Since its introduction in the late 1980s, PRINCE2 has become the most commonly practiced project management approach in the world. It’s a methodology that gives project managers a governance framework, with clearly defined goals and strategy to determine how the project is governed.
Objectives of project governance
The strategic objectives of project governance, which PRINCE2 enables the project manager and team to achieve are:
- Ensuring value by aligning the project with the business
- Controlling costs
- Maximizing the value of resources allocated to the project
- Managing risk along the project lifecycle
- Applying best practices throughout the project lifecycle
- Organizational consistency
PRINCE2 evolved from the PRINCE project governance framework which was developed specifically for IT projects. PRINCE2 is more generic, with its methodologies applicable to all types of project.
A structured way to manage projects
PRINCE2 provides a rational structure for project managers to use. It lays down its framework in a logical way, with clearly defined project steps, roles, and processes. It enables the project manager to control all aspects of the project from the start, and provides for regular and real-time review of progress toward project goals.
In this way, the project manager can control the project with greater agility, while maintaining the involvement of all project stakeholders, management, and client.
The PRINCE2 project governance framework requires:
- the project to be thoroughly planned;
- the project management team to structure each stage; and
- all tasks and steps to be completed before the project ends
The seven principles of PRINCE2
PRINCE2 is a process-based approach to project governance, and functions in line with seven distinct principles. These are:
- Projects must be justified as valuable to the business
- Teams and individuals should learn along the project lifecycle
- Roles and responsibilities are clearly defined
- The project progresses in stages
- Project boards manage by exception
- Focus is on quality
- Individual projects require a tailored approach
Over the next few weeks, I’ll be looking at these seven principles in a little more detail, starting today with principle one.
How to develop business justification for your project
The business case will drive the project. It’s the reason behind undertaking the project in the first place, and it will be necessary for senior management of the organization to review before giving the green light. Under PRINCE2 governance, this review and authorization process continues throughout the project at every stage. In this way, the project remains agile and monitored for effectiveness at senior level.
It might be that senior management consider that plans must be changed. In this case, any impact of change should be considered – especially with regard to the business case for the project.
In short, if there is no business case, there is no project.
The seven key elements of the business case
The reasons for the project
The business case should always be couched in the reasons for the project’s existence. The reasons you give should be aligned with the values and strategy of the organisation. You might consider the project on the basis of what needs it will address, or problems it will solve, or how it will move the organisation closer to its strategic goals.
The options available to the organisation
Having identified need, the possible options for satisfaction of that need should be explored. Only by doing so can you ensure that initiating the project is the right course of action. By considering other options, the business case for the project will be strengthened when presented to senior management.
The benefits of the project
Lay out the benefits of the project clearly, whether those benefits are tangible or intangible. You’ll need to provide evidence to support the expectation of benefits, with explanations of how they will be achieved.
The risks of the project
Consider all risks that might be associated with both undertaking the project and not undertaking it. Transparency at this stage is key to engendering trust on project capability.
There is no point in beginning a project without knowing the cost. In fact, this is an integral part of the entire equation when measuring potential benefits, business options, and risks. You’ll need to justify every penny of expenditure so that accuracy of cost projections are assured.
Lifetime of project
You’ll have to project how long the project will take, and supply details of all tasks and activities that will take place at each stage of the project.
Appraisal of ROI
Measuring costs against benefits, you’ll be in a position to evidence the potential return on investment in the project. Does it provide value for money? What are the biggest benefits of undertaking the project, and why is it necessary?
Next time, I’ll look at the why, what, and how of learning lessons in PRINCE2 project management.