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PRINCE2 Analysis

Analysis of PRINCE2 Methodology

Aims and objectives:

This report aims to explore PRINCE2. A description of the methodology considering its past and present as well as the internal areas of PRINCE2 is provided. Following the description is an analysis of the methodology; considering its positives and negatives. Next, suggestions for where the methodology may be best applied, and where it may be avoided. Finally, there is a discussion on how the methodology may be improved or adapted.

A description of the methodology:

PRINCE2 is an update to the original PRINCE. PRINCE was developed from PROMPTII, a Project Management method created by Simpact Systems Ltd in 1975; PROMPTII was adopted by CCTA in 1979 as the standard to be used for all government projects. The OGC continued to develop and improve PRINCE; to make the methodology more effective. This was achieved by the collaboration of user experiences, numerous projects, project managers and project teams; considering their successes and failures. PRINCE2 is described as a de facto standard; this is because it is used throughout the UK government departments for projects and is widely recognised and used in the private sector, both in the UK and internationally.

PRINCE2 can be split into three areas: Principles (see appendix 1), these are the underlying PRINCE2 laws; Processes (see appendix 2), these are the PRINCE2 project stages; and Themes (see appendix 4), these are the important PRINCE2 documents.

PRINCE2 has a process based approach. This approach describes the various processes; explaining to management what has to be done by suggesting how to bring together the raw materials to achieve project success.

The first process ensures that the prerequisites for initiating the project are in place. This is crucial because it ensures that the project has a solid purpose and is feasible, it involves determining, do we have a viable and worthwhile project?

Having established the purpose of the project and if it is feasible the next stage is initiating a project. This stage delivers the plan of the project. It is argued that the planning stage is the most important stage of the project; this is because a logical path of the project can be determined, and risks can be considered and planned for as well as resources. This point seems very reasonable, however too much time spent on planning can hinder a project, potentially preventing it from starting or delaying the project completion date.

Governing the project is the directing a project process. This process involves authorising funds, committing resources and communicating with internal and external parties. This process would be defined as governing the project, more precisely, this stage does not cover the day-to-day activities of the project manager, but this stage is required to enhance the project manager’s effectiveness; this would be through consultation.

After the project has been initiated, the next stage is the controlling stage. This is where the plans begin to unfold. During this stage, careful monitoring is recommended due to potential project deviations.

Managing Product Delivery is another important PRINCE2 process; this is because it defines the required amount of work for a set period of time and splits it into work packages, which improves efficiency.

The managing a stage boundary process confirms to the project board that products to be produced in the current stage plan have been delivered, it is also useful for monitoring and controlling the project, as well as evaluating current progress and identifying any problems.

The closing a project process is described as important because as well as a controlled start, every project needs a controlled ending. This should include disbanding resources and measuring project success when the objectives have been met.

An analysis of the methodology:

The PRINCE2 process model breaks down the project into distinct management units. Each process is specified with its key inputs and outputs, with specific goals and activities to be carried out, this provides automatic control over any deviations from the plan. This automatic management allows the methodology to provide a controlled start, middle and end; by providing directions on what to do during certain stages, overall this removes management confusion. This control allows management to: decide the order of the delivery of products; group the products into logical sets; and assign decision making points for reviews. By doing this, management is able to assign a logical progression path.

The process model that PRINCE2 encompasses creates a variety of business benefits. PRINCE2 allows the project to acquire and keep the benefits which are the underlying reasons for undertaking the project. These benefits include: financial benefits such as profit and avoidance of costs; strategic benefits, which help the organisation to progress towards their strategic aims; legislative, this is by making it clear the requirements of higher management or the government.

Organisations seek order and routine, but this contrasts projects because they are unique. PRINCE2 considers the best performing management environment for every single project; meaning each project will have a different management environment. PRINCE2 reduces uncertainty by providing a structured approach in terms of processes, standards, templates and tools. The standardisation improves efficiency because by sharing a standardised approach, documents and vocabulary; this allows the people involved in the project to communicate more effectively. The standardisation makes PRINCE2 applicable to all industries and project sizes. This then makes tailoring the methodology even more useful because it is initially applicable to all projects, but PRINCE2 can then be precisely amended to run even more efficiently and effectively.

