Introduction

This paper provides an overview of the PRINCE 2 Project Management methodology. PRINCE (PRojects IN Controlled Environments) is a structured method for effective management of any size or type of project. It is the standard method for use in UK Government Departments & is used increasingly in the private sector, NHS & Local Government. An increasing number of overseas Governments & multi-national companies have adopted the method, or integrated it within their existing project management approaches.

Benefits

The benefits of using PRINCE are that it:

• identifies management, specialist & quality Products/Deliverables & helps ensure that they are produced on time & to budget;

• focuses attention on the quality of Products/Deliverables;

• separates the management & specialist aspects of Organisation, Planning & Control;

• facilitates controls at all levels;

• makes the project’s progress more visible to management;

• provides a communication medium for all project staff;

• ensures that work progresses in the correct sequence;

• involves senior management in the project at the right time & in the right place;

• allows the project to be stopped and, if required, re-started completely under management control, at any time in the project’s life;

• is in the Public Domain & requires no license fee;

• has a well established User Group dedicated to the support, promotion & strengthening of the method.

Project Structures

In PRINCE, each project which is undertaken must address all the Processes concerned with establishing an effective project management environment; have a stated business case indicating the benefits & risks of the venture; a properly defined & unique set of Products/Deliverables; a corresponding set of activities to construct the Products; appropriate resources to undertake the activities; a finite life span; suitable arrangements for control; an organisational structure with defined responsibilities; & a set of processes with associated techniques which will help plan & control the project & bring it to a successful conclusion.

A PRINCE project is divided into a number of stages, each forming a distinct unit for management purposes. Like the project, a stage is driven by a series of sub-processes, has a defined set of products & activities, a finite life span, control elements, & an organisational structure. The delivery of these products, to the agreed quality standards, marks the completion of the stage.

PRINCE defines the organisation of the project & its stages, the processes which drive the undertaking, the structure & content of the project plans, some basic project management techniques & a set of controls which ensure that the project is proceeding to plan. These, together with the products of the project & the activities which produce them, the project business case, all encompassed within a quality management framework, make up the PRINCE environment.

All products of a PRINCE project are filed within a defined filing structure the "Configuration". Management, Specialist & Quality Products are identified & filed separately.

The PRINCE framework provides the flexibility to set management stage boundaries which are appropriate to the needs of the project. Management Stage boundaries are chosen according to:

• the sequence of production of Products/Deliverables;

• the grouping of Products into self contained sets or associated Processes;

• natural decision points for review;

• the risks & business sensitivity of the project;

• the completion of one or more discrete Processes.

The project stages correspond to the steps in the natural project life cycle towards the eventual outcome. Thus the stage boundaries are normally defined to correspond to the completion of the major Products to be built.

Whatever the nature of the project, it is advisable to define one or more planning and/or definition stages in the early part of the project's life. PRINCE 2 requires two processes to cater for this - Starting a Project (where the early foundations are laid) & Initiating a Project (where management commit to the undertaking & a baseline is produced. This may take the form of a Feasibility, Investigation or Definition Study, providing a choice of options & a firm recommendation to proceed (or not!), allowing a management review before any commitment to implementation stage(s) & the associated resources & costs

PRINCE recognizes that few projects can be completed entirely in isolation. The outputs from one project may be used as input by another project. There may be other dependencies between projects, such as the use of shared resources. PRINCE, therefore, provides a mechanism for defining the boundary of a project & its relationship to other projects. In defining the boundary of a project, as with a stage, the emphasis is always on the Products which the project is required to deliver.

The PRINCE methodology applies three key elements to each project & to the stages within a project. These are:

Processes

• Starting Up A Project (SU);

• Initiating A Project (IP);

• Directing A Project (DP);

• Managing Stage Boundaries (SB);

• Controlling A Stage (CS);

• Managing Product Delivery (MP);

• Closing A Project (CP);

• Planning (PL) - also a Component & Technique.

Components

• Organisation;

• Planning (also a Process);

• Controls;

• Stages;

• Management of Risk;

• Quality In A Project Environment;

• Configuration Management;

• Change Control.

Techniques

• Product-Based Planning;

• Change Controls;

• Quality Reviews;

• Project Filing Arrangements;

• Configuration Management.

