What is a project?
PRINCE2 defines a project as a temporary organization that is created for the purpose of delivering one or more business products according to an agreed business case. Two ideas sit inside that definition: a project is temporary (it is set up and then disbanded), and it exists to deliver products that are justified by a business case.
Project management is the application of methods, tools, techniques and competencies to a project. In practice it means planning, delegating, monitoring, controlling and motivating people so that the project delivers what was agreed.
Characteristics of a project
Five characteristics distinguish project work from business as usual:
- Change – projects are the means by which an organization introduces change.
- Temporary – when the desired change has been implemented, business as usual resumes (in its new form) and the need for the project is removed. A project does not carry on operating what it created.
- Cross-functional – projects often work across the usual functional divisions within an organization and sometimes span different organizations. A question about teams from different organizations working together is testing this characteristic.
- Unique – even when an organization runs many similar projects, each one differs in some way: a different team, customer, supplier, location or timeframe.
- Uncertainty – the other characteristics introduce threats and opportunities beyond those normally met in business as usual, so projects are riskier than business as usual, not less risky.
Why project management is used
Because projects are temporary, cross-functional, unique and uncertain, normal line management arrangements are not enough to control them. Project management keeps the work under control across the aspects of performance below. PRINCE2 addresses these challenges with a common language, clear roles, a controlled lifecycle and a focus on products and business justification.
The seven aspects of project performance
PRINCE2 identifies seven aspects of project performance that must be managed:
- Benefits
- Cost
- Time
- Quality
- Scope
- Risk
- Sustainability
Sustainability is a full performance aspect in PRINCE2 7, alongside the other six. These seven aspects are also the areas against which tolerances are set later in the method.
What PRINCE2 does not cover
PRINCE2 excludes detailed specialist techniques and specialist aspects of the work. It can be combined with whatever specialist techniques a project needs, but it does not prescribe them.
The five integrated elements
PRINCE2 is built from five integrated elements:
- Principles – guiding obligations that ensure effective application and tailoring of PRINCE2 to any project.
- People – those working on the project and those affected by it. Understanding their needs, capabilities, motivations and relationships is crucial to how the project is set up and run.
- Practices – aspects of project management that must be continually addressed throughout the lifecycle: business case, organizing, plans, quality, risk, issues and progress.
- Processes – seven processes describing the whole lifecycle, from activities before the project starts, through the stages of delivery, to final closure. Each process has recommended activities and related responsibilities.
- Project context – the setting in which the project runs. It influences how the principles, practices and processes are applied by the people involved, so that the method is fit for the project. Context factors include the project's scale, the organizational context, the commercial context, the delivery method and sustainability.
There are five elements, not four.
Users, suppliers and the business
Every PRINCE2 project has three interests:
- a user, who specifies the desired outputs;
- a supplier, who provides the resources and expertise to deliver the products;
- the business, which provides the project mandate and the structure for project governance.
Projects also sit inside a wider organizational context, and may form part of a portfolio or a programme.
Delivery approaches
PRINCE2 recognizes three delivery approaches:
- Linear-sequential – the delivery steps occur in sequence, and the product is made available during or at the end of the project. Example: a construction project where requirements gathering and design are completed before construction starts.
- Iterative-incremental – the delivery steps (for example, requirements, design, development and testing) occur iteratively throughout the project. This is often referred to as an agile approach.
- Hybrid – some elements of the project use a linear-sequential approach and others use an iterative-incremental approach, for example building infrastructure sequentially and then developing a customer portal iteratively.
Be careful not to confuse delivery approaches with controls: "event-driven" describes a type of control, not a delivery approach.
An overview of the PRINCE2 processes
The seven processes are starting up a project, directing a project, initiating a project, controlling a stage, managing product delivery, managing a stage boundary and closing a project. A few structural rules are worth knowing now:
- Starting up a project happens pre-project and is used by both the directing and the managing levels.
- A project has at least two stages, and the initiation stage always comes first.
- The first use of managing a stage boundary comes as initiation ends, when the next stage is planned. It recurs at the close of every later stage apart from the final one, and it can also be used at any point to prepare an exception plan.
Features and benefits of PRINCE2
PRINCE2 is universal, flexible, proven and outcome focused. It provides a common language and concepts, supports increased organizational maturity, and is part of an integrated suite of methods.