LEARNING OUTCOME 1 - KEY CONCEPTS

i. RECALL (BL1)

1.1 – Four integrated elements: Principles, Themes, Processes, Project Environment

1.3 – What makes a project a PRINCE2 project?

 Applying the PRINCE2 principles
 Minimum requirements set out in the PRINCE2 themes
 Satisfy the purpose and objectives of the PRINCE2 processes
 Using PRINCE2’s recommended techniques or using alternative, equivalent techniques

2.1 – What is a project?

Definition: A temporary organization that is created for the purpose of delivering one or more business products according
to an agreed business case
Characteristics: Change, Temporary, Cross-functional, Unique, Uncertainty

2.3 – The six aspects of project performance to be managed: Costs, Timescales, Quality, Scope, Benefits, Risk

ii. DESCRIBE (BL2)

1 – Key Features and Benefits of PRINCE2:

 Can be Tailor (Adaptable), Apply to any type of project (Flexible/Scalable)
 Widely recognized/Same language (Improve Communication)
 Focus on Business Case, Product-Based planning approach
 Promote Learning/Career Development, Define Organization structure for project management Team
 It ensures that stakeholders are represented in planning and decision-making

2.5.4 – The Sponsor/Customer/Supplier/User context on which PRINCE2 is based.

 Sponsors: (Executive/Project Board) Endorse objectives and ensure that investment provides value for money
 Supplier: (Persons/Groups) who will provide/supply/produce the resources/expertise (Specialist Products/Skills)
 User: The person or group who will use one or more of the project’s products/outcome)
 Customer: (Persons/Groups) who commissioned the work and will benefit from the end results.

LEARNING OUTCOME 2 - PRINCIPLES

iii. PRINCE2 Principles: Chapter 3 (BL2)

3 – Principles are 7: A framework of good practice for people involved in a project [ARE MANDATORY]
 Continued business justification: Project has continued business justification
o Justifiable reason for starting the project.
o Recorded and approved and remains valid throughout the life of the project.

 Learn from experience: Lessons are sought, recorded and acted upon throughout the life of the project.
o When starting a project, As the project progresses, As the project closes

 Defined roles and responsibilities: Project has defined roles and responsibilities within an organization structure
o (Cross-functional) May involve +1 organization, may involve a mix of full-time and part-time resources.
o (Stakeholders): Business Sponsors, Suppliers, Users

 Manage by stages: Project is planned, monitored and controlled on a stage-by-stage basis

o Breaks the project into sequential sections, called Management Stages (MS).
o Project Board (PB) delegates the authority for daily control of MS, within agreed tolerances, to the PM
o PM review progress, state of project Plan, Business Case, Risks, Next Stage Plan  Continue project?
o PM Create  End Stage Report and Stage Plan to request authorization for next Management Stage

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  Manage by exception: Project has defined tolerances for each objective, to establish limits of delegated authority.
o Accountability is established by:
 Delegating authority form from one management level (ML) to the next by setting tolerances
against six aspects of performance
 Setting up controls. If tolerances are forecast to be exceeded, immediately escalated to the next
ML for a decision
 Putting assurance mechanism in place. Each ML can be confident that controls are effective

 Focus on products: Delivery of products, in particular their quality requirements.

 Definition: input/output (deliverable), tangible/intangible, created and tested
 2 Types: Management products and specialist products
o Project does no more work than it needs to deliver its agreed products
o Helps manage uncontrolled change “Scope Creep”
o Reduces the risk of user dissatisfaction and acceptance

 Tailor: (Adapt a method/process) to suit Project environment, size, complexity, importance, team capability, risk.
o The purpose of tailoring is to ensure that:
 Project management method used, is appropriate
 Project controls are appropriate to: project’s scale, complexity, importance, team capability, risk
o Tailoring requires the project board and the project manager to make proactive choices and decisions
o The Project Initiation Document (PID) describe how PRINCE2 has been tailored for a particular project

iv. Tailoring (BL2)

4.3.1 – Which 5 aspects of a project can be tailored? (BL2)

 Processes (adding or combining activities)
 Themes (using techniques that are appropriate)
 Roles (combined or split, provided that accountability is maintained and there are no conflicts of interest)
 Management Products (may be combined or split into any formal documents or data sources)
 Terminology (changed to suit other standards or policies)

4.3.2 – Who is responsible, and how tailoring decisions are documented? (BL2)
 The PM is responsible for identifying and documenting the level of tailoring for the project  Reflect the PID
 If project require additional information, should be added to the Management Product (MP)
o MP:
 Highlight Report or End Stage Report
 3 types: Baselines, Records and Reports.