Processes

The Processes state the minimum content that can be expected to be found in a PRINCE 2 project. Exactly how the Processes are addressed within any given project is the responsibility of the organisation's senior management & the Project Manager, but the method requires that each Process is reflected within the project one way or another.

The seven fundamental Processes have been listed earlier; Planning is also a Process, which is iterated & has impact across the whole of the project throughout its life. All the Processes link to Techniques, some of which are described within the method. It is anticipated that most organisations will already be using some specific techniques & PRINCE encourages the continued use of these where they provide value to the management decision making process. Each Process is defined in the following terms:

• The Fundamental Principles underpinning the Process;

• The Context within which the Process operates;

• An Overview of the Process;

• Responsibilities identifying accountability for the Process;

• The Information Needs required for the Process to function effectively;

• The Key Criteria which will influence the success or failure of the Process;

• Hints & Tips for carrying out the Process in the best way.

The Process-based approach is a novel feature in PRINCE 2 & is the area which most differentiates it from version 1 of the method. The flexibility of the method is, however, underlined by allowing implementing organisations to choose their own destiny in terms of identifying how to meet the requirements of any given Process. In most organisations there will be little need to make changes to the way they are operating, provided effective project management through the use of PRINCE v1 compliant procedures are already in place.

The Organisation Component

The organisation & effective use of people assigned to manage a project need to be considered from the view point both of their specialist skills & their individual personalities. Responsibilities need to be defined within a team structure to ensure that management is both efficient & responsive.

Within PRINCE, responsibilities are defined in terms of roles, rather than individuals. Assignment of roles to individuals is a decision for each project to take, & the same individual may be assigned to more than one role, or to different roles at different stages of the project. 

The Project Board

The Project Board is the ultimate authority for the project & is normally appointed by senior management (often at Director-level) to take overall responsibility & control of a PRINCE project. The Project Board consists of three senior management roles, each representing major project interests.

• Executive - appointed by corporate/program management to provide overall project guidance & assessment throughout. The Executive represents the interests of the business in the project;

• Senior User/Customer - representing users or customers of the outcome or the major products from the project;

• Senior Supplier - representing areas which have responsibility for providing the specialist “know-how” and/or committing Supplier resources for the solution.

Project Manager

A Project Manager will normally be appointed to assume day to day responsibility for planning & management of the project throughout all its stages. The Project Manager takes direction from the Project Board & is responsible for managing the Processes, planning & delivering the products of the project, on-time, within budget, meeting the technical & quality criteria agreed with the Project Board.

The Team Manager (Team Leader in original print of the PRINCE Manual)

In a large or complex project, one or more Team Managers may be assigned the responsibility for ensuring that the products of one or more particular specialist stages of work are produced on schedule, to the defined & agreed quality standards, & within budget.

Depending on the resources required and/or skills available, the Project Board may choose to appoint:

• one Project Manager, supported by a Team Manager for each major area of specialist activity;

• one Project Manager who also takes on the role of Team Manager throughout the project.

(Specialist) Teams

The Project and/or Team Manager have responsibility for Teams of specialist staff, tasked to carry out the activities & produce the Products of the stage. The team organisation, responsibility definitions & the allocation of these responsibilities to individuals will depend upon the size & nature of the project & the skill mix available. PRINCE recognizes the need to establish Team Manager roles where appropriate; Team Manager & Team Leader roles may be synonymous.

Project Assurance

PRINCE 2 separates the Project Assurance function from the Project Support function. The Project Board have responsibility & accountability for Project Assurance. Depending on the size, scope, risk & profile of the project, & their own knowledge, skills & time available, they may choose to delegate responsibility for Project Assurance to others within the organisation. However, accountability for Project Assurance rests with the Project Board & they are not able to delegate this. Project Assurance may not be delegated to the Project Manager.

Project Assurance appears in two forms:

• External Assurance to confirm that the project is following overall & corporate standards (e.g. the published Quality Management System, or particular accounting conventions) & the organisation will usually have an audit function already in place to check these aspects;

• Internal Assurance to verify that the project is delivering Products/Deliverables that meet the agreed Quality Criteria & that internal project standards are being followed. Internal Assurance is ultimately the responsibility of the Project Board.

Project Support

Within PRINCE 2, Project Support will only exist where there is a perceived need for it. Unlike version 1 of the method, a Project Manager may well find that the Project Board see no scope for any administrative support & that any day-to-day assistance that might be needed will need to be on a “grace & favour” basis.