Due to the methodology being applicable to all types of projects, it is particularly useful that the methodology is publicly available; this also allows businesses to easily obtain the methodology and prevents businesses having to develop their own methodology.

However, even though PRINCE2 is applicable to all sizes of projects, PRINCE2 has been determined by some as inappropriate for very small projects; due to the amount of administration required. Others contrasts this point describing this perception as being a misunderstanding due to a lack of knowledge of understanding how to tailor the methodology. This lack of knowledge may also be responsible for something known as PINO this is where projects mainly fail because the methodology has been incorrectly applied. These further failures in projects that utilise the PRINCE2 methodology may provide negative statistics, but similarly to how some suggest PRINCE2 is inappropriate for small projects, and practitioners create projects that suffer from PINO, as others suggest, it is the lack of knowledge and understanding of how to tailor the methodology that leads to these negatives perceptions and results.

Another important point to consider is that PRINCE2 is a method not a cure, meaning people who utilise the methodology should still continue to think because problems inevitably remain an issue. PRINCE2 is a methodology for projects not people, PRINCE2 can not be used to solve problems that involve human resource issues or dealing with upwards management. Also, PRINCE2 is a project management template, however the real world is not so static and predictable, so it is reasonable to use PRINCE2 as the framework of the project but initiative is still required for success.

PRINCE2’s structured approach is associated with benefits including control. However, projects are about change. Projects are always unique and they involve uncertainty, to succeed, initiative and flexibility is required. However, PRINCE2 is restricted to being a rigid framework, and it may be argued that this inflexibility limits the ability of the organisation in being able to deal with the continually changing environment.

The structured approach encompasses different review stages; this is to provide further control. However, too many approval gateways can create further problems, rather than increase probability of success. This is because there is a sense of pressure during these periods, and it may be determined that too many reviews utilise an unnecessary amount of time and resources.

Overall, PRINCE2 may not be the best methodology in certain cases, but it is the most widely used and available and it is not difficult to learn. This makes it easily obtainable. As well as this, the methodology is widely used in the public and private sectors so clearly it works and its benefits are being achieved by a wide variety of businesses. In comparison to other methodologies, the main advantage is that PRINCE2 can (no matter how efficiently or effectively) be applied to all projects, unlike methodologies such as DSDM, which is only applicable to IT projects, or methodologies such as APMBoK which define what should be done – but not how that should be done; which to the novice project manager, may be oblivious to how to achieve the desirable results leading to successful project management. At least PRINCE2 provides a pathway to undertaking any project.

Examples of where the methodology may be best applied, and where it should not be used, if appropriate:

There is much debate about the flexibility of PRINCE2 and what type of projects it suits, as previously provided, some argue against the flexibility and usability of the methodology mainly towards the use for small projects, whereas others provide positive views on the methodology – the opinion that PRINCE2 is a scalable, flexible project management methodology will be favoured contrast to the negative opinions because as a standard methodology the negative opinions are correct, however the methodology should be tailored to each project; shortening or integrating project stages and reducing or integrating paperwork – further tailoring can be applied depending on people involved, project size and complexity. This allows the methodology the adaptability to be applied to any project.

PRINCE2 is used by the UK government in projects including healthcare, finance, construction and IT. These are some of the largest projects carried out by the government, and show the methodology provides benefits when utilised. When put into perspective, PRINCE2 could benefit departments such as finance or IT by its standardisation; this would allow different departments to work together by using a standard language to convey ideas and standard documents to report and share information. This is important because specialists in one particular field develop their own specialist language, and two specialists from different backgrounds may find it difficult to communicate, so the PRINCE2 standardised format breaks down this barrier of communication.

Construction and IT can involve very large projects, and in these types of projects a large degree of control is needed. It would be beneficial for the project manager to utilise the PRINCE2 methodology for this type of project, as all aspects of the project can be monitored and controlled.

