Prince2 Foundation User Guide v1.6

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PRINCE2 ®

2009Foundation

User Guide Version 1.6 26/06/2012


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Printed and Published by:

ILX Group plcGeorge HousePrinces CourtBeam Heath Way

NantwichCheshireCW5 6GD

The Company has endeavoured to ensure that the information contained within this UserGuide is correct at the time of its release.

The information given here must not be taken as forming part of or establishing anycontractual or other commitment by ILX Group plc and no warranty or representationconcerning the information is given.

All rights reserved. This publication, in part or whole, may not be reproduced, stored in a

retrieval system, or transmitted in any form or by any means – electronic, electrostatic,magnetic disc or tape, optical disc, photocopying, recording or otherwise without the expresswritten permission of the publishers, ILX Group plc.

ILX Group plc 2009

Quoted PRINCE2 text is from Managing Successful Projects with PRINCE2 © Crowncopyright 2009. Reproduced under licence from OGC.

PRINCE2® is a Registered Trade Mark of the Office of the Cabinet Office.

The Swirl logo™ is a trade mark of the Cabinet Office.


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Contents

Page

FOREWORD 7

SECTION 1 - Hardware/Software Pre-requisites 9

SECTION 2

2.1 Course introduction2.2 Overview & Principles2.3 PRINCE2 themes – Part 12.4 PRINCE2 themes – Part 22.5 Processes2.6 Case study2.7 Examination technique2.8 Exam Simulator

1116223748566062

APPENDICIES

Glossary 63

Accessibility Functions 77


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Foreword

ILX Group plc is a leading developer and distributor of multimedia training products

specialising in the area of project and programme management.

PRINCE2 Foundation uses the very latest multimedia educational techniques to provide alearning environment which is stimulating, easy-to-use and stress-free.

The aim of this course is to take students with little or no knowledge of PRINCE2 to the levelwhere they could take the Foundation (Part 1) examinations with a high degree of confidencein achieving a pass. The examination within the course package uses previous examinationquestions that are accessed at random to provide an accurate simulation of the real thing.

We hope you enjoy the course and that you find it a useful starting point in your PRINCE2training programme.


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Section 1: Hardware/Software Pre-requisites

For the best experience using this multimedia course on a computer, we recommend thefollowing specification:

Operating System: Windows XP, Windows Vista, Windows 7, Mac OSXCPU: Intel Pentium II 450MHz or faster processor/PowerPC G3 500MHz or faster processorRAM: 128MBScreen resolution: 1024 x 768 or higherPeripherals: Sound Card & Speakers, Keyboard & MouseSoftware: Flash Player 8 or higher


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Course Introduction

S1P1 – Objectives

Welcome to session 1 of this complete e-learning training course in the PRINCE2

method.

This introductory session is intended tohelp you get the most out of the trainingprogramme and to give you a basicappreciation of what PRINCE2 is and whyit is relevant.

Once you have completed this sessionyou will be able to state the objectives ofthe course and match these against yourown learning requirements.

You will know what a project is and beable to define a project using PRINCE2terminology.

You will be able to explain the problemsthat PRINCE2 sets out to solve and whysuch a method needed to be devised.

Finally, you will be able to list the principalorganizations that are involved inPRINCE2’s development, support andpromotion.

S1P2 – Course Objectives

One of the major advantages of PRINCE2is that there is a universally recognised setof examination standards – which areindependent of the training providers.

The UK’s Office of GovernmentCommerce, who is the author ofPRINCE2, defines two levels of studentexamination – namely Foundation leveland the more advanced Practitioner level.

A “pass” at the Foundation level is a pre-condition of sitting the Practitionerexamination.

This Foundation course has been speciallyconfigured to give you all the informationand training that you will require toconfidently take the PRINCE2 Foundationexamination.

Should you wish to go on and take thePractitioner examination at a later stage,then ILX can provide all the necessaryadditional training materials.

However, examinations are not really whatPRINCE2 is all about, and many people

just want to use PRINCE2 to improve thequality of their project management.

So – perhaps a more important, business-

oriented objective of this course is thatonce you have completed your studies youshould be able to operate as an informedmember of a project team, operating in aPRINCE2 environment.

S1P3 – Supporting Material

In addition to the e-learning course, thereare some paper-based materials that willhelp you in your studies.

The first and most important is a copy ofthe PRINCE2 Manual itself. If you havepurchased this course as part of one ofour bundled packages then you will have acopy of this book.

Otherwise, if you haven’t already obtainedone from elsewhere we stronglyrecommend that you buy a copy eitherfrom ourselves, from the APM GroupLimited or from the Stationery Office.

You are not allowed to take the manual, or

any other materials into the Foundationexamination with you, but if you areserious about PRINCE2 then you reallyshould have your own copy of the manual.

You may also have been provided with adocument called the Course User Guide,either in paper-based or electronic form.This useful document contains a more orless full transcript of this course content,slightly modified to make it suitable to thedifferent medium.

Although by no means essential, you mayfind this document useful, both during andafter your studies.

S1P4 – Character Introduction

During this course you will come across anumber of characters that are involvedwith PRINCE2. Let’s introduce you tosome of these characters before we getstarted.

Here we have the Project Board, which isresponsible for the overall direction and


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management of the project. The ProjectBoard consists of the Executive, seen heresitting in the middle, who is ultimatelyresponsible for the project and issupported by the Senior User and SeniorSupplier.

The Project Manager runs the project on aday-to-day basis and is responsible forproducing the required products to therequired standard and quality.

S1P5 – What is Project Management?

Most people have some experience ofproject management, even if it is only intheir personal lives.

You wouldn’t be taking this coursehowever unless you had someprofessional interest in managing projectsand unless you already had somefamiliarity with the basics of projectplanning and control.

So you should be able to recognise adefinition of what a project is.Here is a list of several common andperfectly valid definitions of the word“Project”.

One of these is actually given in thePRINCE2 manual – can you identify whichit is?

Click in the white boxes to make yourselection and then click on the “Submit”button to confirm your answer.

Answer feedback:

Take a look at this page of the PRINCE2Manual and you will see the definition wewere looking for.

You will notice that two words crop up veryoften in defining the word project – “cost”and “time”. Projects are all about achievinga given objective within a pre-defined cost,or budget, and by a specific time.

Much of what goes on in PRINCE2 isaimed at achieving and satisfying the costand time constraints that are inherent inany project. But PRINCE2 also placesgreat emphasis on a third parameter – thatbeing Quality.

If, as a Project Manager, you areconsistent in getting all of those threefactors – cost, time and quality - right thenyou won’t go far wrong. PRINCE2 exists tohelp you do just that.

S1P6 – Variables of a Project

In addition to Costs, Timescales andQuality, PRINCE2 goes on to identify threefurther variables which affect any projectand which need to be managed to achievea successful project outcome.

These are:

Scope – what exactly the project will or willnot deliver.

Risks – regardless of the nature of theproject, all projects involve risk. Themanagement of risk is an important themein PRINCE2.

And Benefits – in other words “Why are wedoing this project?” Or "Will the completedproject deliver the expected benefits?"

S1P7 – Why do projects exist?

Every organization however large or smallfaces two distinct imperatives, these are:

• To maintain ‘business as usual’ – inother words continue day-to-dayoperations

• And to change in order to compete in anever-changing environment.

Organizational management isincreasingly focussed on balancingbetween business as usual and change.

Projects are a way to bring about changeand although many skills required tomanage an organization can beconsidered generic there are someimportant skills which those involved inprojects should possess.

PRINCE2 defines project management as,‘the planning, delegating, monitoring andcontrol of all aspects of the project, andthe motivation of those involved, toachieve the project objectives within the

expected performance targets of time,cost, quality, scope, benefits and risks.


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S1P8 – Activity

Shown below are four of the six projectvariables which PRINCE2 identifies. Canyou recall the other two?

Answer feedback:

The six project variables defined byPRINCE2 are Costs, Timescales, Quality,Risk, Scope and Benefits.

S1P9 – What makes a project different?

But what specifically makes projectsdifferent from Business As Usualactivities? Well this can be defined by anumber of specific characteristics.

