projects are crossfunctional so the normal line function structures are not suitable. This theme describes the roles and responsibilities in the temporary PRINCE2 project organisation required to manage the project effectively. What? Quality The initial idea will only be understood as a broad outline. This theme explains how the outline is developed so that all participants understand the quality attributes of the products to be delivered and then how project management will ensure that these requirements are subsequently delivered. How? How much? When? Plan PRINCE2 projects proceed on the basis of a series of approved plans. This theme complements the Quality theme by describing the steps required to develop plans and the PRINCE2 techniques that should be applied. In PRINCE2, the plans are matched to the needs of the personnel at the various levels of the organisation. They are the focus for communication and control throughout the project. What if? Risk Projects typically entail more uncertainty than stable operational activity. This theme addresses how project management manages the threats and opportunities in its plans and in the wider project environment. What s the impact? Where are we now? Where are we going? Change Progress This theme describes how project management assesses and acts upon issues which have a potential impact on any of the signed off aspects of the project (its plans and completed products). Issues may be unanticipated general problems, requests for change or instances of quality failure. The theme explains the decision making process for approving plans, the monitoring of actual performance and the escalation process if events do not go according to plan. Ultimately, the Progress theme determines whether and how the project should proceed. Project Management Series 7 DDLS_PRINCE2_PRE READING
The PRINCE2 Themes Business Case The purpose of the Business Case theme is to establish mechanisms to judge whether the project is (and remains) desirable, viable and achievable as a means to support decision making in its (continued) investment. Organisation The Organisation theme defines and establishes the project s structure of accountability and responsibilities (the who ). A project has three key stakeholder groups: Business those who (probably) pay for the project and will benefit from the results User those who utilise the products of the project and, as a result, deliver the benefits for the business Supplier those who will make and deliver the project s products on behalf of the customer. This group may be internal or external to the customer. The project management structure has four levels, three of which represent the project management team and the fourth which sits outside of the project. The four levels of management are: Corporate or programme management Directing Managing Delivering A project management team (PMT) is a temporary structure specifically designed to manage the project to its successful conclusion. PRINCE2 provides for ten roles within the PMT. Each project requires each of the ten roles. However it is possible for the roles to be performed by one of two individuals (the minimum number of people within a project one to make decisions and one to deliver. The Executive can perform all the roles of the Project Board including Project Assurance. The Project Manager can undertake all the other roles. Project Management Series 8 DDLS_PRINCE2_PRE READING
The PRINCE2 Themes Project Board Made up of the Executive, Senior User(s) and Senior Supplier(s). Executive Ultimately accountable for the project. Senior User(s) Represents the interests of all those who will use the project s products (including operations and maintenance). Senior Supplier(s) Represents the interests of those designing, developing, facilitating, procuring and implementing the project s products. Project Assurance The Project Board is responsible, via the Project Assurance roles, for monitoring all aspects of the project s performance and products independently of the Project Manager. There are three aspects to Project Assurance, each one aligned to the relevant Project Board Member: o Business Assurance aligned to the Executive o User Assurance aligned to the Senior User(s) o Supplier Assurance aligned to the Senior Supplier(s) Change Authority Authorise requests for change or off specifications on behalf of the Project Board and within the tolerances set by the Project Board. Project Manager Runs the project on behalf of Project Board within the constraints laid down by them. Team Manager The Team Manager s primary responsibility is to ensure production of those products allocated by the Project Manager. Project Support Project Support is the responsibility of the Project Manager. Quality The purpose of the Quality theme is to define and implement the means by which the project will create and verify products that are fit for purpose. In other words, it is ensuring we make products that fulfil the stated and agreed criteria. Project Management Series 9 DDLS_PRINCE2_PRE READING
The PRINCE2 Themes Plan The purpose of the Plan theme is to facilitate communication and control by defining the means of delivering the products (the where and how, by whom, and estimating the when and how much). When asked to describe a plan, many people think of a bar chart showing timescales. A PRINCE2 plan is more comprehensive. It is a document describing how, when and by whom a specific target or set of targets is to be achieved. These targets will include the project s products, timescales, costs, quality and benefits. There are three levels of plan to reflect the needs of the different levels of management involved in the project, stage and team. Project Plan Stage Plan Team Plans All PRINCE2 plans are built the same way. The philosophy that the products required are identified first and only then are the activities, dependencies and resources required to deliver those products identified. This is known as product based planning. The approach to planning Define and Analyse products Product Based Planning Risk The Risk theme is about the proactive identification, assessment and control of risks, which may affect the delivery of the project s objectives. Risks can be positive (opportunity) as well as negative (threat). The management of risk is undertaken through a five step procedure. How this procedure is to be adopted within a project is documented in the Risk Management Strategy document. Project Management Series 10 DDLS_PRINCE2_PRE READING
