Notes to accompany Prince 2 Process Slides

Introduction to PRINCE2
PRINCE2 is a structured project management method based on the experience of scores
of project managers, who have contributed, some from their mistakes or omissions,
others from their success.
PRINCE2 has a process-based approach to project management. The processes define the
management activities to be carried out during the project. In addition, PRINCE2
describes a number of components that are applied within the appropriate activities.

The Processes
The PRINCE2 process model consists of eight distinctive management processes
covering the activities from setting the project off on the right track, through controlling
and managing the projects progress, to the completion of the project. The common
Planning (PL) process is used by four of the other processes.
Any project run under PRINCE2 will need to address each of these processes in some
form. However, the key to successful use of the process model, is in tailoring it to the
needs of the individual project. Each process should be approached with the question:
How extensively should this process be applied to this project?
The eight processes are:

Starting up a Project (SU)

Directing a Project (DP)

Initiating a Project (IP)

Managing Stage Boundaries (SB)

Controlling a Stage (CS)

Managing Product Delivery (MP)

Closing a Project (CP)

Planning (PL)

www.executive-development.co.uk

Notes to accompany Prince 2 Process Slides

The Components
The eight components that are applied as appropriate to each of the processes are:

The Business Case. The existence of a viable Business Case is the main
control condition of a PRINCE2 project. The Business Case is verified by the
Project Board before a project begins and at every major decision point
throughout the project. The project should be stopped if the viability of the
Business Case disappears for any reason.

Organisation. PRINCE2 provides a structure of a project management team

and a definition of the responsibilities and relationships of all roles involved in
the project. According to the size and complexity of a project, these roles can
be combined or shared.

Plans. PRINCE2 offers a series of plan levels that can be tailored to the size
and needs of a project and an approach to planning based on products rather
than activities.

Controls. PRINCE2 provides a set of controls which facilitate the provision of

key decision-making information, allowing an organisation to pre-empt
problems and make decisions on problem resolution. For senior management,
PRINCE2 controls are based on the concept of management by exception, i.e.
we agree a plan, and then let the manager get on with it unless something is
forecast to go wrong. In order to promote sound management control, a
project is split into stages as an approach to defining the review and
commitment points of a project. (Using stages also helps to reduce the amount
of work that a Project Manager needs to plan in detail at any one time.)

Management of Risk. Risk is a major factor to be considered during the life of

a project. PRINCE2 defines the key moments when risks should be reviewed,
outlines an approach to the analysis and management of risk, and tracks these
through all the processes.

Quality in a project environment. PRINCE2 recognises the importance of

quality and incorporates a quality approach to the management and technical
processes. It begins by establishing the customers quality expectations and
follows these by laying down standards and quality inspection methods to be
used and by checking that these are being used.

Configuration management. Tracking the components of a final product and

their versions for release is called configuration management. There are many
different methods of configuration management available. PRINCE2 defines
the essential facilities and information requirements for a configuration
management method and how it should link with other PRINCE2 components
and techniques.

www.executive-development.co.uk

Notes to accompany Prince 2 Process Slides

Change Control. PRINCE2 emphasises the need for change control, and this
is enforced with a change control technique plus identification of the
processes that capture, analysis and progress the change control.

www.executive-development.co.uk

Notes to accompany Prince 2 Process Slides

The Processes
Starting up a Project (SU)
Fundamental Principles

There must be a basic business requirement that triggers the project. Indeed,
before any work is commenced or resources committed, there is a requirement to
be able to answer the basic question: Do we have a viable and worthwhile
project? This question must be answered honestly to ensure that resources are
not committed and wasted

Nothing can be done in the project until responsibilities are defined and key roles
have been filled. Someone has to kick-start the project into being and make the
first decisions

Certain base information is needed to make rational decisions about the

commissioning of the project

An initiation Stage Plan must be submitted for approval before the imitation stage
can be entered

This is the first process within PRINCE2. The project begins once this process has been
conducted and the Project Board has approved commencement of project initiation.
Projects can be identified in a variety of ways and thus have a wide variation in the
management information available to the project management team at the time of startup. The trigger for the project is the Project Mandate. This is normally provided by
corporate or programme management. It is accepted that the Project Mandate may be
anything from a verbal request to a full Project Brief.
Process Description
The work of the process is built around the production of seven elements:

