Lesson 01: Principle 1

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OK, so back to the course… We’ll talk about the “Continued Business Justification” principle in this lesson.

Based on AXELOS PRINCE2^® material. Reproduced under licence from AXELOS. All rights reserved.
Note: PRINCE2 2017 edition is now called PRINCE2 6th edition.

00:05 – So welcome to the Principle section.
00:08 – So, in this section, I will ask a number of questions, Nader will give a comment, not from a PRINCE2 point of view, but from a general point of view, and that will give you more information on how actually PRINCE2 views the principles.
00:23 – So, it’s a good way. Alright, so let me start off with a number of questions and you can comment on each one.
00:28 – Okay.
00:30 – The first thing that it says about principles in the manual is that PRINCE2 is principle-based rather than prescriptive.
00:39 – What does that actually mean?
00:42 – Well, about being principle-based, I think one of the main thing about PRINCE2 is that, the main thing we are supposed to do in PRINCE2 is to realize those seven principles, that’s the main goal, and it’s up to you to see how you want to do that, and the rest of PRINCE2, maybe in my opinion, is one way of realizing the seven principles.
01:06 – That’s how I interpret the being principle-based.
01:10 – Okay.
01:11 – How would you do that?
01:12 – Yeah. So, well, the way I read it is, yeah, you have to include you have to make sure that you’re following these seven principles in your project. That’s the whole idea and, yeah, as you said, it’s up to you how to do that, but just remember that you have do it. You should be always doing it.
01:28 – Yeah. Well, for example, the PMBOK guide is not principle based like this.
01:33 – The real essence of the PMBOK guide is about the whole thing in the PMBOK guide.
01:40 – Yeah.
01:41 – And here I really see this difference.
01:45 – Okay.
01:46 – It’s very interesting I think.
01:47 – So, if you one of the concepts that we have is tailoring where you make changes in the project and most people have this problem, is the proper way of tailoring, because sometimes we are not allowed to make certain changes in a PRINCE2 project, and always the answer is check it with the principles.
02:07 – If it’s compatible with principles, then yes, do it, but if it creates any problem for any principle, then that’s not the right way of tailoring.
02:17 – So the principles can be like a checklist for you, how you do things correctly.
02:20 – Yeah.
02:21 – Okay. How big does a project have to be before you can use all the seven principles?
02:28 – Does it have to be so big or even so big of a project?
02:32 – Well, there are different ways of thinking about it.
02:38 – Based on PRINCE2, any type of project can be managed by PRINCE2 and whenever you want to use PRINCE2, you have to follow the principles.
02:49 – Okay.
02:50 – But in very small projects, especially when we don’t have many people, PRINCE2 may not be the best methodology, but still when I think about it, I think that all principles of PRINCE2 are applicable even to the smallest of projects.
03:10 – Yeah But you need to find another way of realizing the principles other than what we have in the manual.
03:16 – Yeah. You don’t need to go in there and create all those documents.
03:20 – You just have to be aware of it. Like for example, is there a business reason behind this?
03:25 – You don’t need to have a two-page Business Case, but you need to know what value there is in doing it and maybe that takes two lines of information and some document, that’s okay. You have it covered.
03:36 – Yeah. For example, let’s take, taking a course like this for you guys.
03:42 – When you want to do it, maybe it’s a good idea if you consider the project and that may be acceptable.
03:50 – In that case, you need to think about the Business Justification. What is the justification of doing this?
03:55 – What are the costs? What are the benefits?
03:58 – The cost is one of them is the money you have to pay for the course.
04:01 – The other is the amount of time you have to spend, which is usually much higher than the money you have to pay for the course, way more than that.
04:08 – So, you combine all the costs of doing this thing and then compare it to the possible benefits, but what are the benefits you want from this course? That really depends on the strategies that you have and you need to know what you want.
04:24 – Do you only want to have a certificate?
04:27 – Do you want to learn something you can use in your projects?
04:31 – Do you want to … are you just curious?
04:35 – And based on the different answers you have to this question, you will have a different relationship with this course, Yeah.
04:42 – and that’s for something really this small.
04:45 – Because your requirements are slightly different, yeah. Okay, good.
04:51 – Now according to PRINCE2, which are the more important principles, do you think? And why?
04:59 – I think PRINCE2 sees all of them at the same level.
05:02 – Are you sure?
05:04 – Not 100%, but I think.
05:06 – Yeah, yeah. It’s the same importance, I’m trying to catch you out, but all principles should be applied equally and none of them have importance over the other one.
05:15 – There are seven principles and make sure that each project that you work on has these applied, that’s the idea. Okay.
05:23 – What basically are principles?
05:26 – Suppose if you were trying to describe a principle to someone who didn’t know about project management and where do the principles come from?
