How the Two Complement Each Other

Project and Program Management PRINCE2 and PMBOK Friend or Foe? How the Two Complement Each Other Date: September 2013 Prepared by: Klaus Nielsen, Founding Partner Global Business Development, Advisor to ITpreneurs

ITpreneurs White Paper ITpreneurs is pleased to share with you a deeper knowledge of various frameworks and domains connecting their usage and application for the betterment of the IT and Project Management profession. Our appreciation goes out to the industry experts who generously share their invaluable knowledge and experience with us. 1

This white paper explains the foundations of two major standards, their benefits, differences, and how they complement each other. How these certifications can help you and your organization obtain the benefits of each of the standards and how to ask the right questions are also addressed. Introduction During the course of our business, we are often asked which international project management standard to deploy their pros and cons, and how they work in conjunction with other standards or frameworks. In this white paper, we will be reflecting on two major international project management standards, PRINCE2 and PMP (the PMBOK Guide). The PRINCE2 2009 edition and the PMBOK Guide 5 are both internationally-recognized project management standards. In this case, international means global recognition, i.e., having a large membership base, being a proven framework, body of knowledge or best practice, and having a large amount of certified professionals around the globe. An international project management standard is a step-by-step process a project management cookbook or set of good practices that can lead to delivering projects successfully. Standards describe how to conduct the planning, delegating, monitoring and controlling all of the aspects of project management in order to manage the constraints, including costs, time scales, quality, scope, risk and benefits. We believe that the two approaches are, in fact, complementary and that they can offer project managers a powerful tool for successful project completion, especially used in combination with each other. 2

What Is PRINCE2? PRINCE2 (an acronym for PRojects IN Controlled Environments) is a processbased approach to project management. It is a nonproprietary method that can be applied to any project regardless of scale, type, organization, geography or culture. The framework is a set of principles, a set of control themes, a process lifecycle and guidance on matching the method to the project s environment. It also provides a process model for directing, managing and delivering a project. What Is PMP? Project Management Professional (PMP) is a knowledge-based approach to project management. It uses the PMI Guide to project management body of knowledge (PMBOK), which contains accepted techniques for project, program and portfolio management. It is created and updated by both volunteer committees and the general public, and is used as reference guide to evaluate or complete a project. The Basic Concept of PRINCE2 and the PMBOK Guide PRINCE2 is based around seven key principles: 1. Continual Business Justification 2. Learn from Experience 3. Defined Roles and Responsibilities 4. Manage by Stage 5. Manage by Exception 6. Focus on Products 7. Tailor to Suit the Project Environment The PMBOK does not apply principles. However, tailoring does exist (as a tool) to adapt the frameworks to the organization, situation and project. In order to manage the project constraints, each framework consists of aspects of project management that must be addressed continually. In PRINCE2, these features are called themes, while the PMBOK Guide uses knowledge areas. The PRINCE2 principles are closely related to the following themes: Business Case, Organization, Quality, Plans, Risk, Change and Progress. Portions of this content can be found in the PMI knowledge areas, which cover themes and processes by examining input, tools and techniques and output. The PRINCE2 themes are mapped with the PMBOK knowledge areas in Table 1 below. Table 1 PRINCE2 Themes Business Case, Change Plans Plans, Progress Progress PMBOK Knowledge Areas Project Integration Management Project Scope Management Project Time Management Project Cost Management Quality Organization Organization Organization Risk Project Quality Management Project Human Resource Management Project Communication Management Project Stakeholders Management Project Risk Management - Project Procurement Management 3

