Project Management Method

Foundation Notes

PRINCE2 Foundation Notes created by Borys Pawliw

BACKGROUND
Prince2 stands for PRojects IN Controlled Environments.
It is NOT:

software
a planning tool (such as MS Project 2000)
not carved in stone: it is flexible
not overly cumbersome or bureaucratic
not restricted to IT projects, large or small
not a guarantee of success, but its usage can limit failures

It IS:

Basically a book produced originally by the CCTA (Central Computer and

Telecommunications Agency) but now administered by the OGC (Office of
Government Commerce); it describes a structured method of starting up,
running and closing a project of any size
The Title is Managing Successful Projects with Prince2

HISTORY

The origins of Prince2 to go back to 1975, when Simpact Systems Ltd. created
a method called PROMPT to manage IT projects.

In 1984, the UK government adopted it and mandated it to use for a series of

large scale government IT projects.

The CCTA was charged with promoting and implementing it.

In 1987 the CCTA decided to created and adopt an updated PROMPT, which was
to take into account real world experience and latest thinking.

PRINCE was released in 1989.

The name PROMPT was not retained for copyright/trademark reasons. PRINCE
was declared a public domain product. Anyone could use it without royalty or
licensing fees (GRRRR!!!!)

It was successful in private and public IT projects, but it was decided to make a
new version which was simpler, more able to move into non-IT and smaller
scale projects. The CCTA collaborated with many external entities to do this.

Prince2 was launched in October 1996.

PRINCE2 Foundation Notes created by Borys Pawliw

WHY DO PROJECTS FAIL?

Failure rates for projects across all sectors are 80%: only 20% come in on
time; on budget; on spec.

Six main reasons for project failure:

1.
2.
3.
4.
5.
6.

Lack of sound business case - project not worthwhile to begin with

Lack of understanding of the end product
Lack of management structure with clear roles and responsibilities
Failure to plan, monitor and control
Failure to communicate plans to all stakeholders
Inadequate systems to manage risk, change and quality

Prince2 addresses the above by:

Mandating that a project be based on a sound business case, balancing benefits

against risks + costs
Focusing on quality of products/deliverables
Providing communications mediums/channels for all staff
Ensuring work progresses in the right sequence and that the progress is
transparent to management
Ensuring a project can start, stop, then restart under management control if
needed
Its a public domain method, so costs are low
De-facto standard means knowledge is widely available in the marketplace for
jobs and training.

PRINCE2 Foundation Notes created by Borys Pawliw

BASIC CONCEPTS OF Prince2

Generally speaking, there 4 main aspects to complete any job or work task
1. The Method: How do you approach it? How is work organized? Who does what?
How will things be communicated? How will things be monitored?
2. The Procedures: The specific job instructions: what must be done and the order
it is to be done in?
3. The Techniques: Tricks of the trade, the skillset needed to get the job done.
4. The Tools: What things/aids do you need to get the job done?
Prince2 does not mandate specifics for techniques or tools, but provides general
guidance as to selecting the most appropriate ones.

Product based planning, critical path analysis and GANTT charts are some of the
techniques Prince2 can work with.
Very often MS Project is a tool that is used, but this is not mandatory

Prince2 does not operate in isolation from any organization: it is flexible

enough to work within an organization.
It works in the following framework

Prince2
BUSINESS CASE FOR THE PROJECT
This is needed to ensure that the project is one which is always worth doing. It must
analyze the benefits of the Project vs. the risks + costs.

EXISTING COMPANY SYSTEMS, PROCEDURES, STANDARDS,

CULTURE, EXPERIENCE AND BEST PRACTICE.
This is the basic foundation for the project.

(ISO9000 STANDARDS INCLUDED HERE)

PRINCE2 Foundation Notes created by Borys Pawliw

PRINCE 2: Its 3 main elements and their makeup

Components are broken down to 8.

Processes are the management procedures which run from conception to

closedown of a Project. There are 8.

Techniques: Prince2 does not provide complete, comprehensive details, but

gives 4 specific techniques that are useful

COMPONENTS
1. Organization: Defining roles,
responsibilities and relationships
for the people doing the Project.
2. Planning: Occurs across the
board; products, activities and
resources.
3. Controls: Right products at the
right time, and that the Project
remains valid against the
business case.
4. Stages: Partitions of the
Project, grouping logically related
activities. Punctuated by decision
points. At least 2 stages even in
smallest project- Initiation Stage
and then Remainder of the
Project
5. Risk Management: Critical in
Prince2
6. Quality: Strong emphasis on
deliverables.
7. Configuration Management:
Systems for tracking and
controlling projects and the
documentation.
8. Change Control: Prince2
defines procedures for managing
change

Prince2 IS
PROCESSES
1. SU: Start Up: A pre-project
process. The business case is
developed here - is the project
worthwhile and viable? Done
before resources are requested.
2. IP: Initiating Project: Aimed at
creating a good baseline for the
Project and that everyone
understand the Projects goals
and their own roles.
3. DP Directing Project: From
start-up to closedown, it is aimed
at the Project Board, as defined
in the Organization Component
4. CS. Controlling Stage: This is
everyday project management
process: authorising work,
monitoring progress and
reporting progress to senior
management.
5. MP. Managing Product
Delivery: The main workshop of
the project, most resources
consumed here; products of the
Project are created
6. SB. Stage Boundary
Management: Gives Project
Board key decision points, to
allow progression to next stage
7. CP Closing Project: A
controlled and orderly close for
the Project, either on
time/natural end or prematurely.
Lessons Learned report is
important output here.
8. PL. Planning Process: Runs
throughout the Project (like
Directing a project) and is
common to all processes. Both a
process and a component.
Common to all the other 7
processes - used by all 8
processes.

