Chapter 1 Introduction
Chapter 1 Introduction
INTRODUCTION
Managing Successful Projects with PRINCE2
CHAPTER 1
Chapter 1 - Introduction
INTRODUCTION
1.1 Introduction
PRINCE2 is one of the most widely used methods for managing projects in the world. It is a structured
project management method that uses the experience gained from thousands of projects, as well as
contributions from countless project sponsors, project managers, project teams, academics, trainers,
and consultants.
PRINCE2 has been designed to be adaptable so that it can be applied to any project, regardless of the
project’s purpose, scale, type, organization, geography, or culture. This is achieved by:
● separating the management of the project from the specialist development activities, such as design
or construction, allowing any specialist activities to be integrated into a controlled environment for
the project
● focusing on what needs to be done to manage the project, rather than prescribing how work is done
● requiring that the method is established specifically for the needs and context of the project by the
way it is applied and tailored.
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Introduction
The official book aims to address some questions frequently asked by those directly involved in project
management or in support or other related roles. These questions include:
● What is expected of me, and what should I expect from others on the project?
Chapter 1 - Introduction
● What project decisions am I expected to make?
● What information do I need to supply, and what information should I receive?
● What should I do if things do not go to plan?
● Who should I look to for support or for direction?
● How can we apply and tailor the use of PRINCE2 for our project?
It is not intended (or possible) for PRINCE2 to cover every aspect of project management. There are two
broad topics that are deliberately considered to be outside the scope of PRINCE2: specialist aspects of
project work and detailed project management techniques.
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Managing Successful Projects with PRINCE2
Project
context
Chapter 1 - Introduction
Principles
Appendix A provides a summary of management products (such as the business case) used in the
practices and processes. Appendix B provides a summary of PRINCE2 roles. The glossary summarizes
the PRINCE2 defined terms that are used throughout the official book. Throughout this official book, we
refer to the organization that commissions the project as the ‘business’.
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Introduction
Key message
Chapter 1 - Introduction
The five integrated elements of the PRINCE2 method are designed to work together. The
practices ensure that the principles are continually applied during the processes in a way that
is specific to the project context and consider the relationships and requirements of people
within the project team and those outside the project team.
As the pace of change accelerates (whether technological, business, social, or regulatory), and the need
to adapt becomes more evident, the focus of management attention is inevitably moving to achieve a
balance between business as usual and business change. Projects are a means by which we introduce
change, and although many of the skills required are the same, there are some crucial differences
between managing business as usual and managing project work.
Definition: Project
A temporary organization that is created for the purpose of delivering one or more business
products according to an agreed business case.
There are five characteristics of a project that distinguish it from business as usual:
● Change Projects are the means by which we introduce change.
● Temporary Projects are temporary in nature. When the desired change has been implemented,
business as usual resumes (in its new form), and the need for the project is removed. As projects are
temporary, they should therefore have a defined start and a defined end.
● Cross-functional A project involves a team of people with different skills working together on a
temporary basis to introduce a change that will impact others outside the team. Projects often work
across the usual functional divisions within an organization and sometimes span different
organizations. This frequently causes stresses and strains both within and between organizations
(for example, between customers and suppliers). Each has a different perspective and motivation for
getting involved in the project.
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Managing Successful Projects with PRINCE2
● Unique Every project is unique. An organization may undertake many similar projects and establish
a familiar, proven pattern of project activity, but each one will differ in a certain way. This can mean a
different team, customer, supplier, product, location, or timeframe. All these factors combine to
Chapter 1 - Introduction
Projects vary greatly. For example, an organization might undertake an IT project to improve the
systems required to manage its business. Another organization might undertake a clinical research
project to bring a new drug to market, and another organization might be building a new facility.
Furthermore, the environment within which the project is being managed may influence how it is
started, delivered, assured, and closed. There may be factors external to the project itself, such as
organizational standards, the maturity of the organization, and regulatory frameworks and factors
specific to the individual project, such as the industry sector and the geographical locations. PRINCE2 is
designed to work for all types of projects in any project environment.