Firstly Change, which by their very nature,projects bring about. Projects are alsoTemporary in nature, once the requiredchange objectives have been achieved,then Business As Usual resumes. Soprojects have a defined start and just asimportantly, a clearly defined end.

Projects are often complex and involvemany skills from different areas internaland external to the organization. They canbe considered to have Cross-functional

characteristics. PRINCE2’s customersupplier approach means that the projectas a whole benefits from differingperspectives, each contributing to theintended change.

Although organizations may undertakesimilar projects, using a proven pattern ofproject activity, each project is still in effectUnique. After all, even similar projects arelikely to involve different resources,locations or customers.

Finally all projects contain a degree ofuncertainty. The five characteristics we’vealready discussed here, will by their natureintroduce threats and opportunities to theproject. These can be considered over andabove those which are encountered inbusiness as usual activities.

S1P10 – What is PRINCE2?

A good starting point to answering thequestion “What is PRINCE2?” is tounderstand exactly what PRINCE2 is not.

PRINCE2 is not a piece of computersoftware.

PRINCE2 is not a planning tool, in the waythat Microsoft Project is, for example.

PRINCE2 is not carved in tablets of stone- it is designed to be flexible to meetparticular circumstances.

PRINCE2 is not, like some of itspredecessors, unnecessarily bureaucraticor cumbersome.

PRINCE2 is not restricted to large projects- it can be applied across the board toprojects of all kinds and sizes.

PRINCE2 is not a guarantee of successful

project outcomes - but it certainly can helpprevent embarrassing and costly projectdisasters.

So, if PRINCE2 is none of these things,what exactly is it?

At its most basic level, PRINCE2 is abook, which is produced by the UKgovernment’s Office of GovernmentCommerce – or OGC - and which entirelydescribes a structured method forapproaching, managing and closing down

a project of any type or size.

S1P11 – What is PRINCE2? - continued

One of the great strengths of PRINCE2 isthat it is truly generic. It is applicable toany project regardless of;

• The scale of the project • The type of project • The nature of the organization • Culture

• or geogr aphical location

PRINCE2 achieves this by isolatingmanagement and specialist aspects ofproject work. In effect the day-to-day workon the project is handled separately fromthe production of the project'sdeliverables, known as products inPRINCE2.PRINCE2’s generic nature can providesignificant benefits in all facets of businessactivity, whilst strengthening organizationalcapability and maturity.


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The PRINCE2 manual lists manyimportant benefits. We have summarizedthese here for your convenience.

S1P12 – PRINCE2 Players

To help promote PRINCE2, the OGC hascollaborated with a number oforganizations.

The Stationery Office, for example arecharged with printing and distributing themanuals.

The APM Group Limited, in HighWycombe, have been appointed by theOGC to co-ordinate the examinationprocedures and to accredit the various

training organizations, such as ourselves.

Companies that have been approved bythe APM Group to deliver training inPRINCE2 are referred to as AccreditedTraining organizations or ATOs and arethereby entitled to use the PRINCE2 logoon their training and promotional material.

A higher level of accreditation is providedby UKAS – the United Kingdom

Accreditation Service. They audit theprocedures of the APM Group to verify

that they meet the standards expected of aprofessional accrediting body.

There is a well-established user group forcompanies and individuals that usePRINCE2 – or any of the other OGC-inspired Best Practice approaches such asManaging Successful Programmes andManagement of Risk.

Contact details of all of theseorganizations can be found by clicking ontheir respective names.

S1P13 – Review Questions

Now try your hand at a few questionsabout PRINCE2.

Would you say this statement is true orfalse?

Answer feedback:

Whilst most projects of any size these

days will almost always involve the use of

a computerised planning tool, PRINCE2does not mandate their use.

All that PRINCE2 says is that planningmust be done - it doesn’t dictate how itshould be done.

In fact, it is generally true of PRINCE2 thatit tells you what should be done and why itshould be done - but it stops short oftelling you how to do it.

S1P14 – Review Questions

Try answering this question.

Answer feedback:

PRINCE2 is not prescriptive - it isdescriptive. It is designed to be interpretedand applied according to the needs of theproject under consideration.

S1P15 – Summary

This brings us to the end of session 1.

In this brief introductory session we haveseen what a project is, as defined byPRINCE2 and we have seen six variablesof a project as recognised by PRINCE2,

namely costs, timescales, quality, scope,risks and benefits.

We went on to look at why projects exist,and what differentiates a project fromBusiness As Usual activities.

We described what PRINCE2 is, and howits generic nature makes it applicable toprojects of any type or type.

Finally we outlined some of the keyorganizations which collaborate in order to

support PRINCE2.


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Session 2 – Overview andPrinciples

S2P1 – Objectives

Welcome to session 2 entitled ‘overview

and principles’.

This session sets out to explain thefundamental concepts on which thePRINCE2 project management method isbased.

Once you have completed the session youwill understand the method and therelationship between its Principles,Themes and Processes and some of thespecific tools needed when tackling aproject of any size.

You will, therefore, learn about the keyelements that make up the PRINCE2project management method and thestructure of the PRINCE2 Manual.

Finally, you will be able to recognise theessential characteristics and structure of aPRINCE2 project.

S2P2 – Basic Concepts

In order to successfully complete anysignificant job of work there are five mainaspects that need to be considered,namely:

• The method to be used, in other wordshow will you approach the job?• How will the work be organized? • What are the main factors that need tobe taken into account?• Who will have responsibility for what?• And how will progress be monitored andcommunicated?

PRINCE2 provides best practice guidanceon all of these aspects by defining:

• Seven self -validating Principles• Seven Themes • And Seven Processes

The seven Principles provide a best-practice framework for the project.Ultimately they define a PRINCE2 project.

The seven Themes provide guidance onaspects of project work which should beaddressed at various points during the

undertaking. They relate to each other andare integrated into the Processes.

Finally the seven Processes offer a‘journey’ through the project so that criticalaspects of project work are neither

forgotten nor treated in a trivial manner.The Processes, which form a processmodel, take the project team through theproject timeline from initial instruction tothe delivery of the product or productsneeded by the organization.


Imagine that the project is the constructionof a large prefabricated building.

This project would require a significantinvestment and involve many people withdifferent skills. Therefore, a moreformalised approach would be required forthis project. To handle the complexity ofthe work and aspects of the technical worksuch as planning permission and buildingcontrol you may decide to use PRINCE2as the method for the project.

PRINCE2 will encourage you to produce asound business justification for thebuilding and assist you in setting up the

management structure and defining rolesand responsibilities. It will also provide youwith a set of management procedures orprocesses to guide you all the way throughthe project from beginning to end.

Notice that PRINCE2 does not, andcannot, provide a set of detailed job-instructions specific to the project becausethe method is generic and not createdaround specific technical work.Nonetheless it does guide you in themanagement of the production of the

products.

Many different techniques would berequired for such a project - some of themanagement techniques would be fairlygeneric but there would also be a wholehost of techniques specific to theconstruction industry.


PRINCE2 does not set out to define all the

techniques of project management - but itdoes recommend some key ones -


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particularly the use of Product BasedPlanning - as a means of maintainingobjectivity throughout the project. TheProduct Based Planning technique isprovided as part of the Plans Theme.

Other project management techniquessuch as Networking, Critical Path Analysisand Gantt Charts would probably be usedon a project like this - but PRINCE2 doesnot define or mandate them - it just saysthat such techniques must be chosen andused as appropriate.

In addition to the project-specific tools forspecialist work such as cranes, diggersand cement mixers, there may also be aneed for management tools such ascomputers and associated software.

Again PRINCE2 does not include ormandate the use of any these types oftools - other than to say they should beselected and used as required.

S2P5 – Activity

Do you think Microsoft’s MS-Projectsoftware package would be classed as amethod, procedure, technique or a tool?

Answer feedback:

MS-Project, together with the many othercommercially available computer-basedplanning packages, would be classed as atool - used in support of the project.

The PRINCE2 manual also gives guidanceon tailoring PRINCE2 to the projectenvironment. This includes information onhow to apply the PRINCE2 method takinginto account, for instance, the scale of theproject, the customer/supplier environment

and whether the project is in the private orpublic sector.