Where a project does warrant the appointment of a Project Support function, the individual(s) selected will report directly to the Project Manager. There is no scope for combining the Project Support & Project Assurance function as was the case in version 1.

Project Support Office

A Project Support Office might well evolve in a multi project environment, to support a number of projects. The methodology recognizes the possibility of a transition from a number of Project Support Teams to a central Project Support Office where the number of projects under development warrants it. The resultant Project Support Office will be able to provide a centre of expertise for all project management aspects within the organisation/site, delivering an internal consultancy service where required by Project Board members, Project Managers & project team members.

Planning

Estimating, planning & re-planning are constant & key activities when managing any project. PRINCE provides a structure for preparing & maintaining plans at appropriate levels throughout the life of a project. Plans are prepared for the Project as a whole, for each stage within the project and, optionally, for the teams’ work within each stage. There is also an Exception planning process to handle divergences from the original plan. The PRINCE 2 method includes Techniques for Product/Deliverable planning, Activity planning Resource planning & Quality planning.

Products/Deliverables & Activities

PRINCE provides a set of planning techniques which give structure to the project. The key to PRINCE planning is the identification & definition of the Products required. From this comes an analysis of the work (i.e. the activities) required to generate these products, & the sequencing of the work.

PRINCE makes a distinction between management activities, specialist activities & quality activities. This is partly because these are usually the concern of different groups of people, but also to ensure that management activities are not overlooked in planning & estimating.

Management activities are concerned with planning, monitoring & reporting the work of the project, in both normal & exceptional situations. They produce management products in the form of plans, reports & other control documents. Management activities include the planning & control of all specialist activities on the project. Although influenced by the specialist content, there is a similar pattern of management tasks on any PRINCE project.

Conversely, the specialist activities undertaken by a project are determined entirely by the scope & objectives of the project. The specialist activities describe the work needed to produce the products required from the project.

The Specialist Products/Deliverables required by the user/customer are identified & defined at the start of the project by the Project Manager & endorsed by the Project Board. Additional Specialist Products may be defined by the strategy appropriate to a particular stage of the project; specialist activities may also be prescribed by an organisation's own particular technical strategy. PRINCE therefore acknowledges the need for flexibility in the definition of specialist activities & the corresponding Products.

Quality activities may be performed by anyone who is able to make a contribution to the Product under review. Individuals within the project & host organisation as well as people external to the organisation are all appropriate. Quality activities must be planned for early in the life of the project.

The PRINCE Product planning techniques require every project to be described & defined in terms of its Products or Deliverables. This is a very effective way to ensure full understanding of what is required & to ensure that, as far as possible, all angles are covered.

Planning for the Delivery of Specialist Products

PRINCE Plans are concerned with the Products to be delivered & with the activities necessary to ensure that these Products emerge on time & to the required quality standards.

The project Products are identified as a first step in planning; definition of each product (via the PRINCE Product Description) enables its make-up & quality requirements to be documented & properly understood. A Product Breakdown Structure illustrates the hierarchical make-up of the complete set of project products & a Product Flow Diagram provides a view of the relationship each product has with others, within & outside of the project.

The Project Timescale or Gantt Plan charts the major activities of the project. It is usually derived from the Dependency Network (PERT Network) which shows the relationships that exist between project activities. It is used with the Project Resource Plan to monitor progress on the project as a whole. It also addresses planning requirements related to Quality Control & Configuration Management.

A Stage-level Gantt Plan shows the products, activities & quality controls for each stage of the project. The Stage-level Gantt Plan is produced & approved at the end of the previous stage (the plan for the first stage is prepared with the project plan).

Detailed Gantt Plans can be expected to exist in most projects, to give a detailed breakdown of particular major activities These are termed “Team Plans”.

Lower level Plans (or Work to Lists), if required, are derived from the Stage & Team Plans to allocate detailed activities (and Products/Deliverables) to particular members of a Specialist Stage Team. Although this level of plan is not formally included in PRINCE 2 they may be utilized if required.

Resource Planning

Resource Plans are concerned with managing the funding & effort resources of the project. They are derived from the corresponding Gantt Plans.