Designing and appointing the project management team

Ensuring that the information required for the Project Brief is available

Establishing the Project Approach

Establishing the customers quality expectations

Creating an outline Business Case

www.executive-development.co.uk

Notes to accompany Prince 2 Process Slides

Setting up a Risk Log

Creating the initiation Stage Plan

The objective of the process is to enable a controlled start to the project by ensuring that:

All the necessary project management authorities exist for undertaking the project

Sufficient information is available to formalise the terms of reference for the

project

Individuals are appointed who will undertake the work required in project
initiation and/or will take significant project management roles in the project

The work required for project initiation is planned

The organisation that will host the project team is informed of the existence and
implications of the new project.

www.executive-development.co.uk

Notes to accompany Prince 2 Process Slides

Initiating a Project (IP)

Fundamental Principles
A successful project should observe the following principles:

A project is a finite process with a defined start and end

All parties must be clear on what the project is intended to achieve, why it is
needed, how the outcome is to be achieved and what their responsibilities are, so
that there can be genuine commitment to the project.

Well managed projects have an increased chance of success.

Following these principles will ensure that the project can be successfully scoped and
managed to its completion.
Process Description
The purpose of Initiating a Project is to draw up a contract in the form of a Project
Initiation Document between the Project Board and the Project Manager, so that there is a
common understanding of:

The reasons for doing the project

What key products the project will deliver

How and when these will be delivered and at what cost

The scope of what is to be done

Any constraints which apply to the product to be delivered

Any constraints which apply to the project

Who is to be involved in the decision making

How the quality required will be delivered

What risks are faced

How the project is to be controlled

Who needs project progress information, how and when

www.executive-development.co.uk

Notes to accompany Prince 2 Process Slides

The next commitment that the Project Manger needs (the next stage plan)

This information can be agreed as informally as the Project Board and the Project
Manger wish. The Project Manager should always document the understanding,
however small the project, and get it signed by the project board, even if this is one
person. Peoples recollection of a verbal agreement can differ weeks, or even days
later.
In formal terms, the objectives of Initiating a Project are to:

Document and confirm that an acceptable Business Case exists for the project

Ensure a firm and accepted foundation to the project, prior to the

commencement of the work, via the creation of the Project Initiation
Document

Enable and encourage the Project Board to take ownership of the project

Enable and encourage the project board to:

o Make a decision on whether the project is viable
o Agree to the commitment of resources to the next stage

Provide the benchmark for the decision-making processes required during the
projects life

Ensure that by carrying out initiation in an organised manner, the investment

of time and effort required by the project is made wisely, taking account of the
risks to the project.

www.executive-development.co.uk

Notes to accompany Prince 2 Process Slides

Directing a Project (DP)

Fundamental Principles
Senior management who have the authority and responsibility for:

Defining what is required from the project

Authorising the funds for the project

Committing the resources

Communicating with external interested parties

will typically delegate the day-to-day charge of the project to a Project Manager.
However, the Executive must exercise overall control and be responsible for the key
decisions. It is also important that levels of authority and decision-making processes are
clearly identified.
Process Description
The objectives of Directing a Project (DP) are to:

Ensure the ultimate success of the project, judged by:

o the ability of the products of the project to deliver the business benefits set
out in the Business Case
o delivery to agreed time, cost and quality parameters

Manage the identified risks in the project

Ensure the effective management of all people and resources concerned with the
project

Commit the required resources

Make decisions on any changes requested by the Project Manager

Provide overall direction and guidance throughout the project

Make decisions on exception situations

Ensure that the project and the products remain consistent with business plans and
the external environment

www.executive-development.co.uk

Notes to accompany Prince 2 Process Slides

Ensure that the necessary communication mechanisms are in place

Sponsor appropriate external communication and publicity about the project.

This process covers the direction of the project throughout its life cycle. The project
board pro-actively manages the projects response to the external environment. Within
the project, the Project Board should manage by exception. The Project Board
members are normally busy executives with a range of responsibilities; demands on their
time should be kept to a minimum while fulfilling their responsibilities to the project.
The key responsibilities are:

Overall direction and decision making

Resource commitment.

The key processes for the Project Board are predominately event driven and focus the
Project Board members on a small number of key decision points, plus informal
discussions where required. These key processes break into four main areas:

Initiation (starting the project off on the right foot)

Project re-evaluation at stage boundaries or following an exception situation

(commitment to further work after checking results so far)

Ad Hoc direction (monitoring progress, providing advice and guidance)

Project closure (confirming the project outcome and bringing the project to a
controlled close, or premature closure of the project should the Business Case no
longer be valid).

www.executive-development.co.uk

Notes to accompany Prince 2 Process Slides

Controlling a Stage (CS)

Fundamental Principles
Once a decision has been taken to proceed with work and resources have been
committed, the project management team must focus on delivery within the tolerances
laid down.
This means controlled production of the agreed products:

To stated quality standards

Within cost, effort and time agreed

Ultimately to achieve desired benefits.