S2P6 – Key elements of PRINCE2

So let’s now take a more detailed look atthe make-up of PRINCE2 and see how itrelates to the aspects of work which wehave just been discussing.

The first thing to understand aboutPRINCE2 is that it does not exist or

operate in isolation from the rest of theorganization.

Each organization usually has its own setsof standards and practices. There may bean ISO9000 certified quality managementsystem in operation, as well as establishedbest-practice, experience andcommonsense procedures.

All of these act as a foundation on whichPRINCE2 must be installed when it isadopted by an organization.

Given these factors, the next base onwhich PRINCE2 is founded is that everyproject will have a Business Case. Thismust be carefully prepared to assesswhether the expected business benefitsthat could accrue from the project justifycommitting to the anticipated project costsgiven the risks.

This focus on the Business Case meansthat PRINCE2 is used by the project teambefore work on the project’s specialistproducts begins. This high-levelpreliminary work is essential if a maincause of project failure is to be avoidednamely - a project which was never worthdoing in the first place.

S2P7 – Key elements of PRINCE2 -Principles

There are then three main elements whichmake up the PRINCE2 method in itsentirety. Firstly, there are the Principles.

Projects vary greatly in size, complexity,business criticality, location and culturalsetting. Regardless of these factors thereare some principles which should beacknowledged and held to be true before,during and after the life of the project.PRINCE2 defines seven Principles whichhold true from the conception of the

project through to completion and close-down. They are:

• Continued Business Justification • Learn from experience • Defined Roles and responsibilities • Manage by stages • Manage by exception • Focus on products• Tailor to suit the project environment

Let’s spend a few moments to look at eachin turn.


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The first PRINCE2 principle is that of‘Continued Business Justification.’

Buying a house or a car is a majorexpense for most people. It is unlikely thatthe purchase would be made without

some serious thought and evaluation. Theequivalent in project terms is the creationof a Business Case to investigate theproject’s viability. The Business Case isthe documentary evidence that theContinued Business Justification Principleis being followed. We will look at thecreation and maintenance of the BusinessCase in the Business Case Theme,exploring this Principle in more detail.

S2P8 – Key elements of PRINCE2 -

Principles

The second PRINCE2 principle is to Learnfrom Experience’. Everything we do in lifecontributes to who we are and what weare able to do. We often label that as‘experience’. In a project environmentwhere the same group of people may notwork together again on later projects the‘collective memory’ or Lessons Learnedshould be captured more formally so thatno project should waste resource on ‘re-inventing the wheel’.

The Learn from Experience principlebecomes embedded in PRINCE2 in theProcesses chapter. It’s here previouslessons are reviewed and current lessonsare captured and passed on to laterprojects.

Creating Defined Roles andResponsibilities’ is another key PRINCE2principle.

Knowing what is expected of you and

knowing what you can expect of others isimportant in any form of work. Project workis no different. The Defined Roles andResponsibilities principle becomesapparent in the Organization Themewhere the Project Management Team isset up.

Undertaking a technically complex,expensive and business-critical project ‘inone go’ invites unacceptable risk.PRINCE2 uses another of its principleshere, namely Manage by Stages. The

project is divided into ‘manageablechunks’ called stages. This brings several

advantages to the project. One advantageis that the Stage Boundaries encouragethe Project Board to re-evaluate theviability of the project periodically. Anotheradvantage is that the Project Manager isnot required to plan in detail for lengthy

periods of time – especially when nextweek is difficult to predict in someenvironments. The principle of Manage byStages will be revisited in the ProgressTheme.

S2P9 – Key elements of PRINCE2 -Principles

In any project people need to know theirlimit of authority so they neitherinadvertently exceed it nor seek guidance

from a higher level of management tooearly. Appropriate delegation of authoritythrough the levels of management in theProject Management Team is important toproper management of the project. TheManage by Exception principle seeks tohave each level of management givenclear responsibilities and accountabilitiesfor parts of the project. We’ll visit thisprinciple again in the Progress Theme,where we will look at Tolerance which isthe mechanism which enablesManagement by Exception.

Focus on Products

You may be used to creating and workingwith ‘to do’ lists. They focus our attentionon activities. PRINCE2 takes a differentview of things for project work. It draws ourattention to ‘products’ rather than‘activities’ as a starting point. The princ iplehere is to Focus on Products. So, the firstquestion we should ask is, “What have Igot to make?” rather than, “What have Igot to do?” This is appropriate to project

work in particular where we are required to‘produce’, or ’create’, or ‘modify’something. The Plans Theme and theplanning work will embody the Focus onProducts Principle.

The seventh and final PRINCE2 principleis Tailor to suit the Project Environment’.

Projects are distinguished by a number ofcharacteristics. One of them is that theyare unique. Every project is different.Some of the differences relate to the

products being made, to the environmentbeing changed and the people whose


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work is being modified. ConsequentlyPRINCE2 needs to be tailored in the way itis used otherwise it will becomebureaucratic rather than pragmatic.

S2P10 – Key elements of PRINCE2 -Themes

PRINCE2 identifies seven Themes asbeing the essential ingredients for anysuccessful project. They are:

Business Case. As we have seen theBusiness Case for a project forms part ofits very foundation. It is the most importantset of information for a project and drivesthe decision-making process. It is usedcontinually to ensure that the project’s

progress is aligned with the businessobjectives.

Organization. Defining all the roles,responsibilities and relationships for thepeople involved in managing andexecuting the project.

Quality. The emphasis which PRINCE2places on products, or deliverables,means that it is easy to see the relevanceof traditional quality managementprinciples to the management of projects.

Plans. These are the backbone of themanagement information system that isrequired for any project. PRINCE2 is veryconcerned with the different levels of planwhich need to be produced and theapprovals which are required before plansare put into action.

Risk. Since risk is such a fundamentalconsideration within the Business Case,PRINCE2 identifies Risk as a Theme in itsown right to assess and take relevant

action in respect of such uncertainties.

Change. Change in projects is inevitableso PRINCE2 defines procedures formanaging changes as they occur orbecome necessary. This can be aparticularly crucial element in a projectsince the rest of the project or otherprojects or perhaps a programme can beaffected by changes made within a project.This Theme also provides forConfiguration Management which may bethought of as asset control.

Progress. As important as it is to plan theproject it is equally important to know howthe project is progressing. When the‘actual state’ is known and compared tothe planned state, then control is possible.Each of these seven Themes is

considered in more detail in sessions 3and 4.

S2P11 – Activity

From the list shown, can you identify thePRINCE2 Principles?

Answer Feedback:

The seven PRINCE2 principles are:

• Continued Business Justification • Learn from Experience • Defined Roles and Responsibilities • Manage by Stages • Manage by Exception • Focus on Products • Tailor to suit the Project Environment

S2P12 – Key elements of PRINCE2 -Processes

PRINCE2 identifies seven Processes - the

first of these being Starting Up a Project.This is a set of pre-project activities whichset out to answer the question “Do wehave a worthwhile and viable pro ject?”,before seeking commitment of resources.

The process Directing a Project isprovided for the Project Board for thepurpose of decision making. Their firstformal decision uses Directing a Project atthe end of the Starting Up a Projectprocess.

Initiating a Project helps ensure that a firmbaseline exists for the project and thateveryone involved understands what theproject is seeking to achieve before anymajor commitment of resource.

Controlling a Stage is for the ProjectManager’s day-to-day activities, whichincludes authorising work, monitoringprogress, reporting to the Project Boardand reacting to unplanned events.

Managing Product Delivery is the main

workshop of the project and consumes themajority of the resources. Here the


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products of the project are created by theteams of specialist people under themanagement of Team Managers.

Managing a Stage Boundary enables theProject Manager to provide information to

the Project Board at key points so theycan decide whether to allow the project toproceed or to close it prematurely.

Finally, Closing a Project enables theProject Manager to execute a controlledand orderly close to the project, either atits natural end or at premature close. Oneof the outputs from this process will be aLessons Report, which can providevaluable information for future projects.

Planning is an important aspect of any

project as it provides everybody involvedin the project with information on what isrequired, how it will be achieved, whatresources will be used and when thingswill happen.