Even small human resource projects, perhaps recruitment and selection for a small business would still be benefitted by PRINCE2. This is because: it would provide a structure to the whole process; it can be tailored down to an appropriate sized methodology; it increases efficiency by keeping the project manager on course with a schedule, rather than being lost in a confusion of what to do; and it would also save the project manager money and time by preventing them from having to learn from trial and error.

Suggestions for how the methodology might be improved or adapted:

It has been suggested that PRINCE2 is predominantly suited to large projects, this is because the whole methodology is engineered for control and the amount of control PRINCE2 creates is very beneficial for large projects but the amount of paperwork this involves makes it inappropriate for small projects. Others have disagreed with this, suggesting that the methodology is tailorable. However, overall the methodology can be quite inconvenient; especially when considering the amount of paperwork, rigidity of the methodology and the frequent number of approval gateways – this is all time consuming. A cure to this issue would involve putting project plans in a graphical format. Initially, it may appear difficult to compile all the required information into a compact graphical format, but there is a method that can be integrated into PRINCE2 to facilitate this process.

Project on a page is a method that compresses a vast amount of information into one page. This may be a solution to some of the administrative issues and gateway review issues. The method solves these problems by including the most important information on the page; this is then distributed to the project team and stakeholders to review the current status of the project. However, there is an issue with confidentiality; if there was one document created to provide information useful to all departments, there may be an issue with sharing financial information or employee performance to all recipients. This issue can be resolved by either creating multiple project on a page documents; suited to different groups or departments, or provide the project on a page document on the internet with security; allowing groups to see only the relevant information. Providing the document on the internet would provide another bonus of being able to discover more information if required; through hyperlinks.

It may be useful to cut down the administration, but it would still be important to maintain quality. This would firstly be achieved by following the PRINCE2 methodology which recommends creating the product checklist. However this does not have to be a basic list, this can be as in-depth as desired; depending on the importance of meeting the projects outcomes, how static the project outcomes are and the amount of quality that is required from the end product.

PRINCE2 may also be adapted according to risk. It is recommended to implement an effective risk strategy as well as a contingency plan. However, a rigid risk strategy is potentially dangerous because a project stage that involves a small amount of risk may find it inappropriate, and a high risk stage may find it lacking depth. So it can be concluded that an effective risk strategy would be flexible according to risk probabilities, impact and priority of the stage.

Conclusion

It can be concluded from the findings above that PRINCE2 is an effective methodology; this is because of its structure, enabling a plan of a project which allows control. Following the standard framework is not enough for project success; the methodology needs to be tailored to the specific project’s elements and business strategy to be efficient and effective. Further, PRINCE2 does not encompass every aspect of a project that is required for success, elements that are not part of the methodology include: leadership skills; interpersonal skills; and human resource management skills. PRINCE2 is a methodology for projects not for people, so it is still important to utilise past experiences and be assertive when undertaking a PRINCE2 project. So, to have a successful project that utilises the PRINCE2 methodology, there must be a successful combination of effective tailoring, effective practice of skills acquired from experience, and effective interpersonal skills; these are all required for the successful PRINCE2 project.

Appendix 1

PRINCE2 has seven principles, these are:

1

Continued business justification – this is important because the project should be driven by its business case, it should be regularly checked against the business case to maintain direction, Bentley (2009; 10) states that “justification may change, but must remain valid”, if the projects purpose no longer fits the business case the project must be terminated (OGC, 2005).

2

Learn from experience – this principle encompasses the PRINCE2 lessons learned document (OGC, 2009b), this principle involves stating problems that have happened preventing those problems from recurring again in the future.

3

Defined roles and responsibilities – projects require creating a “temporary organisation” (Bentley, 2009; 10) so it is important to make everyone aware of their roles and responsibilities to quickly enable effective project communication, if this is not quickly enabled the project could quickly fail from a breakdown in communication.

4

Manage by stages – PRINCE2 divides the project into stages, this is important to help the overall management of the project and to provide key points for meetings regarding the project.

