Lesson 14: Structure of PRINCE2
We’re almost done with the second iteration of the course. Let’s have a look at the PRINCE2® structure now.
Based on AXELOS PRINCE2® material. Reproduced under licence from AXELOS. All rights reserved.
Note: PRINCE2 2017 edition is now called PRINCE2 6th edition.
- 00:10 – The Structure of PRINCE2
- 00:13 – PRINCE2 is one of the most widely used project methods in the world
- 00:17 – Actually there are over 1.2 million people who have a PRINCE2 certification
- 00:23 – PRINCE2 is very focused on describing what needs to be done
- 00:29 – So detailed product descriptions are first created and then agreed before the development takes place
- 00:37 – There are a number of benefits to using PRINCE2
- 00:42 – Such as, PRINCE2 is based on established and proven best practices
- 00:47 – Meaning that it has been used on thousands of projects and it has learned from this
- 00:55 – PRINCE2 is based on established and proven best practice, meaning that it has been used on thousands of projects and it has learned from this
- 01:06 – It can be tailored to any type of project; for example, from a one-day project to a three-year project and any project complexity
- 01:16 – It can be used on any type of project, so an IT solution, an election, organizing an event for St. Patrick’s Day, building a solar farm, etc.
- 01:28 – As PRINCE2 is widely recognized, this helps to have a common project vocabulary in organizations
- 01:35 – And this helps to promote the consistency of work
- 01:39 – PRINCE2 also helps to ensure that participants focus on the viability of the project
- 01:45 – So that each project has a valid Business Case, so a real business reason for doing the project
- 01:53 – It’s also supported worldwide with a network of accredited training organizations and excellent trainers
- 02:01 – Okay, I know what you’re thinking and thank you
- 02:04 – It promotes learning from a project experience and continued improvement in organizations
- 02:11 – But this is the same actually for most other project methods as well
- 02:17 – PRINCE2 claims that it consists of four main parts and it calls these four parts the Four Integrated Elements
- 02:26 – The first of these elements is the Project Environment
- 02:30 – So this relates to the project environment that the project is in
- 02:34 – So it will affect how the project is started, delivered, assured and closed
- 02:40 – Second are the Themes; the seven themes answer the questions regarding what items must be continually addressed during the project
- 02:49 – So for example, the Business Case, organization, quality, change and so on
- 02:56 – Third are the Processes; the seven processes provide information on the activities that are carried out during the project and by whom
- 03:07 – So they really help guide the project
- 03:10 – And four, the Principles; principles are good project management practices
- 03:16 – And all PRINCE2 projects should be using the seven principles no matter how small or how big they are
- 03:25 – So, how to check if you have a PRINCE2 project?
- 03:30 – Well, there are just four questions to ask
- 03:33 – And the first of these questions is, is the project applying the PRINCE2 principles? So, all seven principles
- 03:42 – Two, is the project meeting the minimum requirements as described in the PRINCE2 themes?
- 03:48 – More about this later when we discuss the themes
- 03:52 – And three, is the project using the PRINCE2 processes and meeting their purpose and objectives?
- 04:00 – And four, is the project using the PRINCE2 techniques?
- 04:03 – For example, MoSCoW, the quality review technique, progress evaluation and other similar techniques as well
- 04:14 – Organizations today succeed in balancing two things
- 04:18 – First is maintain the current business operations, which we call Business as Usual
- 04:25 – And two, transform business operations in order to survive and compete in the future
- 04:31 – So this is where we need projects
- 04:34 – Projects are needed to transform business operations and introduce change
- 04:40 – So the key word here, projects introduce change
- 04:45 – The PRINCE2 project definition from the PRINCE2 manual is as follows
- 04:51 – A project is a temporary organization that is created for the purpose of delivering one or more business products according to an agreed business case
- 05:01 – I also like this simpler and similar definition and it says,
- 05:06 – A project is a temporary organization created for the purpose of delivering one or more products within an agreed time and cost
- 05:18 – Projects have a number of characteristics, which is how projects differ from business as usual
- 05:25 – And the first of these is Change, so projects are a way to introduce change
- 05:31 – An example, a new sales website will change how clients will purchase items and it will change how the organization interacts with the clients
- 05:42 – Two, Temporary; there should always be a definite start and a definite end date to a project
- 05:49 – And projects should stop once the required products are delivered
- 05:53 – Ongoing maintenance is not considered part of the project
- 05:59 – Three, Cross-functional; a project involves people from different business departments and seniority that come together and work together for the duration of the project
- 06:12 – And then after the project, they can go back to ignoring each other if they like
- 06:17 – Unique; every project is unique
- 06:21 – There is always something different in each project
- 06:24 – For example, building a fourth house which may be very similar could be different in the following ways
- 06:30 – The location will be different, there’s a slight different in the design, the house fittings will be different, different heating requirements and so on
- 06:39 – And the last is Uncertainty; as parts of a project are unique, this brings uncertainty
- 06:46 – As you are not 100% sure how it’s going to work out
- 06:52 – So these are the five characteristics of a project and as you can see, these
- 06:59 – These are the five characteristics of a project and you can see all of these characteristics in all types and sizes of projects
- 07:09 – There are a number of variables to monitor and control in a PRINCE2 project
- 07:13 – And these are known as the six project variables and the most common that we are aware of are Time and Cost
- 07:20 – For Time, the Project Manager will be asking, “Will the project be finished on time?” or “Are we on target to deliver on the agreed date?”
- 07:31 – For Cost, well, costs need to be controlled and kept in line with the budget
- 07:37 – So the Project Manager will be asking, “Are the costs okay?” and “Are we in line with the budget?”