The five characteristics of a project (1.3) can result in some typical challenges such as:
● ambiguity regarding who is responsible for what aspects of the project, leading to confusion and a
lack of accountability
● ambiguity or conflict regarding what the project will deliver, costs, and when
● unrealistic expectations regarding what the project will deliver, costs, and when
● unavailability of resources or reassigning resources to business as usual activities over project work
● difficulty in estimating effort, durations, and costs for project work
● uncontrolled change (sometimes referred to as scope creep)
● difficulty keeping the project management team and stakeholders informed, engaged, and motivated
during the project lifecycle.
The purpose of project management is to address these challenges by reducing and managing
ambiguity. This is achieved by uniting the involved parties to clarify objectives and working practices.
The aim is to control the specialist work needed to create the products required of the project. Project
management involves the planning, delegating, monitoring, and control of all aspects of the project and
the motivation of those involved to achieve the project objectives within expected performance targets.
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Introduction
Chapter 1 - Introduction
The project’s performance target sets the expected success level against which the
management of the project will be judged. PRINCE2 includes performance targets for
benefits, cost, time, quality, scope, sustainability, and risk.
Priorities can be established by agreeing on the project’s performance targets. For example, an urgent
project may place more importance on time than on other performance targets, such as costs. PRINCE2
helps with setting such priorities by allowing a range to be specified for each performance target in the
form of tolerances (see section 2.4). Some performance targets may have a narrow tolerance, yet others
may have a broader tolerance. The agreement of performance targets and their tolerances is a
prerequisite for exploring options and determining the project approach.
All seven project performance targets and their tolerances are used throughout the PRINCE2 method
as the basis for control.
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Managing Successful Projects with PRINCE2
The PRINCE2 method does not assume any specific organizational context. There may be users who
specify the desired outputs (referred to as products in PRINCE2), suppliers who will provide the
resources and expertise to deliver the products, and business decision-makers who will ensure that the
project investment can be justified and remains justified through the project lifecycle. The PRINCE2
method does not require any specific organizational relationships between the users, suppliers, and
business decision-makers for the project. The users, suppliers, and business decision-makers may all
come from the same organization, or they may be in separate organizations with commercial
agreements between them.
Within the PRINCE2 method, the business decision-makers come from the organization that
commissions the project. The decision-making will be made within the context of the business strategy,
objectives, and policies of the organization.
Definitions
Business The organization that provides the project mandate and the structure within which
the project is governed. Any use of the term ‘business’ within this book specifically refers to
this organization.
User The organization that will use the project products to enable it to gain the expected
benefits. They may be internal or external to the business organization.
Supplier The organization that provides the expertise, people, and resources required to
deliver the products required by the project. They may be internal or external to the business
organization.
Customer Where there is a commercial relationship between the business and the supplier,
the business is regarded as the customer.
The project may be part of a programme or portfolio structure, or it may be a standalone project
reporting to the business unit’s management structure, as illustrated in figure 1.2.
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Introduction
Business
Chapter 1 - Introduction
Portfolio
Programme Programme
Further guidance on programme management and portfolio management can be found in the
companion guides Managing Successful Programmes and Management of Portfolios.
The business is also responsible for realizing any benefits after the completion of the project (see
section 5.3.1.4).
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Managing Successful Projects with PRINCE2
The delivery method is the way in which the work of the project is to be delivered. The project may rely
on one or more delivery methods to create the required products. Typical delivery methods include:
● Linear-sequential approach Each of the delivery steps to create the products occurs in sequence,
and the product is made available during or at the end of the project (for example, in a construction
project where requirements gathering and design occur before construction starts).
● Iterative-incremental approach This approach is often, but not exclusively, used for product
development, where requirements gathering, design, development and/or coding, and testing occur
iteratively throughout the lifecycle of the project. This approach is often referred to as an agile
approach.
● Hybrid approach Some elements of the project use a linear-sequential approach, and other
elements use an iterative-incremental approach. For example, a linear-sequential approach can be
used for the development of the infrastructure for a service. Then, an iterative-incremental approach
can be used for the development of the customer service portal for users to access the service.
PRINCE2 provides the controlled environment for specialist delivery methods. It does not assume or
require any specific delivery method. Any approach can be used through the separation of the
management of the project and specialist work to produce the project products. Detailed and
complementary guidance on working on iterative-incremental projects using PRINCE2 can be found in
the PRINCE2 Agile official book.