The PRINCE2 Themes Identify the context of the project environment is obtained in order to identify and understand individual risk. Assess the significance of this risk (estimate) and the total set of risks faced by the project (evaluate). Plan a response or series of responses must be investigated and selected for each risk. Implement a Risk Owner and Risk Actionee are appointed. When the response has been implemented then its effectiveness and that of the process are reviewed. Communicate throughout the procedure and the project then appropriate stakeholders are kept informed. Change The purpose of the Change theme is to identify, assess and control any potential and approved changes to signed off products (baselines). An Issue is anything happening during the project which, unless resolved, will result in a change to a baselined product, plan or performance target. There are different types of issue that need to be dealt with during a project: Request for change a proposal for a change from a baseline. Off specification something that should be provided by the project, but currently is not provided (or is forecast not to be provided). This might be a missing product or a product not meeting its specification. Problem/concern any other issue that the Project Manager needs to resolve or escalate. Project Management Series 11 DDLS_PRINCE2_PRE READING
The PRINCE2 Themes PRINCE2 has a standard common approach to dealing with requests for change, off specifications and problems/concerns: In order to have effective issue and change control, we need an appropriate configuration management processes to record baselines for the project s products and ensure correct versions are delivered to the customer. The processes must identify, store and protect the project s products from unauthorised change. The configuration management processes must: Plan pre determine how products will be identified, stored and protected Identify specify the products to be included within the scope of configuration management (version control) Control enact the pre planned processes for configuration management Status Accounting the reporting of the status and location of products within the project Verification and audit compare what is reported and recorded against the actual situation of products and their versions Progress The purpose of the Progress theme is to establish mechanisms to monitor and compare actual achievements against those planned in order to provide a forecast for the project objectives, including its continued viability. Progress is the measure of the achievement of the objectives of a plan. It can be monitored at Work Package, stage and project level. Progress controls ensure that for each level of the project management team the next level of management can: Monitor progress Compare level of achievement with plan Review plans and options against future situations Project Management Series 12 DDLS_PRINCE2_PRE READING
The PRINCE2 Themes Detect problems and identify risks Initiate corrective action Authorise further work Exceptions and tolerances Manage by Exception is one of the seven PRINCE2 Principles. An exception is where it can be forecast that there will be a deviation beyond one or more of the agreed tolerance levels (costs, quality, time, scope, risk, benefits). This enables work to be delegated to a lower level of management without that person having to report every deviation from the agreed target. Formal notification is needed only if the agreed tolerances are forecast to be exceeded. Management Stages The project is chunked up into management stages to enable the Project Board to make decisions. A stage is a subset of the project that the Project Manager is managing on behalf of the Project Board. Controls Progress controls ensure that for each level of the project management team the next level of management can: Monitor progress Compare level of achievement with plan Review plans and options against future situations Detect problems and identify risks Initiate corrective action Authorise further work PRINCE2 provides two types of progress control throughout the life of a project: Event driven controls Take place when a specific event occurs. Time driven controls Take place at pre defined periodic intervals. Project Management Series 13 DDLS_PRINCE2_PRE READING