Planning is a repeatable process andplays an important role in many of theother processes. PRINCE2 gives guidanceon planning in the Plans Theme.

Principles, processes and themes need tobe integrated with the project environment.

This is known as ‘tailoring PRINCE2 to theproject environment,’ as PRINCE2 is not a‘one size fits all’ solution, it is a flexibleframework. Adopting PRINCE2 across anorganization is known as embedding,whilst using the processes and themes ina flexible manner to suit the project iscalled ‘tailoring’.

S2P13 – The PRINCE2 Manual

The PRINCE2 Manual was subjected to its

first major revision in 1998. The revisedmanual included greater coverage of howPRINCE2 applies within a multi-project orprogramme environment.

A more major re-structuring took place in2002, with the format of the book beingchanged and the order of presentationalso being amended.

A further revision took place in 2005 withmore changes to the sections and thetechnical details. A further version of the

manual was released in 2009.

Despite these changes the essentialcontent and approach remainsunchanged.

There are about 300 pages in the manualaltogether, the first 13 or so of which deal

with the contents listing and anintroduction to the book and to thePRINCE2 method.This is followed by the three main sectionsdealing in detail with the Principles, theThemes and the Processes.

The last 20 or so pages of the manual aretaken up with Tailoring PRINCE2 to theproject environment, Appendices,Checklists and Further information onwhere to go for additional help inunderstanding and implementing

PRINCE2.

S2P14 – The structure of a PRINCE2project

We have seen on the previous pages thatPRINCE2 has a very clearly definedstructure, so any project managed usingPRINCE2 must also have a definitestructure, with all PRINCE2 projectssharing certain characteristics.

For example, every PRINCE2 projectrelates to:

Change – every project introduces changeto the business.

Temporary – the project has a life-spanwhich ends when the final product isdelivered and accepted or the project hasnothing else to contribute.

Cross-functional – projects use peoplewith a variety of management and

technical skills and often cross boundariesof business functions and even crosscompany boundaries.

Unique – the change may introducecompletely new ways of working orintroduce the new technology to a newgroup of people. Either way there is adimension to it which is unique.

Uncertainty – with change comesuncertainty and that brings risk to theundertaking.


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In many projects the supplier comes fromwithin the customer organization and assuch will understand the way in whichPRINCE2 is embedded and therequirements for tailoring.

PRINCE2 is written from a customer’sperspective, as such when a commercialcustomer supplier environment exists,careful consideration needs to be given tothe way in which PRINCE2 is applied.

It should be recognized that there arelikely to be at least two sets of:

reasons for undertaking theproject

management systems

governance structures

and corporate cultures to beconsidered

In particular both the customer and thesupplier are likely to have a BusinessCase, both of which demonstratecontinued business justification. However,it is the customer’s business case thatdrives the project. Similar considerationsneed to be made for each PRINCE2theme. The processes may also requiretailoring especially Starting up a Projectand Initiating a Project, where the Supplier

may not have been selected.

S2P15 – The structure of a PRINCE2project

A PRINCE2 project is divided into anumber of Management Stages, eachforming a distinct unit for managementpurposes.

These Management Stages run insequence and do not overlap. They are

separated by decision points or StageBoundaries, enabling management toauthorise or prevent progress on to thenext stage.

The project stages correspond to thenatural steps in the project life-cycle. Thusthe stage boundaries are normally definedto correspond with the completion of majorproducts and key decisions concerningcommitment of resources.

PRINCE2 recognises that few projects are

ever undertaken entirely in isolation. Theoutput of one project may be used as the

input to another. A number of projects maybe sharing common resources.

In such a multi-project, or programmeenvironment, PRINCE2 provides amechanism for defining the boundary of

the project and its relationship to otherprojects.

S2P16 – Activity

Now see how you get on with a fewquestions.

Answer feedback:

The items listed are all PRINCE2processes.

S2P17 – Activity

Within a PRINCE2 project, is it allowablefor Management Stages to overlap andrun in parallel?

Answer feedback:

Management Stages are divisions of theproject into sequential periods of time,separated by key decision points, or Stage

Boundaries. They run in sequence and bydefinition cannot overlap.

S2P18 – Summary

This brings us to the end of session 2 onthe ‘overview and principles’ of PRINCE2’. In this session we have reviewed the basicconcepts behind PRINCE2, the structureof the method, the manual and PRINCE2projects themselves.

We started off by rationalising “work” into

several main aspects, methods,procedures, techniques and tools and welooked at the meaning and examples ofeach.We then saw how the PRINCE2 method ismade up of three key elements, Principles,Themes and Processes and we havebegun to examine the relationships whichexist between each of these threeelements.

In the following lessons we will beexamining each of these three elements in

some greater detail.


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Session 3 – PRINCE2 ThemesPart 1

S3P1 – Objectives

Hello. The subject of session 3 is

PRINCE2 Themes.

The PRINCE2 manual contains 7 themes.Here, in the first of two sessions on thesubject we will look at the Business Case,organization, Quality and Plans Themes inturn.

Once you have completed this sessionyou will;

Understand the significance of theBusiness Case in a PRINCE2 project.

Be familiar with the Organization Themeand the levels of organization suggestedby PRINCE2.

Be aware of the four inter-relatedelements of Quality, namely a QualitySystem, Quality Assurance, QualityPlanning and Quality Control

Understand the importance of planningin a PRINCE2 project.

S3P2 – Business Case

The first of the seven themes that thePRINCE2 manual describes is theBusiness Case.

It is a key philosophy of PRINCE2 that anyproject should be driven and underpinnedby a viable Business Case. Unless asatisfactory Business Case exists then aproject should not be started.

And if, during the course of a project,things happen that render the Business

Case for the project invalid, then theproject should be aborted. In any event,the Business Case for a project should beroutinely updated at each stage end.

The Business Case is a description of thereasons for the project and the justificationfor its undertaking. It should provide aclear statement of the benefits that areexpected from the project and the costs,risks and timescale that are entailed inachieving those benefits.

In PRINCE2 the Business Case isdeveloped at the start of a project andreviewed throughout the life of the project

(being reviewed by the Project Board ateach key decision point, such as end-stage assessments and exceptionassessments). The benefits are confirmedas they start to accrue, normally from theend of the project, but in some cases they

may accrue as the products are releasedto the user community, for example as partof a phased rollout of a product.

The Business Case presents the optimummix of information, which in turn enablesthe Project Board to judge whether theproject is:

• Desirable - that the cost/benefit/riskanalysis is valid,• Viable - that the project can deliver itsproducts, and

• Achievable - that the product canprovide the benefits.


The main sections that PRINCE2 suggestsshould be included in a Business Caseare:Executive Summary - this highlights thekey points in the Business Case, includingthe important benefits and the return oninvestment (or ROI).

Reasons - describes the reason for theproject, for example, the problem to beresolved or opportunity to be seized. Itshould also explain how the project willenable the achievement of corporatestrategies and achievements.

Business Options - this includes analysisand reasoned recommendation for thebase business options of ‘do nothing’, ‘dothe minimum’ or ‘do something’. Otheroptions may be included as required.

Expected Benefits - where the benefitsthat are expected to accrue from theproject are identified and described.These can be quantitative and measurableand qualitative and therefore harder tomeasure. Tolerances should be set foreach benefit and for the aggregatedbenefit. The requirements for benefitsrealization should also be stated.Expected Dis-benefits - are thoseoutcomes perceived as being negative byone or more of the stakeholders. For

example, a benefit could be a reducedoverhead, but fewer staff and lower morale


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could be considered a dis-benefit. Theseshould be valued and included in theinvestment appraisal.

Timescale - this refers to the actual projectduration, from the creation of the Project

Plan to the period of the benefitsrealization. This information feeds into thepreparation of the Project, Stage andBenefits Review Plan.


The Business Case should also includesections on:

Costs - a summary of the project costsfrom the Project Plan. Costs also include

the ongoing costs of operations,maintenance and their fundingarrangements.

Investment Appraisal - compares theaggregated benefits and dis-benefits withthe costs of the project and the ongoingoperational and maintenance costs. Thereare many techniques which could be usedto develop the investment appraisal, suchas return on investment, net present value,sensitivity analysis and so on. These arenot specified by PRINCE2.