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Introduction
SUSTAINABLE
DEVELOPMENT G ALS
Chapter 1 - Introduction
NO ZERO GOOD HEALTH QUALITY GENDER CLEAN WATER
1 POVERTY 2 HUNGER 3 AND WELL-BEING 4 EDUCATION 5 EQUALITY 6 AND SANITATION
7
AFFORDABLE AND
CLEAN ENERGY 8
DECENT WORK AND
ECONOMIC GROWTH 9
INDUSTRY,
INNOVATION, AND
INFRASTRUCTURE
10
REDUCED
INEQUALITIES 11
SUSTAINABLE
CITIES AND
COMMUNITIES
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
1.5.5 Scale
The PRINCE2 method is flexible, so it can be simplified for small or simple projects or expanded for
large or complex projects to ensure thoroughness.
The perceived scale of a project is relative to the organization. What is considered a small project in a
large multinational enterprise could be bigger than what is considered a large project in a small
organization. It is usually more helpful to think of projects in terms of simple rather than small and
complex rather than large. Generally, it is a case of how the business perceives the risk and the
importance of the project, relative to its business as usual operations.
PRINCE2 can be tailored to the scale of the project via the:
● governance arrangements between the business layer, the project board, the project manager, and
the teams
● choice of which project roles are appointed to individuals from the user, business, and supplier
organizations (for example, combining roles in simple projects and dividing roles in complex projects)
● formality and level of detail of project documentation (in PRINCE2 these are referred to as
management products)
● formality of the project controls (for example, frequency of reporting and reviewing)
● selection and integration of the management approaches, such as a commercial management or
change management approach
● number of stages and work packages the project is divided into
● setting of the project performance targets and their tolerances.
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Managing Successful Projects with PRINCE2
As PRINCE2 is flexible and based on proven principles, organizations adopting the method as a
standard can substantially improve their organizational capability and maturity across multiple areas of
business activity, such as business change, construction, IT, mergers and acquisitions, research, and
product development.
In addition to being an established method and qualification used worldwide, PRINCE2 has the following
benefits:
● Proven based on established and proven practice and governance for project management
● Universal can be applied to any project, of any scale, and easily implemented alongside specialist,
industry-specific models (such as engineering models or development lifecycles)
● Flexible can be tailored to meet the specific needs of the organizations involved
● Common language and concepts widely recognized and provides a common vocabulary for all
participants, which encourages consistency and the ability to reuse project assets, facilitate staff
mobility, and reduce the impact of personnel changes or handovers
● Outcome-focused ensures that project participants focus on the viability of the project in relation
to its business case objectives, rather than simply seeing the completion of the project as an end in
itself, which ensures that stakeholders (including sponsors and resource providers) are properly
represented in planning and decision-making
● Increased organizational maturity promotes learning from project experience and continual
improvement in organizations
● Part of an integrated suite of methods designed to work with other PeopleCert guides on
programme management, portfolio management and risk management.
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Introduction
Chapter 1 - Introduction
data through advanced data analytics solutions. By analysing the wants, needs,
desires, and frustrations of social media users, Data Knowledge can transform
raw and unstructured data into reliable predictions that enable organizations
to utilize consumer behaviours and insights.
However, they have not been as effective in using data to their own advantage, now that the
company has over 300 staff. In fact, the head of the data science division raised concerns in the
last senior leadership team meeting. The concerns were regarding the lack of visibility of who is
working on what projects, poor capacity planning, and claims of an overworked team with low
morale due to the constant juggling of commitments and firefighting issues.
As a way of addressing this, the data science division has been authorized to start a project to
develop a time-recording solution and a set of reports on project and task assignments along
with resource utilization and capacity planning. The reports are expected to offer interactive and
real-time insights that can enable data-driven decisions around the utilization and planning of
resources.
Data Knowledge has a defined framework for the management of projects. This is expected to be
a simple business change project, taking no more than three months in the current financial year
to complete.
Since Data Knowledge has in-house data analysis and app development capabilities as well as
clear requirements for this project, the project will be led by the head of data science. They will
work with the development division in an iterative and incremental approach. This is to ensure
that the solution can be deployed quickly to several new projects and enhanced during its roll-out
to the rest of the business.