5

Manage by exception – PRINCE2 provides a certain amount of freedom to each management level, it does this by providing tolerances, these allow each descending line of management a restricted boundary to which it can operate, tolerances include time, cost, quantity, scope, risk and benefit; focus on products – products are the key element in PRINCE2 this is because the end result involves satisfying the customer by providing them with a product they are happy with, to do that throughout each stage of the project there should be consideration for quality and the end product.

6

Focus on products, this means the product should be considered throughout the project. It is important not to lose focus of the end result.

7

Tailor to suit the project environment, to effectively utilise PRINCE2 the methodology should be tailored to suit the project size, risk, complexity, importance and capability of the people involved.

Appendix 2

PRINCE2 processes, these are:

1

Starting Up a Project (SU) this defines and authorizes the project, it ensures the prerequisites for initiating the project are in place, this is important to allow successful progression to the proceeding stage, this stage asks the question “do we have a viable and worthwhile project?” this is important to know to prevent starting a project that will provide little benefit.

2

Initiating a Project (IP) the purpose of this stage is to plan the project and confirm the necessary controls are in place to deliver the project successfully, this is important to establish solid foundations for the project and identify the required work to be done.

3

Directing a Project (DP) the key principles for this stage involve defining what is required from the project, authorising the funds for the project, committing the resources and communicating with external interested parties, all of this is required to successfully govern the project, this stage does not cover the day-to-day activities of the project manager but it is required to enhance the project manager’s effectiveness.

4

Controlling a Stage (CS) this stage is concerned with giving attention to deliver the stage’s products, focusing resources, controlling risks, reviewing the business case and carefully monitoring the project for deviations.

5

Managing Product Delivery (MP) this defines the stage’s objectives by allowing the team manager to agree work with the project manager, get the work done and return it back to the project manager. The purpose of this is to define the required amount of work which can then be split into work packages – allowing improved management for the team manager.

6

Managing a Stage Boundary (SB) this process confirms to the project board that products planned to be produced in the current stage plan have delivered, this process is important to monitor and control the project, it evaluates the current stage and identifies any problems, depending on the outcome the project board may authorise moving on to the next stage.

7

Closing a Project (CP) every project should come to a controlled completion, to measure project success the project should be closed once the objectives have been met. Resources then should be freed up; allowing allocation to other activities that require them.

Appendix 4

The third area of PRINCE2 is the PRINCE2 themes, according to Bentley (2009) these consist of:

1

The business case – the philosophy behind this is that the project should be driven by a business need, if this need disappears the project should be stopped, the business case is continually referred back to during the span of the project.

2

Organisation – this theme supports the principle for defined roles and responsibilities, PRINCE2 recognises that three interests must be considered during the decision making process, these are the business, the user and the supplier, this is because the business covers the project funding as well as benefits from the outcome, the user’s interest represents people who will be affected by the final product and the supplier’s interest covers the resources required to build the products.

3

Plans – it is impossible to control a project without a plan, the plan is necessary for control, plans consist of elements including targets, end-products, work required, resources and skills needed, equipment required, time to create required products, work allocation and risks, these are all necessary to enter the project with solid foundations.

4

Progress – this theme is supported by three PRINCE2 principles justification, the purpose of this theme is to provide points in a project where control should be executed, as well as define PRINCE2 responsibilities, documentation and procedures for monitoring progress and then to compare the results against the planned results.

5

Quality – this theme defines the PRINCE2 approach to ensuring the end product is fit for purpose, further to this, the quality centred approach underlies PRINCE2 and the quality component, it is also scalable depending on the project.

6

Risk – risks are possible events that if occur can have dramatic effects upon the overall project success, to reduce risks PRINCE2 implements a risk management procedure consisting of identify, assess, plan, implement and communicate; change – this theme covers change control and configuration management and a project has to effectively manage its assets and its assets are the products it develops, over time they have to be effectively configured to change.

7

The final theme is tailoring PRINCE2 to the project environment, this involves tailoring PRINCE2 to the scale, complexity, geography or culture, tailoring does not involve dropping parts out of the methodology but adopting the methodology to fit factors such as documentation, standards and procedures of business.