And finally, Major Risks - a summary ofthe major risks associated with the projectshould also be included. It should includea view of the aggregated risk and ifappropriate, a summary risk profile.

S3P5 – Types of project

There are many reasons for undertaking aproject and their objectives and benefitswill be viewed differently. Some typical

examples include:

• A compulsory project - which is broughtabout by legislative changes.

• A not-for-profit project - which is drivenby a need to change procedures, improvemorale, increase efficiency and so on.Benefits on such projects are often lesstangible.

• A research and development projectwhere the outcomes are not known and

the benefits are speculative can beconsidered as an Evolving Project.

• A customer/supplier project - whichtypically focuses on product developmentinvolving the customer and the supplier,where the benefits are expected to betangible.

• And finally a multi-organization project -the Business Case here may be verycomplex and cover a wide range of factorsassociated with the partners in the project.In any event the project’s Business Caseis owned by the Executive. The SeniorUser is responsible for ensuring theoutcome and benefits are realised afterthe product has been released.

S3P6 – Business Case Development

It is the Executive’s responsibility toensure that the project’s objectives, costs,and benefits are aligned with the businessstrategy or programme objectives.

The Project Mandate should contain somebasic elements of the Business Case, butat this stage things may be quite sketchyand incomplete.

During the Starting Up a Project processthe information from the Project Mandateis used to develop the information required

for the outline Business Case. At thisstage the aim is to bring the BusinessCase up to basic level, sufficient to allowthe Project Board to give approval toinitiate the project during the Directing aProject process.

The Initiating a Project process is wherethe detailed Business Case is fullydeveloped. It will form part of the ProjectInitiation Documentation and is derivedfrom the outline Business Case, ProjectPlan (including costs, timescales and

products) and the Risk Register.

The Project Board in Directing a Projectwill use the detailed Business Case aspart of their considerations whenauthorising the project.

S3P7 – Business Case Development

In PRINCE2 we differentiate betweenoutputs, outcomes and benefits. An outputis any of the project’s specialist products

which when implemented and used willresult in outcomes and in turn these result


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in measurable improvements, known asbenefits. For example, the product may bea new accounting system, the outcome isthat invoices are processed moreaccurately and the benefit is a costreduction of 10%.

The Business Case will evolve over timeas more becomes known about theproject, its products and the estimates ofcost, time and benefits. Consequently theBusiness Case must be reviewed by theProject Board.

• At the end of Starting Up a Project inorder to authorize the initiation of theproject

• At the end of the Initiating a Project

process in order to authorize the project

• At the end of each stage to authorize thenext stage and the continuation of theproject

• In tandem with the Exception Plan inorder to authorize the revised stage andthe continuation of the project in the eventof an exception at Stage or Project level.The Business Case is also reviewed bythe Project Manager.

• As part of the impact assessment of anynew issues or risks.

• At the end of each stage to determine ifany of the costs, timescales, risks andbenefits need to be updated.

• During the final stage to assess theproject’s performance against itsrequirements and the likelihood that theoutcome will realise the benefits.

The Business Case will also be reviewed

as part of the benefits review. This is todetermine whether the project outcomeshave successfully realized the expectedbenefits.

Finally, it may be necessary to tailor theBusiness Case if the project is part of aprogramme. For example the projectBusiness Case may be aggregated intothe overall programme Business Case andmay be reduced in content. On otheroccasions the programme may provide theBusiness Case for the project.

S3P8 – Organization

Of all the factors that determine whether aproject succeeds or fails, Organization andStaffing are undoubtedly amongst themost important.

If all the project staff are technicallycompetent, well informed, and have theright level of leadership and motivationthen the chances of success will be high.

Here we will take a closer look at theOrganization Theme. PRINCE2 assumesthat projects take place in a Customer-Supplier environment. The customerdefines the requirement, pays for theproject and uses the eventual products.The supplier provides the required skills

and know-how to create the end-productsfor the customer.

This Customer-Supplier approach is thencombined with PRINCE2’s other primaryfocus - the need for a sound BusinessCase for the project.

It is these three interests that form thebasis for the management structure thatPRINCE2 proposes.

S3P9 – Levels of Organization

Within any project there will be a numberof stakeholders, some of whom will not bepart of the project management team buttheir views still need to be considered bythe project’s decision makers. ThePRINCE2 organization theme provides astructure that enables all stakeholderviews to be represented.

There are four basic levels of organization. At the highest level we have Corporate or

Programme Management which sitsoutside the project management team andis responsible for commissioning theproject, identifying the Executive anddefining the project level tolerances withinwhich the Project Board will work.

The next level is Directing - and relates tothe activities of the Project Board. This iswhere the major decisions about the futureof the project are made.

The Managing level includes the day-to-

day activities of the Project Manager. TheProject Manager’s main responsibility is to


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produce the right products at the righttime, on budget and to the requiredstandard.

Finally, the Delivering level is where thework is undertaken to build or develop the

products of the project.

S3P10 – The Project Board

The focal point of the PRINCE2 projectmanagement organizational structure isthe Project Board.

The Project Board is the overall authorityfor the project and is responsible for itsinitiation, direction, review and eventualclosure. We will see in the Processes

session how the Project Board carry outmost of their work via Directing a Project.

Within the confines of the project, theProject Board is the highest authority,responding only to a corporate strategybody, such as a Board of Directors.

PRINCE2 identifies this top-level body asCorporate or Programme Managementand it is from here that the ProjectMandate is handed down in order to Start-Up a Project.

The Project Board should represent thethree interests discussed - namely theUser, the Supplier and the Businessinterests.

In order to achieve this, three roles arespecified - the Senior User, representingthe user interest; the Senior Supplierrepresenting the supplier interest and theExecutive, representing the overallbusiness interest.

The important point here is that these areroles - not job titles or individuals. Theroles can be combined or shared and thenames can be changed as appropriate tomake them more understandable topeople within your particular organization.

The main concern of PRINCE2 here is thata Project Board exists and that the threeinterests are properly represented by thatBoard.

In small projects it may be desirable to

combine roles, for example, the Businessinterest and User interest may be

represented by one person fulfilling tworoles - Executive and Senior User.

At the other end of the scale, in very largeprojects, each role may require a team ofpeople to adequately represent it.


Given that it is permissible to combineroles, what do you think is the minimumnumber of people which should ever makeup the Project Board?

Answer feedback:

One of the main responsibilities of theExecutive is to represent the customer’s

interests and so it is quite acceptable tocombine the Executive and Senior Userroles under one person.

The Executive and Senior Supplier mayalso be combined, though this is far lesscommon.

However, it is not at all advisable tocombine the Senior User and SeniorSupplier roles, as there may be questionsof confidentiality or conflicts of interest.

So under any normal circumstances, theminimum number of people on the ProjectBoard would be two.

S3P12 - The Project Board

Each of the three Project Board roles hasvery clearly defined responsibilities.The Executive is the key role and isultimately responsible for the entireproject, supported by the other two roles.

The Executive ‘owns’ the Business Casefor the project and has to ensure that theproject is delivering value for the time andresources being invested.

It is normally the Executive who chairs theProject Board meetings and resolution ofconflicts is very much a part of this role.

Where the project is part of a programme,the Programme Director appoints theExecutive and has the option of appointingthe other Project Board members or

delegating their appointment to theExecutive.


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The Senior User role represents theinterests of all those who will use or beaffected by the project and its products.

The responsibility of the Senior User startswith the specification of user needs and

commitment of user resources. A veryimportant responsibility of the Senior Useris the identification and realisation ofbenefits. This means the Senior User’sresponsibility is likely to continue into theoperational environment and beyond thelifetime of the project.

As work progresses, it is the Senior User’sresponsibility to monitor what is beingproduced and ensure that it will meet userneeds and that the expected benefits arematerialised.

In very many cases the Senior User rolewill require several individuals toadequately represent all the user interests.

The Senior Supplier role is there torepresent the interests of those designing,developing, facilitating, procuring andimplementing the project’s products.