The PRINCE2 and the PMBOK Guide both consist of processes that are the step-by-step good practices to managing projects successfully. PRINCE2 is a best practice document and principledriven framework while the PMBOK framework is a body of knowledge framework, including an extensive toolbox of techniques and processes needed to master any project. The PMBOK Guide includes 47-project management processes, covered under 10 knowledge areas and five process groups. The knowledge area of Project Procurement Management (PPM), which is not covered in PRINCE2, includes the processes of Plan Procurement Management, Conduct Procurements, Control Procurements and Close Procurements. All 47 processes are also part of process groups called: Initiating, Planning, Executing, Monitoring and Controlling, and Closing. The process groups are the project lifecycle, which goes from start of the project (Initiating) to the end (Closing). PRINCE2 has 7 principles, 7 themes, and 7 processes. The PRINCE2 processes include, Starting Up a Project, Directing a project, Initiating a Project, Controlling a Stage, Managing Product Delivery, Managing a Stage Boundary and Closing a Project. Each process consists of a workflow of actions and documents in order to manage the process successfully. PRINCE2, therefore, is a best practice document and principle-driven framework while the PMBOK framework is a body of knowledge framework, including an extensive toolbox of techniques and processes needed to master any project. The Differences Between PRINCE2 and the PMBOK Guide As we have seen, it is possible to compare the international project management standards of PRINCE2 and the PMBOK Guide to each other; and each includes a wide range of benefits. So, let's examine the real differences. From a high level point of view, the PMBOK Guide was first created in 1983 as a body of knowledge by professionals in leading U.S. enterprises, public and academic sectors, as well as by thought leaders. A body of knowledge is a set of standards to successfully deliver projects. PRINCE, later known as PRINCE2, was developed in 1989 as the UK standard, and (later still) fairly popular among the public sector throughout Europe. PRINCE2 is a best practice framework based upon the experience of both failed and successful projects. A high level summary of the differences between PRINCE2 and PMBOK are shown in the Table 2 below. 4

Table 2 PRINCE2 PMBOK With PRINCE2, you need experienced project managers with extensive knowledge of the detailed tools and techniques in order to be successful with your projects, while PMBOK projects need a focus on, why we are doing this project and who is doing what and when? A process-based project management methodology A series of management processes defining what must be done, when and how it must be done and by whom, over the life of a project Prescriptive, but can be tailored Defines the roles of everyone involved in a project Offers a complete change control approach Does not cover procurement management A knowledge-based approach to project management Describes core practices and a wider range of techniques that can be applied to manage a project Non-prescriptive Focuses on the Project Manager's role Talks of the need for it, but says little about configuration management Covers procurement management Table 3 illustrates which framework will benefit from which key aspect of project management. Table 3 Key Aspects of Project Management PRINCE2 PMBOK Defined structure for accountability Yes No Management by exception Yes No Business-case driven Yes No Stakeholder engagement Yes Yes Leadership capabilities No Yes Detailed techniques No Yes One aspect where the frameworks differ is their view on roles. PRINCE2 has a strong emphasis on the executive, senior supplier and senior user in the organization scheme, while there is less emphasis on these in the PMBOK Guide. The experiences in Europe (in the 1980s) told of a case of numerous projects not being closed in time, or completed for the wrong reasons. As a result, this created a strong focus on the business case as the driver for change and delivery of projects in PRINCE2. The differences between the frameworks are plentiful, especially because the PMBOK Guide is strong on detailed techniques in all of the knowledge areas. One being procurement, which plays a larger and larger role in many projects since a vendor has to be found before the project starts. 5

One of the major strengths of the PMBOK Guide is the means to create a schedule, in great detail and of high quality. This quality is just expected of the project manager in PRINCE2, without the necessary tools and techniques provided. The PMBOK Guide also includes Earned Value Management. The guide is a valuable tool to measure progress with, in terms of time and costs, and it enables the project manager to make forecasts based on data, rather than on gut feeling. One last element, not to be forgotten, is PMI s focus on the Code of Ethics and Code of Conduct, increasingly important in today s litigious society. This implies that with PRINCE2, you need experienced project managers with extensive knowledge of the detailed tools and techniques in order to be successful with your projects. While projects that use the PMBOK Guide need to focus on, Why are we doing this project? And, who is doing what, and when? These complementary differences are explored further in the next section. How PRINCE2 and PMBOK Complement Each Other PRINCE2 includes the methods, while the PMBOK Guide includes the techniques. An important feature for each of the frameworks is their ability to be tailored to the organization and the project, enabling the organization s ability to adapt and foster change. The body of knowledge of PMI and the best practices from PRINCE2 are both part of a professional project manager s toolbox. Each project is unique, fosters a change, is cross-functional and temporary, which implies that we must adapt and use different processes, tools and techniques, in different situations. So, an organization may have decided to use one framework over another, which makes good sense. The client may have an overall PRINCE2 framework, using the principles, themes and processes. However, when it comes down to delivering the project, the project manager may use the detailed techniques from the PMBOK Guide in all of the knowledge areas. These include techniques such as the Plan (PDM/ADM/Network diagram/critical path/crashing/fast tracking), Risk Management (Scurve), Estimation Techniques (PERT, Analogy), Quality (TQM Techniques such as Cost of Quality), Human Resource Management (Staffing, team building) and Earned Value Management for status reporting and measurement of progress. Projects may include procurement, where PMI knowledge areas are employed to create PRINCE2 products. Alternatively, the client may be a European firm with American clients, so they use the PMI Standards. However, this does not imply that they cannot have a business-case-driven project. The International Project Management Standards of PRINCE2 and the PMBOK Guide are highly complementary. Simply stated, PRINCE2 includes the methods, while the PMBOK Guide includes the techniques. An important feature of both of the frameworks is their ability to be tailored to the organization and the project, which enables the organization s ability to adapt and foster change. 6