The Resource Plan for the project identifies the type, amount & cost of the resources required by the project related to each stage of the work. It will also identify equipment, building, & fixed-price costs associated with the project. The intention is to provide a complete resource & financial picture of the undertaking.

A more detailed Resource Plan at Stage Level identifies the resources required by the particular stage. It defines the budget required by the stage & is used to report actual expenditure & resource usage against plan.

More detailed Resource Plans at the Team Level will be produced when required, to plan & control a particular major activity, & the associated team work plans & Products.

Quality Planning - BS/EN/ISO9000

Action must be taken at the planning stage to ensure that the project can deliver Products to the required quality. Quality Criteria must be defined & agreed, & incorporated into a Product Description for each Product identified; a Project Quality Plan must be defined, published & adopted; Quality Review procedures must be established & staff trained; review activities must be properly resourced. Whatever action is proposed to build quality into the project, the measures must be consistent with any published Quality Management System (QMS) that is already in effect. PRINCE has been designed to comply with the BS/EN/ISO9000 Quality Management Standard & with BS6079 the Project management Standard, all three being Process-driven; the foundation for quality & effective, modern project management is therefore integral & inherent in PRINCE 2.

The results of the quality planning activity must be integrated into the Gantt & Resource Plans at each level. Just as quality must be built into the Products, so must quality control be built into the plans.

The Project Level plan sets the overall quality approach for the entire project. It defines the standards to be followed & the quality criteria for the major products. It also identifies external constraints that may apply to the project, such as a specific Configuration Management Method.

The Stage Level plan identifies the quality criteria, methods & review guidelines for each Product produced during the stage.

A Team plan might be required for specific individual activities such as carrying out interviews within a particular user/customer area. The Project Manager is responsible for deciding whether any plans below stage-level are required; this decision will be endorsed by the Project Board at the Project Initiation or End-Stage Assessment meeting.

Tolerance & Planning

The Project Board sets tolerances for Stage Plans. These define the limits of timescale & cost (or sometimes effort) within which the Project Manager can operate without further reference to the Project Board.

An Exception Report and, subsequently, if required by the Project Board, an Exception Plan is produced in situations where costs or timescales are forecast to be exceeded beyond the tolerances set by the Project Board. The Exception Report describes the cause of the deviation from plan & its consequences & recommends corrective action to the Project Board. Once considered & approved by the Project Board, the Exception Plan replaces the remainder of the current Stage Plan.

The Controls Component

Regular & formal monitoring of actual progress against plan is essential to ensure the timeliness, cost control & quality of the system or undertaking being developed. PRINCE provides a support structure of Management & Product oriented controls to monitor progress, supported by a reporting procedure which enables re-planning or other appropriate corrective action to be taken.

Management Controls

PRINCE provides a structure of management controls to be applied throughout the project. These controls cover all aspects of project activity and, at the highest level, allow senior management to assess project achievement & status prior to committing further expenditure. Controls are applied through meetings of (customer) project management & (supplier) project staff, with each meeting producing a set of pre defined outputs. Management Controls are defined at Project Initiation to ensure that the project is set up with clear Terms of Reference, incorporating agreed & measurable Objectives & an adequate management structure. Including Project Initiation, there are 5 key management controls - End & Mid Stage Assessments, Project Closure, & Tolerance.

Project Initiation

To ensure a firm foundation & to provide a positive start to the project, ensuring that the terms of reference, objectives, plans & controls, business risks, benefits & financial return, organisation structure & job definitions are clearly defined, published, understood & agreed.

This early stage is very important & is the result of two Processes - Starting A Project & Initiating A Project. The key output is a Project Initiation Document which can be used to Baseline the project.

End Stage Assessment (ESA)

This is a required management control & occurs at the end of each stage. It consists of a formal presentation to the Project Board of the current project status, & reviews the overall business case (benefits & risks). The approval of the proposed Resource & Timescale (Gantt) Plans for the next stage is also obtained. Project Board approval, with agreement by all the members, must be obtained before the project can proceed to the next stage.

Tolerance & Mid Stage Assessment (MSA)

This will be held to review an Exception Plan which will be produced if the project has deviated from the original, approved, plans & a significant departure from plan has occurred. The measure of a “significant departure” is that the Tolerance stated by the Project Board at the beginning of the management stage has been, or is likely to be, exceeded.