It is quite common for the Senior Supplierrole to be filled by a person or peopleexternal to the organization, although it

could be a representative from an internalsupplier department or someoneresponsible for contracts with externalsuppliers.


Ensuring that the project is delivering theright products, to the correct specificationis the responsibility of which Project Boardrole?

Answer feedback:

This is the responsibility of the SeniorUser.


Who would normally chair the ProjectBoard meetings?

Answer feedback:

The Executive is ultimately responsible for

the project and would normally act as chairfor Project Board meetings.


Would you say this statement is true orfalse?

Answer feedback:

All three Project Board roles aremandatory.

S3P16 – The Project Manager

We have seen that in the majority ofcases, Project Board members will workpart-time on the project, and they will oftenhave many other commitments to attendto.

Because of this, PRINCE2 defines a fourthmandatory role, that of the ProjectManager.It is the responsibility of the ProjectManager to plan and oversee all of theday-to-day work and to ensure that theproject is producing the right products, atthe right time, to the right standards ofquality and within the allotted budget.

Unlike the Project Board roles, the ProjectManager role always relates to a singleperson.

On large projects, the volume of work anddemands for specialist knowledge may

justify the appointment of Team Managersto support the Project Manager in themanagement and control of specifictechnical stages.

The main tasks of the Project Managerinclude overall planning for the wholeproject, motivation and leadership ofproject staff, liaison with ProgrammeManagement over related projects,

definition of responsibilities for specialistTeam Managers and reporting progress tothe Project Board.

In summary, the Project Manager is thereto ensure that a result is achieved whichmakes it possible to realise the benefitsdescribed in the Project InitiationDocumentation.

S3P17 – Team Manager/s

The appointment of separate people in therole of Team Manager is optional,


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depending on the nature and demands ofthe project.

Where they do exist, it is the responsibilityof the Team Manager to manage thecreation and delivery of the specialist work

packages and products under their control,as defined by the Project Manager.

The Team Manager will work with theProject Manager to define responsibilitiesfor the team members and provideplanning and leadership.

Any suggested changes to the productsfor which a Team Manager is responsiblewill be raised as issues and sent to theProject Manager for a decision on furtheraction.

One of the tasks of a Team Manager is toattend, and usually run, checkpointmeetings to raise Checkpoint Reports forthe Project Manager. It is on the basis ofthese that the Project Manager thenprovides regular Highlight Reports to theProject Board.

S3P18 – Team Manager/s

Would you say this statement is true or

false?

Answer feedback:

The job of the Project Manager and theTeam Manager is to manage the work, notto actually do it. In most cases the teammembers will have very specialisedknowledge and skills and it would not bepossible or desirable for either the ProjectManager or Team Manager to carry outsuch specialised work.

It can happen that the Project Manager orTeam Manager does have some particularspecialist skill and also fulfils a technicalrole, but that is an additional role and notpart of the management role which is theirprimary function.

S3P19 – Project Support

All projects have a requirement foradministration and this is known inPRINCE2 as Project Support. It is not an

optional role as these support activitiesmust be undertaken, however, in larger

projects a separate person or group ofpeople are often appointed to the ProjectSupport role. This enables the ProjectManager to concentrate on themanagement of the project instead ofgetting bogged down in the administration

activities.

Many large organizations may alreadyhave a Project Support Office, in whichcase there will be little need for change asthey will already be providing ProjectSupport facilities.

Some of the main tasks that are normallycarried out by the Project Support functionwill include:

Setting up and maintaining project

documentation and the projectfiling system.

Updating plans and assessing theimpact of changes.

Defining and maintaining projectmanagement standards.

Configuration Management andChange Control.

Taking minutes at meetings andcompiling reports.

S3P20 – Project Assurance

The Project Board members do not workfull-time on the project, therefore theyplace a great deal of reliance on theProject Manager.

Although they receive regular reports fromthe Project Manager, there may always bequestions at the back of their minds - ‘Arethings really going as well as we are beingtold?’, ‘Are any problems being hiddenfrom us?’, ‘Is the solution going to be whatwe want?’, ‘Are we suddenly going to findthat the project is over-budget or late?’, ’Isthe Quality System being adhered to?’

All of these questions mean that there is aneed in the project organization for ameans of assessing all aspects of theproject’s performance and products whichis independent of the Project Manager.This is the Project Assurance function.

Project Assurance is mandatory andPRINCE2 separates the Project

Assurance function from Project Support.Each Board Member has their own set ofresponsibilities for Project Assurance so it


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is split into Business, User and Supplier Assurance. Each Board Member may, ifthey wish, delegate some or all of theirresponsibilities for Assurance to a thirdparty, however assurance responsibilitiescannot be assigned to the Project

Manager.

In cases where a Project Support Office isproviding both Project Support and Project

Assurance, great care must be taken todraw a clear distinction between the workbeing carried out for the Project Manager,and the assurance functions which arecarried out on behalf of the Project Board.

A final role to consider here is that of theChange Authority. This is the person orgroup of people responsible for agreeing

to changes to the requirements or scopeof the project. By default this responsibilitylies with the Project Board but they may, ifthey wish, delegate it to another body.Typically, the Project Manager would havelimited responsibility to agree certainchanges so that the project could progresssmoothly. The limits of authority and theescalation process for changes outsidethese boundaries needs carefulconsideration during project initiation.

S3P21 – Organization

So what we now have is a picture of aproject management organization, asdefined by PRINCE2, with the roles thatcan optionally have separate peopleappointed to them highlighted as shown.Remember that all roles must be filled – none of the roles are optional.

It is important to realise that this structureis only temporary and will exist only for theduration of the project.

In very many cases the project will existalongside many other projects, making upa Corporate Programme.

In such circumstances there may be aneed to vary some of the relationships,particularly with respect to Project Supportand Project Resources, where theprogramme may provide some assistance.

S3P22 – Quality in a ProjectEnvironment

PRINCE2 defines quality in terms of theattributes that make a product or service‘fit for the purpose of satisfying STATED

needs’. Here we will look at Quality whichis the third PRINCE2 Theme.

Within a project environment the main aimof Quality Management is to ensure thatthe products that are produced are fit fortheir intended purpose and satisfy theneeds and expectations of the Customer.

Such quality expectations must bereflected throughout the PRINCE2 projectenvironment. Ideally they will be statedright at the start in the Project mandate,

included in the Project Brief and thenexpanded in the Project InitiationDocumentation. From there on, quality is atheme that is prominent throughout thelifecycle of the whole project.

There are four inter-related elementswhich make up quality management: aquality system, quality assurance, qualityplanning and quality control. Theseelements support the PRINCE2 principleof ‘learn from experience’ by helping toidentify and eliminate causes of

unsatisfactory performance. For example,the Lessons Log may identify that amanufacturing process contains a flawwhich can be corrected in futureproduction runs.


PRINCE2 will typically form part of acorporate or programme quality system,where it has been adopted as a corporate

or programme standard.

Such systems lay down standards for thedocumentation of processes andprocedures, to ensure the delivery of aconsistent level of quality.

The main tangible evidence of acompany’s Quality Management Systemwill be the Quality Manual, which shouldstart with a clear statement of thecompany’s Quality Policy, as defined bysenior management.


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The Quality Manual should then go on todocument the organization structure andall of the processes and procedures whichgo on within the organization and whichhave a baring on the ability to deliverquality.


Do you think this statement is true orfalse?

Answer feedback:

Quality is a theme that is prominentthroughout the life of the whole project.


The Quality Assurance function isresponsible for setting up and maintainingthe Quality Management System.

Quality Assurance ensures everythingwhich goes on within an organization is inline with laid down procedures and that theend products satisfy the relevant qualitystandards.

Do you think the Quality Assurancefunction should be external or internal tothe project management function?

Answer feedback:

In many large organizations there will be acorporate quality assurance function thataudits all the other departments to ensurethat they are adhering to the QualityManagement System.

This gives quality assurance a degree ofindependence that is essential toobjectivity.

One of the roles of the corporate qualityassurance function is to ensure thatprojects are being run in accordance withthe method and procedures laid down inthe Quality System.

If a corporate quality assurance functiondoes not exist then quality assurance forprojects will normally be included in the

role of Project Assurance.