PRINCE2 Foundation Notes created by Borys Pawliw

TECHNIQUES
1. Product Based Planning:
Including product breakdown
structures, product flow diagrams
& product descriptions
2. Quality Reviews: Involved
people meet to discuss and
assess completed product for
errors, omissions and noncompliance with stated quality
criteria
3. Change Control Approach: Set
of techniques to manage
inevitable changes as the Project
progresses. Many organizations
have internal, existing ones;
these can be applied but only
provided they do not conflict with
Prince2 guidelines.
4. Project Filing: General
recommendations on systems
and techniques to make sure all
information is filed both in an
orderly and easily retrievable
format.
Also, existing techniques that are
already in use, that work well for
the organization and do not
conflict with Prince2 can be used.

Prince2 MANUAL: A Breakdown

The Prince2 Manual was subjected to its first major revision in 1998. From a
Ringbinder format to a bound book, colour change is slight

Content was changed slightly in 1998 - especially wrt how it applies in a MultiProject/Programme environment.

First 30 pages are: Contents List + Introduction & Method

3 main sections deal with:

Last 60 pages are Glossaries, Appendices and Further Information

COMPONENTS
PROCESSES
TECHNIQUES

PRINCE2 Foundation Notes created by Borys Pawliw

Prince2 PROJECT STRUCTURE: A Breakdown

All Prince2 Projects must share some very basic characteristics in terms of their
structure:
1. BUSINESS CASE

2. ORGANIZATION

3. PRODUCTS

Has a clearly stated

business case showing
benefits and risks

Has an organized structure

identified with defined roles
and responsibilities of all

Can show a properly

defined and unique set of
deliverables/products

4. ACTIVITIES

5. LIFECYCLE

6. PROCESSES

Has a corresponding set of

activities and resources
necessary to bring the
products into reality

Has a finite lifespan, with

clear stages and suitable
arrangements for
monitoring and controls for
the duration of the lifecycle

Has processes and

associated techniques that
guides the Project and
bring it to a successful
conclusion

STAGES are VERY IMPORTANT!!!

A Prince2 Project is divided into a number of Management Stages. They form a

distinct unit for management purposes.

These stages run in sequence and DO NOT OVERLAP.

They are separated by decision points, or stage boundaries: this enables

management to authorise or prevent progress to the next stage.

Project stages correspond to natural steps in the project life cycle; boundaries
are designed to correspond to completion of major products & key decision
points for resource commitment.

Prince2 allows that Projects are rarely taken in isolation. Output for one project
can be the input for another.

Many projects can be sharing common resources: this environment is a multiproject or Programme Environment.

Prince2 gives a mechanism for defining the boundary of an individual Project

and its relationship to other projects in the Programme Environment.

PRINCE2 Foundation Notes created by Borys Pawliw

Prince2 COMPONENTS: Organization

Organization and staffing are critical for Prince2 projects

Prince2 assumes that all projects take place within a customer / supplier
environment
1.
2.

Customer: Defines requirement, pays for project and is the end USER.
Supplier: Provides skills and know how to create the end product.

This approach is then combined with the need for a sound business case for the
Project. The 3 interests then form the Prince2 management structure.
The Project Board

Focal point of PRINCE 2 organization structure is the PROJECT BOARD.

It is the overall authority of the Project and is responsible for initiation,

direction, review & closure.

It is the highest authority for the Project, responsible only to a corporate

strategy body, such as a Board of Directors.

Prince2 defines it as Corporate/Programme Management, and they hand over

the PROJECT MANDATE to initiate the project.

The Project Board needs to represent the customer, the supplier & the business
interest. The Project Board is usually comprised of 3 distinct roles.
1. Senior User (Customer Interest),
2. Senior Supplier (Supplier Interest)
3. Executive (Business Interest)

These are roles, not jobs titles or individuals. The 3 interests must be properly
representedand a Project Board must exist.

In small projects, the role of Senior User and Executive can be combined. In
very large projects, there may need to be a team of people representing each
role.

PRINCE2 Foundation Notes created by Borys Pawliw

Prince2 COMPONENTS: Organization: The Project Board described in detail

Each of the 3 roles has very clearly defined responsibilities:

The Executive:
1. This is the key role and is ultimately responsible for the entire project,
supported by the other two roles.
2. It owns the business case for the Project and needs to ensure the Project
is delivering value.
3. The Executive normally chairs meetings of the Project Board. Conflict
resolution plays a key role here.
4. If the Project is part of a Programme, the Programme Director appoints
the Executive - and has the option of appointing the other Project Board
members, or delegating that ability to the Executive.

The Senior User:

1. This role represents the interests of all those who will use or be impacted
by the Project and its product(s).
2. The senior user is responsible for specifying user needs and commitment
of user resources
3. The senior user must monitor what is being produced, ensure that it will
meet user needs of the users, that the expected benefits of the project
will materialise, that it is going to meet the users interests and have
minimal negative impact on other parties.
4. In some large projects, the senior user role may need to be filled by
more than one person.

The Senior Supplier:

1. Represents the interests of those designing, developing, implementing
procuring or facilitating the products.
2. This role is sometimes filled by people external to the organization (i.e. a
senior consultant from Accenture)
3. Otherwise, it is usually someone from an IT department, or from
Accounting (for SAP), or someone who deals with contracts with external
suppliers

PRINCE2 Foundation Notes created by Borys Pawliw

Prince2 COMPONENTS: Organization: The Project Manager & Team Manager

Role

The Project Board members generally work only part time on the project: they
generally have many other commitments/hats to wear.

Project Manager

Prince2 demands that a fourth role be mandated: that of Project Manager

The Project Manager plans and oversees the day to day work of the Project.

Must ensure that the Project is delivering the right product at the right time to
the right standard of quality and under budget.

The Project Manager role relates to 1 person: on large projects, Team Managers
may be appointed to support the Project Manager during some complex
technical stages that demand specialist knowledge

The Program Manager is there to ensure that the result is achieved that the
benefits outlined in the Project Initiation document are achieved.