05:33 – Why did PRINCE2 bother to include a chapter on principles in their reference manual?
05:39 – I don’t really know the history of how it happened, but the idea is that these are the things that are common among successful projects.
05:48 – That’s one way of seeing this, but that’s too optimistic.
05:51 – The real thing is that these are a few things that you have to keep in mind, and if you don’t follow even one of them, then chances are really high that you will fail in your project.
06:03 – That’s the other way.
06:05 – Yeah. Okay. They’re guidelines for good practice.
06:06 – It’s something that you should be doing and if you’re not doing it, then you’re not doing the basic thing in order to have a successful project, and PRINCE2 says they were developed basically from analyzing successful projects, but also from analyzing projects that failed and you will see why they failed and you go, “Okay, well, they didn’t include this and if they had included that, then the project would’ve been more successful or could’ve been successful.” That’s based on experience.
06:34 – Yeah, yeah. So it really comes from lessons and it’s a nice idea actually to pull out these seven things you should keep in mind all the way during the project.
06:42 – It’s good, it’s a good idea from PRINCE2.
06:44 – You know, one of the things that I hear from many people is that they say that the standard methodologies such as PRINCE2, the PMBOK guide and so on are too much theory for a Project Manager.
06:55 – They need to have something more practical.
06:57 – Yeah.
06:58 – And my usual answer is that they’re not theory.
07:03 – They are all based on experience and they are a structured, organized package of experiences provided to you.
07:12 – It’s like having access to experiences of hundreds of people.
07:17 – The only difference is that it’s organized and it’s simplified for you. So that’s perfect.
07:21 – Yeah, that’s true.
07:23 – What else can you wish for? It’s great, It’s a great thing.
07:26 – Yeah. You’re standing on the shoulders of giants.
07:28 – Yeah.
07:29 – Good. Alright, now the first principle we’re going to discuss is the Continued Business Justification, that’s the Business Case one.
07:37 – So, isn’t this principle a bit self-evident and why do we bother to document this?
07:45 – It is self-evident, I think, but we don’t do it in projects. Most people don’t do it.
07:50 – They don’t do?
07:52 – They forget about the Business Justification. They just focus on activities in projects.
07:56 – Okay.
07:57 – That also relates to the other principle for being focused on products, but they dont think about the why questions.
08:05 – Why are we doing this project? And that’s where you want to make decisions.
08:10 – And then ask why again.
08:12 – Yeah.
08:13 – Okay. Why do we need that?
08:14 – Again and again and again, yeah.
08:15 – And what other options are there and why? Okay.
08:16 – And when you don’t do it, you just do the most usual thing that you’ve always seen, which may not be the best for your Business Justification.
08:23 – Yeah. Yeah. That’s right because mainly a project has ____ to being done because someone thought it was a good idea once, and perhaps maybe after 6 months, the person who initiated the project has lost interest because there’s no justification behind it and they’ve moved on to another great idea, but in the meantime, they have a project up and running which is using resources, and that’s expensive for the company.
08:45 – So always having a Business Case, and the good thing about then having a Business Case is you can compare it against other projects as well.
08:52 – So, you can prioritize your projects, so that has a big value also.
08:57 – So, for this principle, Continued Business Justification, when do the project … when should a project start to apply this principle, the Business Case principle?
09:11 – The Business Justification?
09:13 – Yeah, Business Justification. What did I say?
09:15 – Business Case.
09:16 – Oh yeah, well, okay. I mixed them up, yeah.
09:17 – Yeah. They’re really close.
09:19 – Yeah.
09:20 – Well, as soon as possible, all the way through the project, from the beginning to the end and that’s again for all principles.
09:25 – So as soon as possible. You mean in the planning initiation stage?
09:28 – Even before that when we start up a project.
09:30 – That’s it, yeah.
09:32 – When you start thinking about the project, that’s when we should stay focused on the Business Justification.
09:38 – As soon as we have the idea about the project.
09:40 – We may not even want to start the project, but when we are thinking about the idea for the project, that’s when we should start thinking about the Business Justification.
09:48 – Yeah. The first is why, that’s the reasons for the project, and then we look at, okay, well, what’s the value in doing this and that’s the Business Case.
09:55 – So, yeah, as soon as the project starts up in the Starting Up a Project process, we are doing this and that’s what the outline business case is for, and we write that justification down. It’s very important to get it.
10:06 – And then, of course, we check it during the project to make sure while the Project Board will check it and the Project Manager will provide them information to do it.
10:14 – Especially at the end of each stage.
10:16 – Yeah, yeah, good. Now a scenario for you.