On the other hand, Quality Planning andQuality Control for projects are very muchthe responsibility of project management.

Quality Planning establishes the objectivesand requirements for quality and lays outthe overall approach to quality in theQuality Management Strategy during theInitiation Stage. Quality planning alsoincludes establishing the activities that areneeded within a Stage to ensure thatquality is achieved.

It is important that the customer’s qualityexpectations are fully understood anddocumented prior to the project

commencing. This is documented in theProject Brief. The quality approach for thewhole project is defined in the QualityManagement Strategy which forms part ofthe Project Initiation Documentation.

Quality Control is the means of ensuringthat products meet the quality criteriaspecified for them. Quality control is aboutexamining products to determine that theymeet requirements and so normally takesplace after some work has been done.There are basically two types of quality

method, which are as follows:

• ‘In-process’, where specialist methodsare used in the creation of the productsand ongoing quality inspections, and

• ‘Appraisal’ methods where the finishedproducts are assessed for completeness.Testing is carried out where the qualitycriteria are objective and measurable andquality inspection methods are used wheresome subjective judgement is required.Within PRINCE2 the quality review

technique is suggested whichcomplements the use of productdescriptions.


What is the difference between Quality Assurance and Quality Control?

Answer feedback:

Quality Assurance is all about settingstandards and processes and ensuring


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that they are followed; whereas QualityControl is more to do with inspection offinished goods to ensure they meetspecification.

S3P28 – Quality Audit Trail

Quality planning begins by establishing theCustomer’s Quality Expectations. Theseare a key input in identifying the qualityrequirements for the project’s products.

Any standards that need to me appliedand any measures that may be used toassess whether the products meet therequirements will also need to beidentified.

Customer Quality Expectations are usually

expressed in broad terms and will need tobe discussed and evaluated in order todefine measurable acceptance criteria.

Acceptance criteria form a measurabledefinition of the attributes that will betested in order to define whether a productis ‘fit for purpose’.

Based on discussion with the customerabout the quality expectations andacceptance criteria, the project’s ProductDescription is defined. This is part of the

initial scoping activity and includes:

• Overall purpose of the product • The products it consists of• The customer’s quality expectations • The acceptance criteria • Project level quality tolerance

S3P29 – Quality Review Technique

During the Initiating a Project process theQuality Management Strategy is defined.

This describes how any QualityManagement Systems in thecustomer/supplier environment will beapplied, along with any applicablestandards. Also included are anyresponsibilities for quality including asummary of the approach to Project

Assurance, along with a description of anytailoring which may be required.

Product Descriptions are mandatory, butthe level of detail to be included is a matterof judgement. The aim is to provide

enough detail so that the team membersare able to build the products to the right

standards. Product Descriptions containthe quality specifications for the productand the methods by which this will be

judged.

Finally the last part of the quality planning

activity is to create the Quality Register,which provides an audit trail of the qualityevents planned and undertaken.

As the products are built they are testedusing an appropriate control technique,such as the Quality Review Technique,described in PRINCE2.


A Quality Review is where a team ofqualified people get together with the

express purpose of checking a completedproduct for errors.

A Quality Review can be invoked at anypoint within a project, since any productcan be the subject of a review.

Quality Reviews will most typically becarried out in the Managing ProductDelivery process as the product iscompleted. The quality criteria, asdocumented in the Product Description,will be used by the reviewers to ensure

that the right quality standards have beenmet.

Among the main benefits which QualityReviews offer are a structured andorganized approach to the examination ofsubjective quality criteria and the earlyidentification of defects.

The objectives of a Quality Review are:

• To assess the conformity of a product.This will typically take the form of a

document (or similar item) against setcriteria• To involve key interested parties inchecking the product’s quality andproviding wider acceptance of the product• To provide confirmation that the productis complete and ready for approval, andfinally• To baseline the product for changecontrol


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There are three basic steps in the QualityReview procedure, these are ReviewPreparation, Review Meeting Agenda andReview Follow-up.

Review Preparation involves confirmingwhere and when the meeting will takeplace and who will attend. A copy of theproduct for review should be distributed toattendees (if this is possible), and theproduct should be assessed against thequality criteria and a question list shouldbe produced to send to the producer.

Review Meeting Agenda, involves thediscussion and clarification of any majorerrors, agreement on appropriate actions,

agreement on the outcome of QualityReview, sign-off of the product (ifappropriate) and documentation of actionsand responsibilities.

The results of a Quality Review willnormally be that the product isconsidered…

• Complete - the product is fit forpurpose,

• Conditionally complete - the product isfit for purpose subject to the actions

being completed, or• Incomplete - the product requires

another review cycle.

Review Follow-Up activities will usuallyinvolve completing the actions andcommunicating the results appropriately tomanagement and storing the recordsproduced during the review.

Once the Quality Review is complete theproduct is approved by the appropriatemanagement person or group.


The roles involved in the Quality Reviewprocess are:

The Chair - who is responsible forconducting the review.

The Presenter - who is responsible forintroducing the product to the reviewers?The Presenter represents the producers of

the product.

The Reviewer, who, as the namesuggests, is responsible for reviewing theproduct.

The Administrator, who providesadministrative support to the chair and

records results and any recommendedactions.

It is important to note that these are roles,not necessarily people. As such theminimum number of people who couldcarry out a review would be two, onetaking the Chair and Reviewer roles andthe other taking the Presenter and

Administrator roles.



Answer feedback:

It is important to understand that QualityReview meetings are set up to identifyerrors, not to correct them. The people inthe review meeting may not be the bestqualified to determine solutions to anyerrors found so any solutions suggestedduring the review meeting should be noted

for later consideration by the appropriatespecialist.



Answer feedback:

This would be a disastrous approach totake. Quality Review meetings must take

place in an atmosphere which is free ofboth ego and fear. The purpose of theprocess is to assess the product not theproducer and if the producer thinksotherwise they may well become overlydefensive and objectivity will be lost.

S3P35 – Plans

Now let’s move on to the next PRINCE2Theme - Plans.


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Effective project management relies oneffective planning because without a planthere is no control. Planning provides allthe people involved in the project withinformation on:

• What is required?• How it will be achieved and by whom• When events will happen• Whether the targets for time, cost,

quality, scope, risk and benefits areachievable

There is much misunderstanding aboutexactly what constitutes a plan. Manypeople would look at a Gantt chart, forexample, and consider it to be a completeproject plan.

A PRINCE2 plan is much morecomprehensive than that and, amongstother things, should state: what has to beproduced, what has to be done to produceit, what has to be done to make sure it isproduced correctly, when will it beproduced, how progress will be monitoredand what has to be done to control risks.

There will typically be up to 3 planninglevels within PRINCE2. These are ProjectPlans, Stage Plans and Team Plans. ThePRINCE2 approach to plans defines

seven steps, which are often usediteratively. These steps can be used ateach level of plan.

S3P36 – Project Plans

The Project Plan is created during theInitiating a Project process, with theInitiation Stage Plan being producedduring Starting Up a Project. Subsequentdelivery Stage Plans are produced withinManaging a Stage Boundary.

The Project Plan provides a statement ofhow and when a project’s time, cost,scope and quality targets are to beachieved.

It identifies the major products, activitiesand resources required for the project.The Project Plan also:

• Provides the Business Case withplanned costs and timescales• Identifies major control points such as

management stages and milestones

The Project Plan is used by the ProjectBoard as a baseline against which tomonitor progress stage by stage. It shouldalign with the corporate or programmemanagement’s plan.

S3P37 – Stage Plans

Stage Plans are similar to the Project Planin content, but each element will be brokendown to the level of detail required to bean adequate basis for day-to-day controlby the Project Manager. A Stage Plan isrequired for each management stage.

Each Stage Plan is finalised near to theend of the previous stage. This approachshould give more confidence in the plan

because: the Stage Plan is produced closeto the time when the planned events willtake place, the Stage Plan is for a muchshorter duration than the Project Plan andthe Stage Plan is developed with thebenefit of hindsight of the performance ofearlier stages.

S3P38 – Team Plans

Depending on the complexity of the projectand the amount of resources required the

Team Manager may produce Team Plans.