The high-level project plan is as follows:
Stage 1 (initiation)
● product backlog
● minimum viable product definition
Stage 2
● timebox 1
● prototype of time-recording application
● mock-up of resource management reports
● timebox 2
● first release of time-recording application and reports (must-have features)
● pilot
● timebox 3
● enhancements following pilot
● timebox 4
● demonstration
● roll-out Scenario continues
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Managing Successful Projects with PRINCE2
Stage 3
● product backlog (following roll-out)
Chapter 1 - Introduction
● closure.
The main output from the project is to be a time-recording application and set of resource
management reports available to all business units.
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Introduction
Chapter 1 - Introduction
Louistown is a historical town which is home to over 40,000 residents and
attracts over 20,000 visitors per year. The city council has been criticized for the
lack of investment and modernization of the town centre.
They have recently decided to improve the vibrancy of the area and offer
increased opportunities for business by approving the funds for the ‘Louistown is Open for Business’
(LOB) portfolio. This is an ambitious portfolio of projects covering the next five-year plan cycle.
A new shopping centre, provisionally named ‘LouisShopping’, is seen as a key project within this
portfolio. This is a complex infrastructure project due to the:
● location of the building and historical nature of the surrounding buildings
● requirement for the design to be consistent with the environment while offering modern
facilities supported by the latest technology
● need to include underground parking space
● importance of minimizing disruption to residents and businesses during the construction works
● recent award of ‘green town’ status to Louistown, and the sustainability requirements this will
impose on the development.
Due to the nature of the work, in which just the construction element is likely to span over two
financial years, the council has approved the strategic business case, the initial high-level project
plan and has appointed BuildyBrick as the main contractor. They have established a requirement
for a traditional delivery method in line with their standard approach to projects. The general
view is that this project is long overdue, and the council would like ‘LouisShopping’ to be open to
the public by the end of financial year three.
The project has just completed the initiation stage and commenced the first delivery stage
(stage 2). The high-level project plan is as follows:
Stage 1 (initiation)
● strategic business case and high-level project plan approval
● appoint contractor
Stage 2
● design
Stage 3
● site preparation
● utilities and systems
● construction
Stage 4
● testing
● inspections
Stage 5
● demobilization.
The main output from the project is a shopping centre constructed and ready to open to the public.
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Managing Successful Projects with PRINCE2
Scenario 3: Findef
Findef was formed eight years ago with the promise to revolutionize how
Chapter 1 - Introduction
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Introduction
Chapter 1 - Introduction
● iterative-incremental development and soft launch of products 2 and 3 to minimum viable
products (MVP)
The main output from the project will be three products ready for full launch and transferred to
BAU for operations and maintenance.
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Managing Successful Projects with PRINCE2
Scenario 4: NowByou
NowByou is a not-for-profit organization that works with local communities to
Chapter 1 - Introduction
eliminate discrimination of any kind and help advance the international human
rights system through local and targeted interventions.
NowByou forms, chairs, and equips networking and support groups, where
anyone who has experienced discrimination can share their experiences and thoughts in a safe
and empowering space. Additionally, NowByou is one of the few non-governmental organizations
(NGOs) in the country that works directly with police forces to co-develop campaigns that
encourage the reporting of discriminatory incidents to authorities.
Recent research has shown that discrimination against marginalized groups, particularly the
homeless and refugees, is growing at a concerning rate. The increase in discrimination has led
NowByou to believe that a new six-month campaign is required to address this issue.
They have decided to run the campaign as a project, aiming to both raise awareness of this type
of discrimination and reinforce their own brand recognition (as NowByou is highly dependent on
the goodwill of donors and financial aid from partners).
The project management maturity of the organization is very low, with no standardized processes
or templates in place. For that reason, NowByou has contacted a professional project manager
with a track record of successful delivery in the not-for-profit sector who will be responsible for:
● developing the initial project management documentation
● advising and coaching the NowByou director of campaigns, who is sponsoring the project
● mentoring the staff member who will be appointed as project manager
● advise the project team how to use a variety of media (tv, press, and social networks) for this,
and other future projects.
There is a high-level view of the project, but this is to be confirmed, as pre-project discussions are
still occurring:
Stage 1 (initiation)
● business case
● project initiation documentation
Stage 2
● campaign high-level requirements gathering
● options analysis
Stage 3
● implementation of chosen option(s)
● closure.
The main output from the project will be a delivered multi-channel campaign.
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