The PRINCE2 Processes The PRINCE2 Processes Any project is a series of steps or stages. No matter what type of project that is being undertaken, there is a common sequence of stages. Pre Project In the beginning, someone has an idea or a need. This may result from new business objectives, responding to competitive pressures, changes in legislation, or a recommendation in a report or an audit. The trigger for the project could be almost anything. The pre project work is relatively short, long enough to work out if the idea is good enough to spend more money, time and effort to do a detailed specification of what we will do, how we will deliver it (and control the development), why and when. The pre project work prevents us investing in poor ideas. Setting the foundations The Project Board allows the Project Manager to proceed if it decides that the idea looks good enough to invest in and that they are happy with the amount of time, money and resources needed to set the foundations. However the Project Board are authorising the Project Manager to undertake the foundation work ONLY and not the full project. Development Stages When the Project Board gives the go ahead to run the first making stage, then the Project Manager: o Commissions specialist teams to make the required products and get them approved o Monitors and reports progress o Handles problems or escalates when necessary o Prepares information for the Project Board to give permission to do the next stage Closure As part of the final development stage, when all the required outputs have been made and approved, the final integrated solution is tested to make sure it is what the customer needs. If that is successful then the products are handed over. In PRINCE2 the stages as outlined above are achieved through the use of two or more Processes. A process is a structured set of activities designed to accomplish a specific objective. There are seven processes in PRINCE2, which provide the set of activities required to direct, manage and deliver a project successfully. Project Management Series 14 DDLS_PRINCE2_PRE READING
The PRINCE2 Processes Starting-up a Project (SU) This is the pre project process that is triggered on the receipt by the Executive of the Project Mandate from Corporate or programme management. The purpose of the Starting up a Project process is to ensure that we have a viable and worthwhile project. This is demonstrated through producing a document (Project Brief) that overviews: The business case (benefits vs. costs over risks) (Outline Business Case) A description of the project and its outputs (Project Product Description) How the products will be developed (Approach) Who is doing what in the management of the project (Project Management Team Structure) In addition, the Project Manager creates: Daily Log note book Lessons Log for anything worth passing on Initiation Stage Plan a plan of work that must be done when setting up the foundations The Project Brief and the Initiation Stage Plan are given to the Project Board for them to decide if they like the idea of this project and if they are happy to invest enough resources to build the foundations (and only the foundations). Initiating a Project (IP) The purpose of the Initiating a Project process is to establish solid foundations for the project, enabling the organisation to understand the work that needs to be done to deliver the project s products before committing to a significant spend. It is essential that the Project Manager defines: How the project is to undertake the key control and management processes. Among the documents presenting this are the Strategies, which detail how to.. for the relevant topic: o Risk Management Strategy o Quality Management Strategy o Configuration Management Strategy o Communication Management Strategy Project Management Series 15 DDLS_PRINCE2_PRE READING
The PRINCE2 Processes plus o The Controls o The Approach o The Project Management Team Structure What the project is to deliver and the value of it to the business: o Project Plan o Business Case These documents are put together to form the Project Initiation Documentation (PID). This is the basis on which the progress is measured and success assessed. In addition, the following are also created during IP: Risk Register the details of all risks Issue Register the details of all formally handled issues Quality Register a diary of all quality assessment events; when they are to take place and the result of that assessment Benefit Review Plan a plan of when and how the benefits and performance indicators are to be measured (during and after the project) Before the Initiation Stage is completed and the Project Board are asked to make any decisions on what happens next, a detailed plan of the next stage (the first delivery stage) is created. This is done utilising the Managing Stage Boundaries (SB) process. The next stage plan, the PID, and the Benefits Review Plan are given to the Project Board to make their decision on whether or not to proceed. Controlling a Stage (CS) The purpose of the Controlling a Stage process is to assign work to be done, monitor such work, deal with issues, report progress to the Project Board, and take corrective actions to ensure that the stage remains within tolerance. The Project Board (using Directing a Project (DP)) decide whether or not to accept the next stage plan and to authorise the Project Manager to get on and deliver the next stage. Having received that authorisation, the Project Manager: Issues Work Packages which authorise the Team Managers to have the stages specialist products to be made (e.g. the I.T. programmes, the marketing material, the fittings for the house etc.). This work is undertaken by the Team Manager utilising Managing Product Delivery (MP). Monitors progress against the stage plan, determines what needs to be done next. As the stage progresses then regular progress reports (Highlight Reports) are written to keep the Project Board appraised on how things are going. Handles problems and requests for change. If they (or their impacts) are within the stage tolerances, the Project Manager can handle them without recourse to the Project Board. However, the Project Manager forecasts that the stage tolerances will be exceeded then it must be escalated to the Project Board for them to decide how to proceed. Project Management Series 16 DDLS_PRINCE2_PRE READING