Specific responsibilities of the Project Manager are:

Overall planning for the Project

Motivation and leadership of staff
Definition of responsibilities for specialist Team Managers (if
applicable)
Liaison with Programme Management over related projects
Reporting progress and raising issues to the Board

Team Manager

Appointment of Team Managers is optional, depending on the scope of the

Project.

When existing, the Team Managers must manage the creation and delivery of
specialist work packages under their control, as per definition of Project
Manager

Team Manager works with the Project Manager to define responsibilities for
Team Members and give planning/leadership

Any suggested changes to products by the Team Manager can be raised

informally or as Project Issues and given to the Project Manager for a
decision/action.

Team Managers attend and (usually) run Checkpoint Meetings, which raise
Checkpoint Reports for the Project Manager. These are used to provide
Highlight Reports to the Project Board.

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Prince2 COMPONENTS: Organization: Project Support Function & The Project

Assurance Function
Project Support

If the project is very large, administration may go beyond the abilities of the
Project and Team Managers.

The Project Board may then establish a Project Support Function

Prince2 makes Project Support optional where needed:

Many large organizations have a project support function already existing

Tasks of the Project Support function can include

1.
2.
3.
4.
5.

Setting up and maintaining the documentation and filing system

Updating plans and assessing the impact of change
Configuration management and change control
Minuting of meetings and report compilation
Defining and maintaining project standards

Project Assurance

Project Board members place much reliance on the Project Manager, as they
cannot work on the Project full timebut can they trust what the Project
Manager says all the time?

Need for an ongoing, independent assessment of the Projects real status

The Project Assurance function assesses all aspects of the Projects

performance and products, independent of the Project Manager

Prince2 makes Project Assurance mandatory; it must be separate from the

Project Support Function.

In some cases, the Project Support Office is providing both the Support
Function and the Assurance Function; in such instance, great care must be
taken to ensure that there is no conflict of interest and that there is a clear
distinction between the work being done for the Project Manager and Assurance
work being done for the Project Board.

Project Assurance is the responsibility of each Project Board member and the
responsibility cannot be delegated, though some of the work can be

Project Assurance must NEVER be delegated to the Project Manager or Teams.

PRINCE2 Foundation Notes created by Borys Pawliw

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Prince2 COMPONENTS: Organization: The Basic Organization Charts

PRINCE2 Foundation Notes created by Borys Pawliw

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Prince2 COMPONENTS: Plans: The Basics & Project Plans

Prince2 does not state what sort of plans must be used, but it does incorporate
principles of product based planning

A GANTT chart is not really a complete project plan, though many people think
it is.

A Prince2 plan is very comprehensive. It states:

1. What has to be produced
2. What has to be done to produce it
3. What has to be done to make sure it is produced correctly
4. When it will be produced
5. How progress will be monitored
6. What must be done to control risk

There
1.
2.
3.

are up to 3 planning levels in Prince2:

Project Plans (mandatory)
Stage Plans (mandatory)
Team Plans (optional)

Making and using the Plans: Project Plans

Construction of Prince2 plans is normally on a Top>Down basis: logical descent

into detail and allows for groupings of products/activities that may become a subproject.

Project Plan forms part of the Project Initiation document; may give some detail
for early stage plans to be incorporated in it.

The Project Plan identifies:

1.
2.
3.
4.

key deliverables
resource requirements
total costs
major control points (such as stage boundaries)

Once The Project Initiation documented is accepted, the initial Project Plan is
baselined and shows the original plan that approved the Project

Subsequent versions of the Project Plan are produced at the end of each stage to
show progress, agreed changes and revised costs duration forecasts

This Project Plan is used by the Project Board to monitor Project deviation from
original size and scope.

PRINCE2 Foundation Notes created by Borys Pawliw

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Prince2 COMPONENTS: Plans: Stage Plans & Team Plans

Stage Plans:

For each stage defined in the Project plan, a stage plan is done.

A stage plan refers to a management stage covering a discrete timeframe

separated by decision points

A Stage plan is finalised near to the end of the previous stage. This should give
high confidence in its chances of success, because:

It is produced close to the timeframe when the planned events will

take place
For a much shorter duration than the Project plan
A stage plan is developed with the benefit of hindsight of the
performance of the immediate prior and all preceding stages.

They are similar to the Project Plan in content, but with each element broken
down into sufficient detail to allow for day to day control by the Project Manager

Team Plans:

They are usually required for all except the smallest projects.

They are developed parallel with the Stage plan and drop the Stage plan to a
great level of detail.

The Team Manager produces the Team Plan in conjunction with the Team
Members and with the agreement of the Project Manager. This takes place
during the Managing Product delivery process.

Team plans often reflect work to be carried out during a Technical Stage within
a Management Stage of a Project.

Prince2 does not require the production of Team Plans for individual members
(also known as Work To lists), but they can be drawn up if the Project or Team
Manager desires it.

PRINCE2 Foundation Notes created by Borys Pawliw

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Prince2 COMPONENTS: Plans: Exception Plan

If a Plan is predicted not to finish within agreed tolerances, then an Exception

Plan may need to be produced.

Exception Plans are produced at the same level of detail of the plan they
replace. Most of these plans are created to replace a Stage Plan, but they can
replace any planincluding the Project Plan.

An Exception Plan picks up from current Stage Plan action and continues to the
end of the Stage.

It has the same format as the Plan it is replacing, but the text will cover why
the Exception plan is needed, what will be the impact on the Project Plan and
the Business case and the associated risks

This extra information comes from the Exception Report.

Exception Plans always need the Approval of the Project Board.

PRINCE2 Foundation Notes created by Borys Pawliw

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Prince2 COMPONENTS: Controls: Introduction

Any Project Management method must allow management at all levels to

exercise control over what has been approved.