Team Plans are regarded as optional. Assuch PRINCE2 does not prescribe aformat for them as there may be morethan one team on a project, possibly fromdifferent organizations and hence theymay have different planning standards.

Team Managers produce Team Plans inparallel with the production of a StagePlan, or when a work package has beenaccepted, during the Managing Product

Delivery process.

S3P39 – Exception Plans

When it is predicted that a plan will nolonger finish within the agreed tolerances,an Exception Plan may be produced toreplace that plan.

An Exception Plan is prepared at the samelevel of detail as the plan it replaces ateither Project or Stage level. Once an

Exception Plan has been approved it


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becomes the new baselined Project Planor Stage Plan as appropriate.

An Exception Plan picks up from thecurrent plan’s actuals and continues to theend of that plan.

Exception Plans are not produced at teamlevel. Should a work package be forecastto exceed its tolerances then provided itcan be resolved within the stagetolerances, the Project Manager willamend or replace the work package inquestion.Exception Plans require the approval ofthe Project Board if they replace a StagePlan or by corporate or programmemanagement if they replace the ProjectPlan.

S3P40 – Plans

From the list shown can you identify the‘seven steps in the PRINCE2 approach toplans’?

Answer feedback:

There are seven steps in the planningprocedure and they are used on aniterative basis, as often as required, to

form original plans or amend plans ascircumstances dictate.‘Design the plan’ is the first step, where wedecide how we will undertake planning forthis project after which we move on to‘define and analyze the products’ whereproduct based planning is used todetermine the products we are going tobuild.Once these are understood we canidentify the activities need to make themand the order in which these will takeplace. This is the third step.

The effort and time required to undertakethe activities is considered next after whichwe can prepare the schedule, often in theform of a bar or Gantt chart.Whilst we are doing all this we will have toanalyze the risks and incorporate ouractions into the plan. Finally we willdocument the plan so the readerunderstands what the plan covers, theassumptions we have made and so forth.

S3P41 – Product Based Planning

According to the traditional way ofplanning projects, the starting point was todecide on all the activities that wereneeded to complete the project.

PRINCE2, quite sensibly, says that abetter starting point is to determine andfully understand all the products (ordeliverables, as they are often referred to)which the project is to create. Having donethat, it will be much easier to identify andplan the activities necessary to createthem.

The product-based planning technique isclosely allied to the Plans theme and itconsists of four main steps:

• Writing the Project ProductDescription

• Producing a Product BreakdownStructure

• Writing Product Descriptions for allidentified products, and

• Producing a Product Flow Diagram

A product, in PRINCE2 terms, is anythingthat is produced by, or on the way througha project. So in referring to products wedon’t just mean the physical and tangibleentities that make up the final deliverable.

Also included are all the items ofpaperwork, reports and controlmechanisms that have to be produceddur ing the course of a project’s lifetime toensure that the project is managedcorrectly. These are classified as“baseline” products such as the BusinessCase or Plan, “records” such as theRegisters, or “reports” such as theCheckpoint or End Project Reports.These are all found within Appendix A ofthe PRINCE2 manual.


Suppose the project is to build a house.From the list shown, can you identify thoseitems that you think would be classed asproject products?

Answer feedback:

Well, all of these could legitimately beclassed as products.


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It is very rare in a project for work to beginimmediately on the final end-product. Moreoften, interim products have to beproduced on which the final product will bebased.

A product is therefore defined as anythingthat is produced by, or on the way through,the project, which can be identified,described and is tangible and measurable.


The Product breakdown structure (or PBS)is very similar in concept to the workbreakdown structure with which you mayalready be familiar.

The idea is to take a top-down view of all

the products which the project is going togenerate, starting at the top with thefinished deliverable or ‘outcome’ of theproject and then breaking each productdown into its constituent components in ahierarchical structure.

However, before we can do this a projectProduct Description should be written. TheSenior User is responsible for specifyingthe project product. However in practicethe Project Manager will often completethe project product description in

conjunction with the Senior User and theExecutive. This will provide the high levelscope of the project, which in turn, willenable the top levels of the productbreakdown structure to be completed.


Imagine you were the Project Managerbuilding the Channel Tunnel. You wouldwant to start the project by drawing up avery high-level product breakdownstructure.

We have already filled in the top levelproduct, which is the finished andoperational tunnel.

What do you think would be reasonablemajor sub-products for this project?

There are no right or wrong answers here.Even in real life, how you design yourProduct Breakdown Structures is entirelydown to your own preferences and theneeds of the project. The aim here is justto practice thinking in terms of project

products.

Once you are happy with the appearanceof your Product Breakdown Structure, clickon the Submit button to view our attemptat this one.


A Product Breakdown Structure is ahierarchical breakdown of the project’sproducts. PRINCE2 does not prescribeany format for these – it could be a simpleindented list, a mind map, or adiagrammatic structure. It will all dependon your organizational preferences.

There will often be products that alreadyexist or will be provided from outside theproject. These are known as externalproducts. As external products are

outside the control of the Project Managerthey should be documented in the RiskRegister. Details should include any threatto the plan if the external products are lateor not to the required specification.

It is also useful to consider whether‘states’ of products should be on the PBS,for example, dismantled, moved andassembled machinery. An alternativewould be to describe these states within asingle Product Description.

Product Breakdown Structures are used atProject and Stage Plan levels and areoptional for Team Plans.


Key benefits of Product Based Planninginclude, clearly and consistently identifyingproducts. This reduces the risk ofoverlooking key aspects of the project.Product Based Planning helps removeambiguity and involves users in specifying

the product requirements which in turn canimprove communication.

It also helps to:

• Clarify the scope boundary • Identify external products and thereforeassociate risks• Create a basis for work packages forsuppliers• Gain agreement on production, reviewand approval responsibilities


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Who do you think should write ProductDescriptions?

Answer feedback:

The Project Manager or Team Managershould write Product Descriptions. AsProject Manager you would haveresponsibility for ensuring that adequateproduct descriptions are produced.However, it is wise to involve people fromthe areas with expertise in the product inquestion.

It is especially important to involve Usersor Customers in writing productdescriptions and defining quality criteria.

All too often customers can ask for onething, believing their request to be quitestraightforward, but misinterpretationmeans that they end up with somethingquite different from what they expected.

By getting them to assist and then ‘sign-off’ the product description, you could saveyourself from the expense andembarrassment of producing a productthat nobody wants.


PRINCE2 recommends the main headingsthat should be included in a ProductDescription as shown:

Identifier - A unique key, most likelyallocated by the configurationmanagement method being used

Title - The name by which the product isknown

Purpose - Why do we need this product?

Composition - What are the componentsthat will make up the product?

Derivation - From what is the productgoing to be produced or from where will itbe obtained?

Format and Presentation - How will theproduct be presented and what will itactually look like?

Development skills required - Whichindividual, group or skill types will beneeded to create the product?

Quality Criteria - What criteria must theproduct meet for it to be judged ‘fit for

purpose?’

Quality Tolerance - Is there a range inquality criteria within which the productwould be acceptable?

Quality Method - How will the qualityassessment be made?

Quality Skills Required - Who is qualifiedto check the quality of this product andwhat skills will be required?

Quality Responsibilities - Identifying theProducer, Reviewers and Approvers forthe product.


Once a complete understanding of therequired products of a project has beenachieved, attention needs to focus on thesequence in which those products need tobe created.

Product Flow Diagrams are the technique

used to show the order in which productsmust be created and, based on this, it thenbecomes relatively straightforward toproduce a schedule of all the activities thatare required for the project.

A Product Flow Diagram generally uses arectangle to represent the project’sproducts. Other symbols may also beused, for example an ellipse or circle maybe used to represent an external product.

Arrows are used to show their sequence.Time flows in only one direction, either

from top to bottom or left to right.

The starting point for the Product FlowDiagram will be the product or productsthat are available right at the start of theproject and the end will be the finaldeliverable of the whole project. Where nosingle starting product exists, you may findit useful to create a starting point - thiscould be just a symbol, for example,‘Start’. Note, this does not appear on aProduct Breakdown Structure.


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Referring back to the Channel Tunnelexample, we can see from the ProductBreakdown Structure for the s

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