The PRINCE2 Processes Managing Product Delivery (MP) This is the process used by the Team Manager to get the stage products made through the use of specialists and specialist teams. There are three key activities carried out by the Team Manager: Understand and accept the Work Package from the Project Manager. It may be necessary for the Team Manager to develop a Team Plan for this work. Get the products developed by the specialists, reporting progress to the Project Manager (Checkpoint Report) and having the resultant products checked that they meet the predefined quality criteria. Give the completed and approved products to the Project Manager (or Configuration Manager). It is this differentiation between the Project Manager and the Team Manager that enables any type of project to utilise PRINCE2. PRINCE2 does not specify what methods must be used once Work Packages has been given to the Team Managers and their teams. Managing Stage Boundaries (SB) Before the Project Board can formally authorise the Project Manager to get on with the next stage, they must be provided with the relevant key information. This is undertaken by the Project Manager utilising Managing Stage Boundaries to produce: A review of the success of the current stage (End Stage Report) Details of what is to be produced, how, by whom, when and at what cost (Next Stage Plan) An updated Project Plan utilising the actuals from the previous stage and new dates from the next stage plan Updates to other parts of the PID in light of what has been learnt to date and what is to be undertaken in the next stage A confirmation of continued business justification and acceptability of the risks (updated Business Case and Benefits Review Plan) It is through developing the Next Stage Plan that the things to be developed are specified in detail (Product Description). Managing Stage Boundaries is carried out as the end of the current stage is approaching. However it is not undertaken if this is the final stage; Closing a Project (CP) is the process utilised in that circumstance. Directing a Project (DP) The purpose of the Directing a Project process is to enable the Project Board to be accountable for the project s success by making key decisions and exercising overall control while delegating day today management of the project to the Project Manager. Project Management Series 17 DDLS_PRINCE2_PRE READING
The PRINCE2 Processes DP is where the Project Board makes decisions. With a project that is working to the principles Manage by Stages and Manage by Exception, a Project Board need only meet formally when key decisions need to be made: Does the project look like a good enough idea to allow the Project Manager to undertake building the foundations (Initiation Stage) and develop the PID and project supporting tools? (After SU and before IP) Does the PID indicate that the Project Manager will deliver a viable, achievable, desirable and worthwhile project? (After the Initiation Stage and before deciding of the first development stage can go ahead) Does the stage plan for the first development stage meet with what we want and utilise the amount of resources that we are prepared to commit to the Project Manager? (After the Project Board has decided that the Project is viable and worthwhile as described by the PID, and before the Project Manager can start the first development stage) Does the project still look viable and worthwhile, are we happy with what has been delivered in the previous stage and what is planned for the next stage? (After the Project Manager has delivered the documents prepared towards the end of the current stage (using SB) and before the Project Manager starts the next stage). Does the project still look viable and worthwhile even though we have a major problem, are we happy with what is planned to fix the current stage? (After the Project Manager has delivered the documents prepared towards the end of the current stage (using SB) and before the Project Manager starts the next stage). Are we happy to close the project and release the resources? (After the Project Manager has obtained acceptance that the project has met its criteria for fit for purpose, has reviewed the project s performance, and ensured that post project actions have owners who accept the responsibility.) Closing a Project (CP) A lot of Project Managers look to be assigned to their next project as soon as the products are delivered. However the approval of the products does not constitute success. Closing the Project ensures that the Project Manager maintains focus until: The integrated final product has met its acceptance criteria and this has been signed off Operations/maintenance have accepted responsibility to take the final product under its wing The performance of the project, the team and the processes have been reviewed, evaluated and documented Outstanding issues and risks that will affect the live environment are documented and owners found and their responsibilities agreed The plan to measure and realise the benefits is updated The Project Board are informed and a draft notification given to them so that they can inform the outside world once they have authorised closure Closing a Project is undertaken at the end of the final stage (instead of SB) or when the Project Board has decided that the project should be closed early (e.g. when things have gone badly wrong inside the project or corporate strategies / priorities have changed. Project Management Series 18 DDLS_PRINCE2_PRE READING
Tailoring PRINCE2 to the Project Environment Tailoring PRINCE2 to the Project Environment PRINCE2 can be used whatever the project scale, complexity, geography or culture, or whether it is part of a programme or is being managed as a standalone project. It is a principle that a PRINCE2 project tailors the method to suit such contexts. All the PRINCE2 process activities need to be done. However it may be though that the responsibilities for performing the activities may change. Project Management Series 19 DDLS_PRINCE2_PRE READING