PPRINCE2 is composed of 4 elements: principles, themes, processes and tailoring to suit the needs of the project. All of these elements are briefly described below.
The principles are universal and are the guiding obligations which underpin everything else in PRINCE2. The themes are aspects of project management which must be addressed throughout the whole duration of the project. The processes describe who does what and when. The last element – tailoring - is about ensuring that PRINCE2 is applied sensibly on projects of different type or scale.
The customer and supplier
PRINCE2 assumes that every project is commissioned (i.e. paid for) by the ‘customer’ organization, and the deliverables (called products in PRINCE2) are delivered by one or more ‘supplier’ organizations. Even though the supplier might actually be a business unit of the customer organization – for example the I.T. department – it still performs the supplier role of delivering products.
At the end of the project, these products will be used by one or more areas of the customer’s business in their day to day operational activities – what we call ‘business as usual’. The expectation is that by using these products, the customer will benefit in some way.
For example, a project replacing the staff’s old PC’s with new ones would cost a considerable amount. If using the new PC’s makes the staff more efficient, thereby saving the customer money on salaries, then this is a benefit of the project.
PRINCE2 is based upon 7 principles. Providing they are all applied on your project then you can safely say that your project is a PRINCE2 project.
One thing which drives the decision-making on a PRINCE2 project is the need to always be able to justify the necessary investment required to achieve the expected benefits. In other words, there must always be a clear return on investment (measured financially or not), otherwise the project should be closed down. This is one of the strengths of PRINCE2 and one of the things which sets it apart from other project approaches or toolkits.
Learn from experience
This principle says that project practitioners should learn from the experience of previous projects.
Supposing on a previous project we had chosen a particular supplier and they had consistently delivered low quality work late. Not such a great supplier then. It would make sense that on subsequent projects, a different supplier is chosen. In other words lessons have been applied which were learned from previous projects.
In this way, PRINCE2 is an aid to continuous improvement in the way an organization manages its projects.
Clearly defined roles and responsibilities
It would be sensible, when setting up a project and appointing people to the project management team, that people with sufficient authority are assigned to those roles commensurate with their level of accountability on the project. Also, if it’s not clearly defined who is accountable or responsible, the project can quickly fall into a scenario whereby people try to pass the buck.
PRINCE2 devotes a whole appendix to a detailed list of responsibilities for each member of the project management team. The list doesn’t need to be followed in full, but can be tailored to suit the project’s needs.
Focus on products
When planning in PRINCE2 the starting point is always to ask the question “what must be delivered (from the project)?” If this question is not answered with sufficient clarity, the plan will undoubtedly fail. After answering this question, the activities, their sequence, time, resource and cost estimates can be added to the plan. To assist with planning, PRINCE2 offers an extremely effective technique known as the product-based planning technique.
Manage by exception
PRINCE2 takes the view that it’s impossible to forecast what will happen on a project with 100% certainty. So, for the Project Manager to avoid having to escalate to the project sponsor (known as the Executive in PRINCE2) for a decision when every small slippage in time and/or money occurs, PRINCE2 recommends the use of ‘tolerances’. These are the permissible deviations allowed within the plan before escalation to the next level of authority. Tolerances can be set for time, cost, scope, quality, risk and benefits. For example, a project which is allowed to deliver 2 weeks late would have a time tolerance of +2 weeks.
Manage by stages
It’s a risky decision to commit all the money required for a project right at the start and then have no decision point in place to review that decision. But such projects exist and the problem is that they continue to spend money and consume resources even though the project is not going to give a return on investment. PRINCE2 therefore recommends that a project be broken down into a number of ‘management stages’ each stage coinciding with a go/no-go decision by the Executive. This is therefore a far less risky approach to taking investment decisions.
Tailor to suit the project
The last principle in some ways is the most important. It’s about applying PRINCE2 with common sense. Rather than blindly following the guidance in the PRINCE2 as if the words were written in stone it’s much more sensible to think how much of PRINCE2 does your project really need. Thinking of applying the remaining 6 principles will help practitioners here.