Control is about decision making and is the central role of project management.
The purpose of control is to:
1. Ensure that the project is producing the required products that meet the
defined acceptance criteria
2. Project being carried out to schedule and budget
3. Project remains viable against the business case

Controls ensure that for each level of a Project Management team, the levels
above can:
1.
2.
3.
4.
5.
6.

Monitor progress
Compare achievement with the Plan
Review plans and options against future scenarios
Detect problems
Initiate corrective actions
Authorise further work

Controls need to cover capturing information external to the Project and taking
required actions (i.e. change in price of raw materials, political developments or
economic downturn etc)

Prince2 applies concept of Management by Exception as far as the Project Board

is concerned.

Once having approved the Stage Plan, the Board is kept informed by reports
during the Stage: no need for Progress meetings during the stage. The Project
Manager should advise if any exception situation is forecast.

The Project Boards Major Controls are:

1. Project Initiation: Should the project be undertaken?
2. Highlight Reports: Regular Project reports during a stage, prepared by
the Project Manager after analysing checkpoint reports prepared at Team
Level.
3. Exception reports: early warning of forecast deviation beyond tolerance
levels.
4. Mid stage assessment: the Project Board considers what action to
consider given a forecast deviation.
5. End stage assessment: has the stage been successful?; is the Project on
course?; is the biz case viable?; are risks still under control?; should the
next stage be undertaken?
6. Project Closure: has the Project delivered everything expected? Is a
follow-up stage necessary? What lessons are there to be learned?

PRINCE2 Foundation Notes created by Borys Pawliw

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Prince2 COMPONENTS: Controls: Tolerance & Stages

Tolerance

No project goes 100% according to Plan. Minor departures from plan occur
often.

In order to avoid the Board being bothered by unimportant deviations,

tolerance levels are set by the Board and delegate them to the Project Manager

As a stage advances, the definition of a significant departure is that the

tolerance has been or likely will be exceeded.

Tolerance is a major Project Board control, but it can have benefits at other
levels.
1. Project Tolerance: set by Corporate or Programme Management
2. Stage Tolerance: agreed by the Project Board at the beginning of a
management stage and delegated to the Project Manager
3. Product Tolerance: usually recorded in the work package, agreed
between the Project Manager and the Team manager who has
responsibility for the product.

Stages

Stages are an important control mechanism; they are partitions of the Project
with decision points at their conclusion (and sometimes within their lifetime)

Prince2 differentiates between 2 stages: management stages and technical

stages
1. Management stages: sequential periods of time; they cannot overlap or
run in parallel; they are separated by Project Board decisions as to
whether to continue the Project and commit resources to the next
management stage.
2. Technical stages: these comprise sets of technical activities leading
towards a particular product; they often overlap and run in parallel,
normally planned and managed by the Team Managers under the
direction of the Project Manager;

There must be great care to manage the interface between management

stages; in most cases it is not ideal to stop work on a Project while the Project
Board meets to assess the End Stage report, updated Plans, updated Business
Case and next Stage Plans.

Technical stages often overlap management stage boundaries and some degree
of planning for the next management stage must be included in the current
management stage .

PRINCE2 Foundation Notes created by Borys Pawliw

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Prince2 COMPONENTS: Risk Management

Risk is an inherent component of all projects - projects are unique and may
have more unpredictability than regular process environments.

Prince2 attempts to limit avoidable and unnecessary risks

Prince2 defines risk as the chance of exposure to the adverse consequences of

future events

There are two types of risk defined by Prince2:

1. Business Risks: Threats to the business case - even if the Project
succeeds, is it still worthwhile? Also known as external risks, as they are
outside the control of the Project Manager. Change in market conditions,
legislative changes, changes to weather, terror attacks, political opinion
are external risks. These risks are the concern of the Project Board.
2. Project Risks: Threats to the Project being able to deliver the product on
time, on budget and on spec. Includes failure of a supplier, skill
shortages, misunderstanding of the products. This risk is internal to the
Project and in the scope of responsibility of the Project Manager, Team
Leaders and the Board.

Risk is handled in two ways in Prince2by RISK ANALYSIS and RISK

MANAGEMENT
I:

Risk Analysis: this is about what, what if and what now?

a) Risk Identification: determine the potential risks that can
happen
b) Risk Estimation: what is the importance/probability of each risk
identified based on magnitude/likelihood
c) Risk Evaluation: deciding if the risk acceptable, and if not what
action can be taken to make it acceptable

Once risk has been identified, the following actions can be taken:
Prevention: Stopping the risk occurring or preventing it from having an
impact on the business or project
Reduction: reducing the probability of the risk happening or reducing the
impact to acceptable levels
Transfer: passing the impact of the risk to a third party (namely via
insurance policy)
Contingency: where actions are planned to come into force if/when the
risk occurs
Acceptance: the Project Board goes ahead, accepting the risk may
happen

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Prince2 COMPONENTS: Risk Management

After risks are ANALYSED (i.e. IDENTIFIED, ESTIMATED AND EVALUATED), they
need to be managed.

Risk Management consists of 4 major activities

1. Planning: for countermeasure actions identified during risk evaluation
and developing a detailed action plan for inclusion in the Stage Plan
2. Resourcing: identifying/assigning resources to be used for avoidance or
litigation actions
3. Monitoring: checking that planned actions are having the desired effect
and watching for signs that a risk is developing
4. Controlling: taking action to ensure events specified in the plan occur

PRINCE2 Foundation Notes created by Borys Pawliw

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Prince2 COMPONENTS: Controls: Quality in a Project Environment

Prince2 definition of quality is taken from ISO 8402 Standard

The totality of characteristics of an entity which bear on its ability to
satisfy stated and implied needs
A simpler definition is
Fitness for purpose

In a project environment, quality management ensures that the products

produced are fit for the intended purpose and satisfy the needs and
expectations of the customer.

This must be reflected throughout the Prince2 Project environment: ideally, it

should be stated at the Project Mandate, included in the Project Brief and
expanded in the Projection Initiation document.