- 07:42 – More and more organizations are thinking about the long-term value
- 07:47 – And why we are doing this project and what are the long-term benefits
- 07:52 – So, Benefits must be known, they must be clear and measurable, and need to be delivered
- 07:59 – For Scope, the Project Manager will ask, “Is the scope well-defined and clear to all stakeholders?”
- 08:06 – Care must be taken by the Project Manager to avoid scope creep, which is to allow new low-value requirements to be added to the project
- 08:16 – For Quality, the Project Manager will be asking, “Will the product be usable at the end of the project, in other words, fit for purpose?”
- 08:22 – And “Are the products passing their quality checks?”
- 08:30 – For Risk, the Project Manager will be asking, “How much risk can we take on and how can we manage risk during the project?”
- 08:40 – According to PRINCE2, another name for these six project variables are the six aspects of project performance
- 08:50 – So, I want to give you a small tip here
- 08:52 – Think of this image as a cockpit that you might have in your car to show the status of a project
- 08:59 – So it gives a very good overview on how the project is going at any time
- 09:04 – And you can see that reporting can be made very easy if you use this type of information
- 09:12 – The last tip is how to remember these project variables
- 09:17 – You can use BC QRST or I use TeCQuila SoBeR, which stands for Time, Cost, Quality, Scope, Benefits, and Risk
- 09:27 – So choose the one which makes it easy for you
- 09:31 – You may be interested to know where the name PRINCE2 came from
- 09:35 – The old name was PROMPT and I suppose some people came together over some tea and drinks and decided to come up with a new name
- 09:44 – Well, the name comes from the first letters of PRojects IN Controlled Environments 2nd edition
- 09:52 – And there is nothing else you need to know about this
- 09:55 – Actually you don’t even need to know this; it’s just to give you some background information
- 10:01 – PRINCE2 assumes that there will be a customer and a supplier in each project
- 10:06 – And therefore these projects should use a contract
- 10:10 – So what should be in a typical contract?
- 10:15 – Well, this contract should provide some of the following information
- 10:19 – For example, the customer requirements and what the suppliers must do to meet the customer requirements
- 10:25 – For example, quality requirements and acceptance criteria
- 10:29 – The contract will describe how the customer and supplier will work together in the following ways
- 10:36 – For example, the project approach, so how their products will be created
- 10:41 – How reporting will be done from the supplier to the customer
- 10:45 – The different roles and responsibilities of the supplier and the customer
- 10:50 – Any procedure for handling change requests because every project will have change requests
- 10:57 – A procedure for reporting issues and how products will be tested and accepted and so on
- 11:04 – So let’s take an example of a large project where the government is the customer
- 11:09 – So this project can have one main contractor and this main contractor may then have a number of subcontractors
- 11:17 – So, the customer for the main contractor is the government and the customer for the subcontractor is the main contractor
- 11:26 – And they will have their own contracts between them
- 11:30 – There are many different types of projects and some examples of these projects are joint ventures, collaborative research, intergovernmental projects, inter-agency projects like NATO or the UN, and other types of partnerships
- 11:46 – And each supplier will have their own way of viewing the project as they see the project from their point of view
- 11:54 – For example, they will have their own reasons for undertaking the project and therefore they will have their own business case
- 12:02 – They will have their own procedures for running the project
- 12:05 – They will have their own procedures for making decisions, so governance
- 12:10 – They will have their own organizational structure
- 12:13 – They will have their own delivery approaches, so project methods
- 12:18 – And own culture, like behaviors, cultures, risk appetite and so on
- 12:24 – PRINCE2 assumes that there will be a customer and a supplier in each project
- 12:29 – And the customer will specify the desired result and perhaps pay for and use the product delivered by the project
- 12:37 – The supplier will provide the resources and skills to deliver the desired products
- 12:43 – And the supplier can be a person or group or even a group of companies or a group of groups, let’s say
- 12:49 – For example, a group of contractor companies
- 12:53 – The request for the projects have to come from somewhere outside the project
- 12:57 – For example, a program, upper management or a customer
- 13:01 – And PRINCE2 uses the term Corporate, Programme Management, or Customer
- 13:08 – Projects can exist within many contexts
- 13:11 – So PRINCE2 says that projects can be stand-alone with no connection to any other project
- 13:18 – Or it may be part of a program or a portfolio
- 13:23 – The following diagram shows the relationship between a portfolio, program, and a project or projects
- 13:31 – So here is one portfolio and two programs
- 13:36 – So what is a program? I have simplified the definition from the PRINCE2 manual a bit
- 13:42 – A program is created to coordinate a set of related projects, so it can deliver outcome and benefits related to the strategic objectives
- 13:52 – So a program can have a lifespan of several years
- 13:56 – For example, rolling out a new ERP system and this can contain numerous projects
- 14:02 – I would say that less than 25% of all organizations have a proper functioning program office
- 14:12 – What is a portfolio?
- 14:14 – A portfolio is the totality of the organization’s investment in the changes required to achieve the strategic objectives
- 14:23 – So the key words here are a totality of the organization’s investments and objectives
- 14:29 – Another way to say this - A portfolio is a group of projects or programs for the organizations which are managed in one group
- 14:39 – And these portfolios help the organization to advance their goals
Congratulations, you’re done with the second iteration of the course!
In the next iteration we will cover all the details in the PRINCE2 Foundation level, and it will be easy for you to learn it based on what you already know.
Do you know that teaching is a great way of learning? So, why don’t you stop here and explain the PRINCE2 processes to your colleagues? It’s a win-win activity.
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