To achieve this success, the project must:

Focus management attention on delivery of the stages products

Focus the resources used during the stage towards this end

Keep the risks under control

Keep the Business Case under review

Carefully monitor any movement away from the direction and products agreed at
the start of the stage to avoid scope-creep and loss of focus.

Process Description
The objectives of Controlling a Stage are to:

Deliver the right products

Ensure that quality is achieved as planned

Deliver products on time and to cost within agreed tolerances

Correctly direct and conduct work on products

Keep control of products via configuration management

Properly direct and utilise resources

www.executive-development.co.uk

10

Notes to accompany Prince 2 Process Slides

Update plans with actuals, enabling progress to be checked against the plan

Correctly cost resource usage

Correctly manage any deviations from Stage or Project Plans

Inform all interested parties about project progress in a timely manner

Ensure that projects are stopped or redirected if the reasons for setting them up
have been invalidated by internal or external events.

Central to the ultimate success of the project is the day-to-day control of the work that is
being conducted. Throughout a stage, this will consist of a cycle of:

Authorising work to be done (CS1)

Monitoring progress information about that work (CS2 and CS9)

Watching for and assessing Project Issues (CS3 and CS4)

Reviewing the situation and triggering new Work Packages (CS5)

Reporting (CS6)

Taking any necessary corrective action (CS7)

If changes are observed that are forecast to cause deviations beyond agreed Stage and/or
project tolerances, Capturing Project Issues (CS3), Examining Project Issues (CS4),
Reviewing Stage Status (CS5) and Escalating Project Issues (CS8) cover the activities of
bringing the situation to the attention of the Project Board.
Other factors that must be borne in mind are as follows:

The current stage contains work and involves resource expenditure that has been
authorised by the Project Board. It is therefore important to give the Project Board
feedback on progress against its expectations.

All individual items of work in a stage should be authorised

Project work can be adequately controlled only against a plan

If the project is to be successful, the Project Manager and Project Board must
react quickly to changes and deviations from the agreed Stage Plan.

www.executive-development.co.uk

11

Notes to accompany Prince 2 Process Slides

Managing Product Delivery (MP)

Fundamental Principles
Managing Product Delivery (MP) allows a controlled break between the Project Manager
and Team Manager, or between the Project Manager and product creation/provision by
third-party suppliers. The process needs careful implementation to avoid being overbureaucratic.
Process Description
The objectives of this process are to allow a Team Manager to:

Agree work with the Project Manager

Get it done

Hand it back to the Project Manager

This agreement to do a defined amount of work is parcelled into Work Packages. Where
external suppliers are involved, the acceptance of Work Packages will be affected by the
terms of their contract.
The Team Manager ensures that planned products are created and delivered by the team
to the project by:

Accepting and checking Work Packages from the Project Manager

Making certain that work on products allocated to the team is effectively

authorised and agreed

Ensuring that work links to any interfaces identified in the Work Package

Creating or revising a Team Plan for the work

Ensuring that the work is done

Ensuring that work progress, quality inspections and forecasts are regularly
assessed

Ensuring that completed products meet specified quality criteria

Obtaining approval for completed products.

www.executive-development.co.uk

12

Notes to accompany Prince 2 Process Slides

Managing Stage Boundaries (SB)

Fundamental Principles
Projects, whether large or small, need to be focussed on delivering business benefit,
either in their own right or as part of a larger programme. The continuing correct focus of
the project should be confirmed at the end of each stage. If necessary, the project can be
redirected or stopped to avoid wasting time and money.
Process Description
The objectives of the process are to:

Assure the Project Board that all products in the current Stage Plan have been
completed as defined

Prepare the next stage plan

Provide the information needed for the Project Board to assess the continuing
viability of the project

Obtain authorisation for the start of the next stage, together with its delegated
tolerance margins

Record any information or lessons that can help later stages of this project and/or
other projects.