There are 4 inter-related elements that make up Quality Management.

1.
2.
3.
4.

Quality
Quality
Quality
Quality

System
Assurance
Planning
Control

Prince2 assumes that projects will be carried out in a formal environment

covered by a published quality management system, such as ISO9001. It lays
down standards for documentation of processes and procedures to ensure
quality consistency.

ISO9001 has 20 main clauses + sub clauses that must be satisfied

Prince2 is not a quality management system in its own right, but it does
contribute to such a system in its Appendix B of the Manual; it relates Prince2
to each of the 20 clauses in the ISO9001 standard

A company must have a Quality Manual, and this Quality Manual must:
1) Make a clear statement of the Companys Quality Policy, as defined by
senior management
2) The Quality Manual needs to document the organization structure and
then outline all the processes and procedures which impact quality

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Prince2 COMPONENTS: Controls: Quality in a Project Environment: Quality

Quality Assurance

Quality Assurance function is responsible for setting up and maintaining the

Quality Management system.

QA ensures that everything that goes on in an organization is in line with laid

down procedures and end results satisfy the correct standard.

QA should be external to the Project Management department

Quality Planning and Quality Control

Quality Planning & Quality Control are the responsibility of Project Management

Quality Planning establishes the objectives and requirements for quality and
lays out the overall approach, Project Quality plan and defines the stage quality
activities that are needed.

Customers quality expectations must be understood and documented prior to

the Project commencing. In the Project Initiation document, the quality
approach for the Project is defined in the Quality Plan.

Quality Control ensures that Projects meet the quality criteria specified

Quality Control is about measuring/testing end products to ensure they meet

the required standards. Takes place after some work has been done.

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Prince2 COMPONENTS: Controls: Configuration Management

A configuration is a logically related set of products that need to be managed as

a composite set.

In Project Management, the configuration to be managed is the sum total of all

the equipment, documentation, instructions and information which together
represent the product/deliverables of the project. Configuration Management is
Product Control

Configuration management occurs when you order parts for your car:
configuration management enables the right part to be supplied

Configuration Management provides techniques and procedures to:

1. Identify the individual items that need to be managed; these are called
the configuration items
2. Record and monitor the current status of each configuration item as its
development proceeds
3. File all the documentation produced during the products life cycle
4. Distribute record and control all the circulation of all the copies of project
documentation
5. Manage product issues raised during the project
6. Manage changes to all the configuration items

In Prince2, configuration management is mandatory - its critical for successful

project management. All products are controlled using an appropriate
configuration management method, which allows for a way for creating, editing
and deleting configuration items, identifying their owners and auditing the
validity of configuration information (via a coding or referencing system).
Configuration Management consists of 5 basic functions:
1. Planning: Deciding the level at which products need to be controlled and
deciding how that control is exercised
2. Identification: Where all the sub products making up the final products
are specified and identified
3. Control: Whereby configuration items are frozen once the specification is
agreed. Changes can only be made with the agreement of the
appropriate named authorities
4. Status Accounting: the recording and reporting of all current and
historical data to do with the product
5. Verification: a series of reviews and audits that the information in the
configuration management system coincides with the actual status of the
products themselves

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Prince2 COMPONENTS: Controls: Change Control

Change Control is closely linked to Configuration Management. Change is

inevitable in virtually all projects. Changes to specification or scope can greatly
risk a project.

Control of change means an assessment of their impact, their importance, their

costs and a decision as to whether they should be authorised.

Prince2 treats all potential changes to the Projects products as project issues.

One of the considerations of Project Initiation is deciding who can authorise

changes, at what level and how changes will be funded

In a Project with few anticipated changes, the Project Board can nominate itself
as the only Change Authority. In more complex environments where there may
be many change requests of varying complexity, the Project Board may
delegate the consideration of changes to another body called the Change
Authority, who will work to a budget and within previously agreed tolerances.

Changes and the project issues they generate should be viewed not in isolation,
but should be viewed against the benefits they offer and the impacts on the
original business case. Each project issue must be considered against the Risk
Log: will the change impact an existing risk or create a new risk?

If a Project exists as part of a Programme, then the impact of the change needs
to be considered as how it may impact the Programme as a whole.

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Prince2 PROCESSES: Introduction

A process is any operation(s) that transforms something into something

elsei.e. changes inputs into outputs.

The Processes in Prince2 are Management Processes, having both input and
outputs. Inputs for are information and requests, outputs are updated
information and decisions/approvals.

The ISO9000 standard requires that all major processes be documented in a

companys quality manual. Prince2 sits comfortably in an ISO system as it
documents a Project Management method.
The Prince2 Process Model

Each of the 8 processes in Prince2 has its own inputs and outputs, the outputs
for one processes sometimes being the inputs for another.

Corporate or Programme management is the highest level process, if somewhat

removed from day to day project management. Within a Project, the highest
level is Directing a Project.

The next 6 processes of a project divide into three basic stages:

a) beginning a project (start-up and initiating)
b) managing a project (controlling stage, managing stage boundaries
and product delivery)
c) finishing a project (closing a project)

The Planning process runs throughout a Project, providing input to the other
processes.

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Prince2 PROCESSES: Introduction: Directing

Directing a Project is the primary concern of the Project Board - it runs from
start to closedown.

The Project Board manages by exception, monitoring through reports provided

by the Project Manager and controlling via key decision points.

There are 5 sub processes in Directing a Project:

I.
II.
III.
IV.
V.

DP1
DP2
DP3
DP4
DP5

Authorising Initiation
Authorising a Project
Authorising Stage/Exception Plan
Giving Ad Hoc Direction
Confirming Project Closure

Initiation
Initiation
Stage Boundaries
Ad Hoc Direction
Project Closure

These do not cover the day to day activities of managing a Project, which rests
with the Project Manager. For example a forecast that a stage will not be
completed within tolerance levels will result in an exception report, which the
Project Manager will raise to Board level.