10:20 – The Project Board uses Business Justification to drive decision-making and ensure that the project is aligned with the overall organization business objectives. Okay?
10:32 – I think that’s known, we know that. But the Project Board knows that this is more important at the start of the project, so once the project is up and running, then there’s no real need to check the Business Case anymore.
10:49 – Is that a correct way for the Project Board to think?
10:53 – There are different reasons we need to have a Business Case and check the Business Justification.
10:58 – One of them is to make sure that it’s aligned with the strategies of the company and that’s mainly, but not entirely done in the beginning of the project, but there are other things as well. For example, is it still justifiable, does it make sense to finish the project, and that’s something that we have to check all the time during the project, especially in the boundaries, two boundaries, End of the Stage and Exception.
11:24 – And also, we use it to make high level decisions.
11:30 – That’s another thing that happens all the way during the project.
11:33 – We can have two otherwise similar projects that have two different justifications and they require different types of decisions.
11:42 – Yeah.
11:43 – For example, one project that you are doing for money, the other you are doing to enter a new market.
11:48 – For the first one, for example, if you need to, you may lower quality to the minimum acceptable level, but for the second one, you may not want to do that because it doesn’t justify anymore.
12:03 – If you lower the quality, even to the acceptable level, it won’t look fine and you won’t be able to enter the market as you want.
12:11 – So you may want to pick other options, for example, spending more money or even stopping the project.
12:17 – Yes, yes, I see. Yeah, it’s a good idea to think of that.
12:22 – Now our next scenario is, let’s say we have a bank and we have a compulsory project that needs to be done.
12:28 – So because it was a new government legislation and they have an older IT system, so they are … they want to proceed or fix this.
12:39 – So the Project Board believe that this project is mandatory and this always gives them the Business Justification to do their project.
12:47 – Is that a correct way for them to think?
12:51 – So they can just write down why, and then when the bosses ask, “What’s your Business Justification?,” they say, ““Legislation,”” and that’s their Business Case.
12:59 – No, that’s not the Business Case.
13:03 – We still have we need to have a justification for that and, in here, the decision is that if we don’t do it, then we won’t be able to continue providing that service anymore.
13:13 – I see.
13:14 – So what we have to do here is compare the cost of doing this project, which allows us to continue providing that service, to the benefits we will have by continuing that service, or in other words, the benefits that we will lose if we don’t make this investment.
13:30 – That’s the real Business Case, comparing those two things and we always have the option not to do it and stop the service, maybe invest in other things, other ideas in the company.
13:40 – And the example here I mentioned an old IT system, so let’s say that a bank has got, let’s say, several systems which customers use, but one system, which is the old one, is only used by 2% of the customers.
13:54 – So when the new banker legislation comes in, they might decide, okay, well, not to do it and just shut down the system because it’ll cost more to update the system than shut it down.
14:05 – It’s also a very … when you know car manufacturers, they do recalls as well.
14:13 – So it used to be that some of the decisions were, well, what happens if we don’t do a recall.
14:18 – Will there be accidents and have insurance claims?
14:20 – Okay, well, how much will that be?
14:23 – Will that be cheaper than updating it?
14:26 – And that’s the way they used to do it. Of course, now with the internet and with the press, they don’t do that much anymore, but they used to do that.
14:32 – But the idea can be the same. That’s the money they will lose and the credibility that they will lose because of the internet and maybe some companies may also pay some attention to peoples' lives and things like that, but they all can be computed and Yeah. Some companies can sit back and say, “Well, if we don’t do it, or if we do it, we’re going to have to pay 2000 or let’s say 20,000 Euro, but if we don’t do it, we’re going to get a fine of 2000 Euro,” so that’s very easy to make that.
15:05 – So we’ve just covered now the first principle, which was about Business Justification, and in the next when we come back, we will look at the next principle, which is concerning lessons and PRINCE2 calls that Learn from Experience.

Next, we will discuss the “Learn from Experience” and “Defined Roles and Responsibilities” principles.

Scenarios/questions we’ve discussed in this lesson

Overall
- PRINCE2 is principle-based rather than prescriptive. What does this mean?
- How big is a project that uses all seven PRINCE2 principles?
- Which are the most important principles, and why?
- What are principles and where did these principles come from?
Continued Business Justification
- As this principle is self-evident, why bother to add this as a principle?
- When should a project start to apply this principle?
- Is this principle less important at the end of the project?
- Do mandatory projects need a business case?

Lesson 01: Principle 1

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