There could be changes of personnel and management, needing changes to the project
management team.
There is also the requirement to review the Project Quality Plan and Project Approach to
check whether they need changing or refining.
The stage that follows initiation is normally approved at the same time as the Project
Initiation Document. If so, this process would need customising for that situation.

www.executive-development.co.uk

13

Notes to accompany Prince 2 Process Slides

Closing a Project (CP)

Fundamental Principles
One of the defining features of a project is that it is finite it has a start and an end. If the
project loses this distinctiveness, it loses some of its advantages over purely operational
management approaches.
A clear end to the project:

Is always more successful than the natural tendency to drift into use and
subsequent modification of the product. It is recognition by all concerned that:
o The original objectives had not been met
o The current project has run its course
o Either the operational regime must now take over the products from this
project, or that they should become inputs into some subsequent project or
into some larger programme.

Helps to achieve business objectives by avoiding wasted time and by providing a

useful opportunity to take stock of achievements and experience

Provides an opportunity to ensure that all unachieved goals and objectives are
identified so that they can be addressed in the future.

Process Description
The approach to Closing a Project (CP) has to be tailored to suit the needs of the
particular project. For example, if the project is part of a programme or a series of
projects, this may affect how some of the fundamental principles, such as how follow-on
actions are handled. The project may be closely connected with a subsequent project and
may have been planned ahead that way. All the results of the first project feed into the
subsequent one, in which case there may be no need to be concerned about maintenance
or subsequent operational arrangements, or other follow-on actions. As another example,
if the project had delivered an intangible product for example to bring about a change in
philosophy then the objective of ensuring that operational and support arrangements are
in place may not be appropriate.
The following is an illustrative list of the aims of the Closing a Project (CP) process.
Depending on the type of project, they may not all be required:

Ensure that the objectives or aims set out in the Project Initiation Document have
been met

Ensure that all expected products have been handed over and accepted by the
customer or relevant subsequent project

www.executive-development.co.uk

14

Notes to accompany Prince 2 Process Slides

Ensure that the acceptance criteria have all been met and get the customers
confirmation of this

Ensure that arrangements for the support and operation of the projects products
are in place (where appropriate)

Request formal acceptance of the products from the Project Board

If the project has been closed prematurely, document what has been achieved and
recommend the way forward

Identify any Follow-on Action Recommendations

Capture and document lessons resulting from the project

Prepare an End Project Report

Plan any post-project review required

Prepare notification to the host location of the intention to disband the project
organisation and resources

Arrange secure and orderly achieving of the projects records.

This process covers the Project Managers work to close the project either at its end or at
premature close. Most of the work is to prepare input into the Project Board to obtain its
confirmation that the project may close. If the project is being brought to a premature
close, this process will have to be tailored to the actual project situation. It will be a case
of what can be saved for use by another project or what remedial work is now required to
fill any gaps left by the cancellation of this project.
The Project Initiation Document is examined to check the actual results of the project
against the original expectations of (or as modified by the Project Board). All planned
products should have been approved and delivered to the customer or be ready for
handover. There must be documented confirmation from the customer that all Acceptance
Criteria, defined at the outset of the project, have been met.
The Project Manager prepares an End Report that comprehensively evaluates the actual
project results versus that envisaged in the Project Initiation Document.
There may be a number of Project Issues that were put in suspension by the Project
Board. These may lead to new projects or enhancements to the products of the current
project during its operational life. The project Manager sorts these out into appropriate
Follow-on Action Recommendations.

www.executive-development.co.uk

15

Notes to accompany Prince 2 Process Slides

The Lessons Learned Log, which has been developed during the project, is now turned
into a report and made available outside the project.
Notification to the host location that any provided facilities and resources will no longer
be required is prepared for Project Board approval, including release dates
Archiving of the management documents should be arranged, such that any later audit or
retrieval can be done conveniently.

www.executive-development.co.uk

16

Notes to accompany Prince 2 Process Slides

Planning (PL)
Fundamental Principles
Effective project management relies on an effective planning and control process. Even
small projects require planning.
Planning provides all personnel involved in the project with information on:

What is required

How it will be achieved and by whom, using what specialist equipment and
resources

When events will happen

The Planning (PL) process is where the technique of product-based planning is used, this
being one of the key techniques used by PRINCE2. A brief description of this technique
follows.
Product-based Planning
Four products are created within the product-based planning technique:

A Product Description of the final product of the project

A Product Breakdown Structure

Product Descriptions of each product

A Product Flow Diagram

Producing a Product Description of the final product

The first task in product-based planning is to assist the customer to write a Product
Description for the final product of the project. The purpose of these is to:

Understand the detailed nature, purpose and function of the final product

Identify the sources of information or supply for the product

Describe the appearance of the final product

Identify the level of quality required of the final product

www.executive-development.co.uk

17

Notes to accompany Prince 2 Process Slides

Enable identification of activities to develop and quality control the final product

Define the people or skills required to develop and check the final product.