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Prince2 PROCESSES: SU - Starting Up a Project

The beginning of a Project is very difficult and unstructured in many cases, with
managers asked to do planning and preparation work but with minimal or no
official resources allocated.

Prince2 gives structure to this process with the SU (Starting Up) phase.

The input for starting up a project is the Project Mandate, which will often be a
memo or an informal request - this is the Project Trigger

Prince2 identifies 6 sub-processes:

Code

Process Type

SU1
SU2
SU3
SU4
SU5
SU6

Appointing Project Board Executive and Project Manager

Designing a Project Management Team
Appointing a Project Management Team
Preparing a Project Brief
Defining a Project Approach
Planning an Initiation Stage

Description

I. The main output here is the Project Brief, the aim of which should allow the
Project Board to decide if there is enough justification to warrant the expenditure
stated in the Initiation Stage plan.
II. The Project Brief should contain:
I. A Statement of the Project Scope /Definition
II. The Business Case
III. Quality Expectations
IV. The Known Risks
(any other useful relevant information should be included also)

The two other outputs of the SU phase are:

a. The Initiation Stage Plan
b. Structure for the Project Management Team (these should contain nominations
for the Board and the Project Manager)

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Prince2 PROCESSES: IP - Initiating Project Stage

The Initiating a Project Process aims to set up a firm baseline for the Project and
that everyone involved is clear what the objectives for the Project are.

The inputs for the Initiating Project process are the Outputs for the Starting Up a
Project process i.e. Initiation Stage Plan, Project Management Team Structure and
the Project Brief.

The Output is the Project Initiation Document (PID). This is used as baseline for
the Project and is used at every stage - up to and including Closure - to check
progress against original expectations.

It should include clear statements of the Project objectives, risks, business case,
project management team structure, overall project plans and detailed first stage
plans.

Prince2 identifies 6 sub-processes:

Code
IP1
IP2
IP3
IP4
IP5
IP6

Process Type

Description

Planning Quality
Planning a Project
Refining the Business case and risks
Setting up Project Controls
Setting up Project Files
Assembling a PID

The PID is assembled from products generated in starting up a project and the six
sub processes in the IP. When it is approved by the Project Board, it signifies the
official start of the Project.

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Prince2 PROCESSES: CS - Controlling a Stage Process

The Controlling a stage process forms the bulk of the Project Managers work.

Prince2 recognises 9 sub-processes in the Controlling Stage process:

Code
CS1
CS2
CS3
CS4
CS5
CS6
CS6
CS6
CS6

Process Type

Description

Authorising Work Package

Assessing Process
Capturing Project Issues
Examining Project Issues
Reviewing Stage Status
Reporting Highlights
Taking Corrective Actions
Escalating Project Issues
Receiving Completed Work Package

The sub-processes are bound into a cycle of:

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Prince2 PROCESSES: MP - Managing Product Delivery Process

The objective of Managing Product Delivery is to ensure that what was planned to
be produced during a stage is indeed produced.

Progress must be reported to the Project Manager, so that they can carry out the
Controlling Stage Process.

The MP process is carried out by the Manager of the team carrying out the work
(or an individual for small jobs).

This process has an Authorised Work Package as its input and signed off Products
and Progress Reports as its output.

Prince2 defines 3 sub-processes in the Managing Product Delivery Process:

Code

Process Type

MP1
MP2
MP3

Accepting a Work Package

Executing a Work Package
Delivering a Work Package

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Description

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Prince2 PROCESSES: SB - Managing Stage Boundaries Process

The Stages Component seeks to break down a Project into discrete and
manageable parcels of work, allowing the Project Team to focus on specific
products

By controlling the start and finish of each stage, specific attention can be given
to whether the stages products have been completed within tolerance levels,
whether the remaining products are needed and if the Business Case is still
valid. This is a key control Process of the Project Board.

The objectives of the Managing Stage boundaries process are:

1. Assure the Project Board that all Products in the current stage plan
have been completed as defined
2. Provide information needed for the Project Board to assess the
continuing viability of the Project
3. Obtain authorisation for the start of the next stage
4. Record any information/lessons learned that could be useful for
future stages

The inputs to the Process are the Progress and Exception Reports, along with
the Stage Plans.

Prince2 defines 6 sub processes in Managing Stage Boundaries:

Code
SB1
SB2
SB3
SB4
SB5
SB6

Process Type

Description

Planning a Stage
Updating a Project Plan
Updating a Project Business Case
Updating the Risk Log
Reporting Stage End
Producing an Exception Plan

The outputs for Managing Stage Boundaries are:

1.
2.
3.
4.

End Stage report

Next Stage plan
Request for Authorisation to Proceed to the next stage; or
Exception Plan

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Prince2 PROCESSES: CP - Closing a Project

Any Project needs to be finite and have a clearly defined end, otherwise it is an
operational management task.

The end of a Project arises when all the planned work is finished and the
product is delivered and signed off; alternatively there can be a premature end
to the Project because of changes to requirements, lack of resources or severe
cost blowouts, time blowouts or quality lapses.

The purpose of a Closing Project Process is to execute an orderly and controlled

end to the Project, regardless of circumstances.

The CP process is normally performed by the Project Manager; the majority of

the work is generally preparing input for the Project Board to gain their
approval that the Project may conclude.

The main Inputs are:

1. A Project Status Report
2. A Lessons Learned Report (for the Final Stage)
3. A Project Initiation Document (to provide baseline information)

Code
CP1
CP2
CP3

Prince2 defines 3 sub-processes in the Closing Project process:

Process Type

Description

De-commissioning a Project
Identifying Follow On Actions
Project Evaluation Revue

The main Outputs are:

1. An End Project Report. This Report needs to answer the questions such as:
has the project initiation document been fulfilled? Is the customer satisfied?
What ongoing maintenance will be needed? Are there any recommended
follow-up actions
2. A Lessons Learned report (for the whole project)
3. The Project Files

The Lessons Learned Report and the Project Files can provide valuable
information for similar Projects in the future.

