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.

Playtime!

Let’s review what you’ve learned so far with the following “game”!

Your performance data will be saved, and you can always come back and play again.

Lesson 14: Structure of PRINCE2

Playtime!

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