Producing a Product Breakdown Structure

The second task in product-based planning is to produce a Product Breakdown Structure
(PBS). The objectives of this are to:

Identify the products to be created or obtained by the planned work

Identify additional products needed to build and support the final products

Build a consensus on the best product groupings that should be used to generate
ideas on what products have to be created or obtained.

Product Descriptions of each product

As stated earlier, product-based planning should begin with the writing of a Product
Description for the final product of the project. It is also recommended that Product
Descriptions are written for each significant simple product and each integration product
on the Product Breakdown Structure or Product Flow Diagram.

Creating a Product Flow Diagram

The final task in product-based planning is producing the Product Flow Diagram (PFD).
The Product Flow Diagram is created form the Product Breakdown Structure and indicate
the order or sequence in which the plans products will be created. It precedes the
identification of activities in Identifying Activities and Dependencies (PL3).
A Product Flow Diagram needs very few symbols. Each product to be developed within
the plan is enclosed in a rectangle. Arrows connect the rectangles, showing the sequence
in which the products are to be created. Any products that already exist or are outside the
planners control should be clearly identified by using a different type of enclosure, an
ellipse.
The diagram begins with those products that are available at the start of the plan (perhaps
many of these are documents, such as statements of requirements or desighns0 and ends
up with the final product(s) of the plan.

www.executive-development.co.uk

18

Notes to accompany Prince 2 Process Slides

Creation of a Product Flow Diagram may reveal new products that are required. These
should also be added to the Product Breakdown Structure and Product Descriptions
should be written for them.
Although the Project Manager or Team Manager is responsible for creation of the
Product Flow Diagram, it is sensible to involve those who are to develop or contribute the
products contained in the plan.

Planning Process Description

The philosophy behind producing plans in PRINCE2 is that:

Plans are constructed by identifying the products required, and then the activities
and appropriate resources necessary to deliver them

Plans should cover management needs as well as the customers products

There should be assurance that all activities are thought through in advance and to
a level consistent with the control requirements identified in the Project Initiation
Document.

The product-base planning technique provides a start to the planning activity and a
planning framework. It involves:

Establishing what products are needed for the plan

Describing those products and their quality criteria

Determining the sequence in which each of the products should be produced and
any dependencies.

After these initial steps, the normal steps of planning are:

Identifying the activities needed to produce the products

Deciding when the activities should be done and by whom

Estimating how much effort each activity will consume

Estimating how long the activities will take

Agreeing what quality control activities and resources are needed

Producing a time-base schedule of activities

www.executive-development.co.uk

19

Notes to accompany Prince 2 Process Slides

Calculating how much the overall effort will cost

Producing the budget form the cost of effort plus any materials and equipment
that must be obtained

Assessing the risks contained in the plan

Identifying the management control points needed

Agreeing tolerances for the plan.

The steps involved are the same for all levels of plan.

www.executive-development.co.uk

20

Notes to accompany Prince 2 Process Slides

Sample Product Description Organising a Conference

Title
List of Venue Requirements
Purpose
To identify all the requirements that must be met by suitable venues for the conference
Composition
The date on which availability is required
Start and end times
Expected numbers of attendees
Accommodation requirements
Facilities required
Refreshment requirements
Parking requirements
Derivation
Mailing list
Required date
Previous conference numbers
Any previous conference list of requirements
Format and Presentation
Typed list with sub-headings as per Composition
Allocated to
Conference organiser
Quality criteria
List must identify everything that will be required of a site to hold the conference
List should clearly separate mandatory from desirable features
List must cover all items defined under Composition
Each item should be defined in a way that is measurable
Quality method
One check of the list against the headings in Composition
Proof-reading by word processing software and independent reviewer

www.executive-development.co.uk

21

Notes to accompany Prince 2 Process Slides

Comparison against the list for any previous conference
Check against any offered checklist from conference sites
Quality tolerance
The list should recognise the interaction of quality and cost, with the emphasis on quality
up to a 10% differential in cost
Where possible, any acceptable range of tolerance for an item should be given
Quality check skills and/or people required
Proof reader
Ideally a person who has either organised a conference before or a conference director
from a hotel chain

www.executive-development.co.uk

22