How to Choose a Framework for Managing Projects To start with, an organization would need an International Project Management Standard to increase its rate of delivery of successful projects on a day-to-day basis. The use of a particular framework, in most businesses, is based upon the governance model deployed meaning that top management has decided which framework to use at an overall level. This does not imply that it could not be useful to include other frameworks or knowledge in their toolbox as well. The use of a set framework is often related to experience with, or knowledge of, the framework. Frameworks deploy many templates, which are developed by the organization as part of the deployment of the framework, more or less setting the standard for proper use. Other (and more serious factors) to consider include scalability, accountability, standardization and reliability, and which International Project Management Standards performs well on all parameters. Concluding Remarks International Project Management Standards are like apples and oranges. Some prefer one to the other. Looking at it objectively, both are healthy and/or excellent supplements in most dishes. Both the PMBOK Guide and PRINCE2 are de facto standards and best practices within the industry and the academic world. PRINCE2 is principle-driven, which makes it great for communications and excellent for engaging stakeholders. However, it is also document-driven. The organization needs to find the right level in terms of tailoring, or some of the smaller projects would deviate greatly. It works like a charm on larger projects with little need of tailoring. The PRINCE2 themes and processes cover most aspects of a project, and with some tailoring you can realize successful projects. The PRINCE2 framework is based upon experiences from many projects, good and bad, helping others avoid the same mistakes. The PMBOK Guide has been the de facto standard for many global companies. As executives and managers, we tend to believe that our project managers have the needed tools and techniques to master the projects. Unfortunately, this is not always the case. The PMBOK Guide is an amazing body of knowledge outlining what you need to know to run successful projects. PRINCE2 and PMBOK offer project managers with several advantages to managing projects successfully and some project managers choose a hybrid approach combining the best of both. Whatever the case, both standards offer useful concepts that organizations and managers can adopt to ensure success for their respective projects, as well as for their careers. 7

References 1. Murray, Andy. (2011). PRINCE2 in one thousand words. http://www.best-managementpractice.com/gempdf/prince2_in_one_thousand_words.pdf 2. www.pmi.org About the Author Klaus Nielsen is an advisor to ITpreneurs and the Founding Partner of Global Business Development in Denmark and an Associated Lecturer in Project and Program Management at the IT University of Copenhagen. Klaus holds the PRINCE2 Foundation and Practitioner, CSM, PMP, PMI-RMP and PMI-ACP credentials and holds a Master s degree of Business Administration. As a professional freelance consultant, Klaus has over 10 years of project and program management experience. In late 2013, Klaus published the book, I Am Agile ISBN 978-87-571-2803-1, which covers the PMI-ACP and Agile certifications. Acknowledgements We would like to give special thanks to Klaus Nielsen, Founding Partner, Global Business Development for writing this white paper. PRINCE2 is a registered trade mark of AXELOS Limited. PMI is a registered trade and service mark of Project Management Institute, Inc. PMBOK is a registered trade and service mark of Project Management Institute, Inc. Contacts May Sau Product Marketing Manager ITpreneurs Tel: +31 (0)10 71 10 260 Email: may.sau@itpreneurs.com ITpreneurs www.itpreneurs.com Weena 324-326 3012NJ Rotterdam The Netherlands 8