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Prince2 PROCESSES: PL - Planning a Project

Planning underpins all the other processes.

Traditional Project Management methods start planning by assessing the activities

that will be required. Prince2 takes the angle that planning should be done by
thinking about the Products that have to be produced: what products are needed,
what quality is required? What order will they be produced?

Once the initial steps are done, a traditional Project Management approach is
acceptable to use in answering the following queries: what activities should be
done, when and by whom? How much effort will each activity take? How long will it
last? How much will it cost? What risks are involved?

Prince2 advocates planning at 3 levels:

1. Project Plans
2. Stage Plans
3. Team Plans

Prince2 defines 7 sub-processes in the Planning a Project process:

Code

Process Type

PL1
PL2
PL3
PL4
PL5
PL6
PL6

Designing a Plan
Defining and analysing Products
Identifying Activities and Dependencies
Estimating
Scheduling
Analysing Risks
Completing a Plan

Description

There are separate Inputs and Outputs corresponding to each level of Planning.

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Prince2 TECHNIQUES: Introduction

Prince2 only gives very general techniques of how to do a job.

Product Based Planning is a key approach:

In the traditional Project Management Approach, the starting point is to determine

all the activities that are needed to complete the Project. Prince2 emphasizes the
best starting point is to understand all the Products/Deliverables that the Project
must deliver.

Product Based Planning consists of 3 main steps:

1. The Production of a Product Breakdown Structure
2. A Writing Product Description
3. The Creation of Product Flow Diagrams

Prince2 defines a product as anything that is produced by or on the way through a

Project. It includes paperwork, reports and control mechanisms that are produced
during a Project, not just the final end product (i.e. new accounting system or
building).

Prince2 thus divides Products into 3 categories:

1. Management Products:
2. Quality Products:
3. Specialist Products: these are the subject of the Plan i.e. the end
products or goals of the Project

Management and Quality Products are the by-products of the process to deliver a
Specialist Product

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Prince2 TECHNIQUES: Product Breakdown Structures

The Product Breakdown structure takes a Top Down view of all the Products which
the Project is going to generate, starting off with the Final Product that the Project
is set to deliver. Then each product is broken down to its individual components in
a hierarchical structure.

The breakdown structure of a Project may look like thisthis is what all the
products will look like

But there are 3 sub products (Management, Quality and Specialist). Prince2
shows how Management Products can be segmented

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Prince2 TECHNIQUES: Product Breakdown Structures (continued)

and Prince2 shows how Quality Products can be segmented

Both branches of management and quality tend to look very similar from
Project to Project, as Prince2 specifies them regardless of size or type.

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Prince2 TECHNIQUES: Product Breakdown Structures: Specialist Products

The Specialist products will differ considerably from Project to Project: they
would be unique to each Project and represent the reason for the Projects
existence.

For example, the Specialist Product for the Channel Tunnel could look like
Channel Tunnel Rail Link Structure

The breaking down of the major products into sub products will go on until the
products are small enough for the necessary degree of day to day control given
the circumstances. Deciding at which point to stop is down to experience, good
judgement and common sense.

Once a product breakdown structure is decided on that adequately represents

what is to be created, a numbering system is employed so that each of the
products can easily and uniquely be identified. The decimal system employed
here is very common. These numbers are a very important input to the
configuration management component.

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Prince2 TECHNIQUES: Product Descriptions

The Product based approach to Planning gives the major advantage that once a
product has been identified and defined, responsibility for it can be assigned to
an individual. This is called Product Ownership.

If someone is given ownership, it is necessary that the Product be clearly

defined, how it should look and how its acceptability will be judged. A Product
Description can help here. It should also state quality expectations.

Sometimes, writing a Product description can become overly tiresome,

burdensome and time consuming. Good judgement needs to be exercised as to
what level of detail and effort is needed. Products that are new, important or
previously troublesome should be emphasized in more detail. Concentrate on
higher level products first, then drill down into more detail.

Products descriptions are NOT a replacement for detailed technical

specifications. They are higher level documents to help the planning and
production process, not an end in itself.

Prince2 recommends the main headings that should be included in the Product
Description.
1. Purpose: Why do you need this product?
2. Composition: What are the components that will make up this
product?
3. Derivation: From what is the product going to be produced or from
where obtained?
4. Format: how will the product be presented, what will it look like,
what will it do?
5. Quality Criteria: what criteria must the product meet for it to be
judged as fit for purpose?
6. Quality Method: How will the quality assessment be made?

Additionally, there ideally should be on the Product Description also be details on

the Product Manager, Product reference ID, Document and Version number
Information.

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Prince2 TECHNIQUES: Product Flow Diagrams

Once a complete understanding of the required products of a Project is created,

the next step is the sequence in which the products must be created. This is done
via a product flow diagram.

A product flow diagram uses just two symbols: a rectangle to represent the
product, and an arrow joining the rectangles to show the sequence.

Time flows from only on direction: either top to bottom or from left to right.

The starting point is the product(s) available right at the start of the Project, and
the end points is the product that is the final deliverable(s) of the Project.
Channel Tunnel: Approval to Proceed Product Flow Diagram

Approval to Proceed is a Management Product.

Each of the arrows represents a transformation from one product to another.

The diagram shows the link between product based planning and activity based
planning.

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Prince2 TECHNIQUES: Change Control Approach

Most large organizations have existing change control procedures and forms:
provided they satisfy the basic requirements of Prince2, they can be used in a
Project.

Under Prince2, all changes are treated as types of Project Issues, and are
handled through the same change control approach. i.e. A request to change
requirements or to improve a product. This is known as Request for Change.