Tolerance is variable & will be assigned to each project stage to reflect the respective business risk, but a rule of thumb is that Time Tolerance of plus/minus 1 week & Cost Tolerance of plus/minus 10% is generally about right.

Project Closure

A final review of the project's work is held, usually (but not necessarily) in the form of a Project Board meeting. This is similar to a stage assessment but relates to the entire project rather than a single stage. The objective is to ensure that all the project Products/Deliverables have been satisfactorily delivered to their stated quality standard & that the project documentation is complete. A review of the project management standards & approaches used by the project will be carried out & a Lessons Learned Report produced for consideration by the Project Board. This report records what has been learned from using the PRINCE project management & quality management standards for the project & is created during the “Initiating A Project” process & “populated” as the project progresses; it will eventually be sent to the organisation's Quality Manager.

Recommendations will also be made for Follow-on Actions to record & trigger further work which is recommended following the closure of the project.

Product/Deliverables/Outputs Controls

Quality & specialist controls are applied to specific products rather than to the overall output of a stage or project. The aim is to identify & correct errors as early as possible in the development process. They will usually take the form of a formal or informal quality review, whatever is specified in the Product Description.

Quality control may take many forms from a visual inspection, through a test program, to a formal meeting. These are all Techniques & PRINCE 2 describes some, but not all that might be available - the selection of appropriate Techniques is left to the implementing organisation. However, one of the most powerful Technique is the Quality review which has been successfully used in PRINCE version 1 projects for a number of years.

Quality Controls - Quality Review

At each Quality Review, appropriate provider & user/customer staff are designated to examine a Product to ensure that it is complete & correct; these “appropriate resources” are identified in the Stage-level Plan & the corresponding Product Description. The Product is reviewed against defined quality criteria contained within the Product Description, which assures its technical integrity & its compliance with user/customer requirements; It is thereafter subject to formal change control procedures.

This principle applies to informal quality reviews (for example a test, visual inspection, or desk-check) & to formal quality reviews where 2-3 reviewers meet with the author of the product under the chair of a suitably senior person to “walk-through” the product.

Checkpoints

This is a regular (possibly weekly) specialist & management control point. Checkpoints are usually (but not necessarily) conducted by the Project Manager or Team Manager, together with (Specialist) Teams. They provide the basic information used to measure actual achievement against plan, & to agree on the content of the next period of work for each team member. Checkpoints will commonly take the form of a brief (40 minutes maximum) meeting but as the Checkpoint is essentially a communication device, other methods such as telephone, facsimile, E-Mail, video conferencing, are all viable options.

Change Controls

Unplanned situations relating to changes to one or more Products need to be captured as “Issues” relating to the project. Examples of this are good ideas that project team members identify, resource changes, errors discovered in a finished product, & departures from the agreed specification. Because the situation is unplanned, it needs to be recorded & action agreed, in order to contain the impact & prevent wider divergence from plans. Issues are best handled within the framework of a formal Configuration Management scheme.

Configuration Management

A Configuration Management Method (CMM) controls the development of products by providing a formal mechanism for labelling products, their development status, & the relationship between them. PRINCE does not define or recommend a specific CMM but emphasizes the need for a suitable system.

Co-ordination

To make the most effective use of PRINCE, each organisation should consider appointing a PRINCE Coordinator with sufficient authority & experience to perform the role specified below.

PRINCE Co-ordinator Prime Responsibility

The PRINCE Co-ordinator’s main function is to be an internal consultant for PRINCE projects, to ensure the smooth introduction & the continuing effective use of the PRINCE methodology.

Main Tasks 

• to develop expertise in PRINCE so that the site can become self sufficient in terms of support;

• to administer & monitor the implementation of PRINCE to ensure that it meets the need;

• to ensure that the methodology continues to be used in accordance with agreed standards;

• to ensure that managers of future projects are aware of the methodology & that proper consideration is given to its use;

• to identify training needs & to plan & organize training, including the presentation of team courses & management overviews;

• to act as a liaison point for all PRINCE aspects & with the PRINCE User Group;

• to provide a focal point for PRINCE advice & support. 

Further Information

For more general information refer to the PRINCE 2 documentation. Specific questions may be answered by referring to each particular section, especially in “Hints & Tips”.

Acknowledgement is made to SPOCE Project Management Limited