A failure (actual or expected) to meet a specified requirement is known as an

Off-Specification.

Any questions that arise on any Project topic can be raised as a Project Issue.

Whatever the type, every Project Issue is sent to the Project Manager and
recorded in an Issue Log. A unique number is allocated, the author, date and
type of issue are recorded. The author should also include a priority rating for
the issue. Any Project Issues which are questions or based on
misunderstandings should be answered directly, a reply sent to the author, filed
and the Issue Log updated.

Remaining issues should be subjected to an Impact Analysis that will look at:
1.
2.
3.
4.

What
What
What
What

will change?
effort/resources will be needed?
is the impact on the business case?
are the risks due to the proposed change?

The Project Manager decides which Requests for Change - if any - should be
implemented in the current stage plan.

In all cases, there should be discussions with the Senior User and Senior
Supplier. Without the approval of the Project Board, the Project Manager should
not authorise any work that changes the Product that has already been
approved by the Board.

In the case of Off Specification, the Project Manager should try to resolve the
situation within predefined tolerance limits. If this is not possible, then
Exception procedures must be followed and the Project Boards decision must
be sought.

If the Project Board decides to accept the Off Specification without correction,
this is known as a Concession.

However, if the Project is part of a Programme, neither the Project Manager or

the Project Board may be able to accurately judge the impact of changes of
their Project on other Projects in the Programme.

To deal with this, there are two strategies. Firstly, one can ensure all changes
must be screened at Programme level initially, to assess where the decision on change
must be made. Alternatively, a representative from Programme Management can be
made part of the Projects change control authorisation loop.

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Prince2 TECHNIQUES: Quality Review

A Quality Review is where a team of qualified people meet for the key purpose
of checking a complete product for errors. A quality review can be invoked at
any point during a Project - as any Product can be subject to a review.

The Quality Review technique has close ties to the Planning, Managing Product
Delivery and Controlling Stage processes.

Among the main benefits a Quality Review are a structured and organized
approach to the examination of subjective quality criteria and the early
identification of defects.

The objectives of a Quality Review are:

1.
2.
3.
4.

To ensure a Product Meets Business, User and Specialist Requirements

To assess the conformity of a Product against pre-defined criteria
To provide a platform for Product Improvement
To involve all those with a vested interest in the Product and promote
Product Ownership
5. Provide a mechanism for monitoring and control of progress

There are 3 basic steps in the Quality Review Procedure:

1. Preparation: Confirm when, where the meeting will take place and who
will attend (issue invitations); if possible, send out a copy of the Product
for review; assess the Product against quality criteria; produce an error
list to send to the producer.
2. The Review Meeting: Should consist of discussion and clarification of
major errors; agreement on appropriate follow up actions; agreement on
quality review outcomes; signoff on the product (if appropriate);
documentation of actions and responsibilities;
The results of a Quality Review are normally 1 of 3 outcomes. The first is
the Product is error free and can be signed off at the meeting. The
second is that the Product contains minor errors which can corrected
easily and signoff can be done without further review. The third is that
errors are so serious is that the Product will have to be reviewed again
after the errors are corrected.
3. Follow-Up: This involves notifying the Team Manager of the Quality
Review results; planning any remedial work required and finally signing
off the Product after the remedial work is properly done.

1. There is actually a 4th step, but it is carried out as part of the Planning Process.
This is Planning the Quality Review; it involves identifying the Products to be
reviewed, who will be the people doing the reviewing and the time scales are
allocated.

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Prince2 TECHNIQUES: Quality Review

2. The people who are normally involved in Quality Review meeting are:
1. The Producer: usually the creator/author of the Product being reviewed
2. The Review Chair: sets the agenda, ensures the meeting is properly
organized, controls the meeting, and provides the final signoff of the
product. The Review Chair is often the Producers Line Manager, The
Project Manager, or some other competent person with authority.
3. The Reviewers: Must be competent to assess the product from various
specialist viewpoints.
4. The Scribe: To take notes/minutes and agreed actions arising from the
meeting.
Also, representatives from Project Support, Project Assurance and Quality
Assurance will also often take part, to provides administrative support and
ensure compliance with Project and Corporate quality standards.
3. The Quality Review process exists to find errors in Products produced by people
- sometimes people who may be present at the meeting. The scope for conflict
is huge, at the expense of objectivity. Keep in mind:
1. The Quality Review process is about the identification and
agreement of defects, NOT solutions.
2. Identify defects in the Product, NOT the Producer - do not
personalize
3. There must be preparation for the meeting by all, and pressure
to do the same
4. Managers must NOT attend a QR meeting in a people
management capacity; it creates conflict and may make people
overly defense. The Chairman MUST NOT act as a Reviewer,
otherwise the role becomes too complex.
5. In an informal quality review, the Producer can be the Scribe
6. Checklists are needed.

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Prince2 TECHNIQUES: Project Filing: Introduction

Project Filing is the final technique in Prince2: there is no compunction to follow

Prince2 in this respect, but it is a good system and should be considered. It is
tied in with the configuration management system.

Prince2 suggests the maintenance of 3 types of files:

1. Management File: further subdivided into the Project File and Stage Files
(one for each stage). These files contain all the documents used to
manage the Project at the relevant levels. Organization charts, plans and
control reports are included here.
2. Specialist File: containing all the Configuration Items on the Project.
3. Quality File: intended to permit an audit at any time on the work that has
been done and to confirm adherence to quality standards. All Product
Descriptions and Product Issues are held here.

Further recommendations are provided next as to what should be in each file

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Prince2 TECHNIQUES: Project Filing: Project File

The Project File should ideally contain

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Prince2 TECHNIQUES: Project Filing: Stage File

The Stage File should ideally contain

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Prince2 TECHNIQUES: Project Filing: Specialist File

The Specialist File should ideally contain

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Prince2 TECHNIQUES: Project Filing: Quality File

The Quality File should ideally contain

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