5 – Themes are 7: Describe aspects of project management.

 Business case, Organization, Quality, Plans, Risks, change, Progress

LEARNING OUTCOME 3 - THEMES

v. Business Case (BL2)

6.1 – Purpose of the Business Case:

 Establish mechanisms to review if project remains desirable/viable/achievable in its (continued) investment
o Content Business Case: Develop, Verify, Maintain, Confirm
o Measure Improvements: Output (New App), Outcome (App is fast), Benefits (More 10% users)

A – Benefits Management Approach & Business Case (BC):

o A.1.1 – Benefits Management Approach: Ensure outcomes are achieved + confirm benefits are realized.
o A.2.1 – Purpose: BC is used to document the Business Justification for undertaking a project based:
 Cost, Risks, Benefits (can be measured)

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 vi. Minimum requirements for Business Case (BL2)

6.2 – Minimum requirements:

 Create and Maintain a business justification (BJ) for the project
 Review and Update the BJ
 Define the management actions (ensure that the project’s outcomes are achieved and confirm)
 Define and Document the Roles and Responsibilities for: Business Case and Benefits Management

vii. Key concepts related for Business Justification and differences between them (BL1)

Fig 6.1 – Outputs, Outcomes, Benefits & Dis-benefits

 Output (New App), Outcome (App is user friendly), Benefits (More 10% users), Dis-Benefit (Increase 5% cost)

viii. Explain the purpose of Organization and Communication Management Approach (BL2)

7.1 – Purpose of the Organization theme:

 Define and establish the project’s structure of accountability and responsibilities (WHO)?

A.5.1 – Purpose of Communication Management Approach:

 Describes the means and frequency of communication to stakeholders

ix. Minimum requirements for the organization theme:

7.2 – Minimum requirements:

 Define organization structure and roles, Document the rules for delegating Change Authority responsibilities
 Define approach to communicating/engaging with stakeholders
Two Product are produce and maintained:
o PID: Single source for how the project is to be managed (PM and Project Board can assess progress)
o Communication Management Approach (CMA)

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 x. Describe the role and responsibilities (BL2)

7.2.1 – Roles:
 Project Board:
o Senior User, Executive, Senior supplier
o Accountable to Corporate, Programme management or the customer for the success of the project
 Executive: Secures funding for the project, responsible
for business case and continued BJ of the project.
Appoint the PM + Approve CMA
 Senior User: Responsible for specifying needs
(operations + maintenance) of who will use the project.
Provide User (resources + Def requirements +
spec)
 Senior Supplier: Accountable for quality products
delivered by supplier(s) + responsible for technical
integrity. Provide supplier resources + Advised
technical aspects of products
 Project Assurance: Responsible for supporting PM,
giving advice + guidance on issues (ex: corporate
standards, stakeholders engagement)
 Change Authority: Authorize requests change off-
specifications (Guidance/ Advised quality
inspections or reviews)
 Project Manager: Manage the Team Members (use
work packages to allocate team) and support the Board
 Team Manager: Ensure production of products allocated by the PM. Reports to and takes direction from PM
 Project Support: May include administrative services or advice/guidance on the use of PM tools. It could also
provide specialist functions to a project such as Planning or Risk Management

Combining roles: Can be combined except:

o Executive and Project Manager cannot be combined
o Cannot be more than one Executive or Project Manager
o Executive’s accountability for project success cannot be delegated

xi. Explain key concepts related to organization – Fig 7.1 and 7.2 (BL2)
4 Levels of Management: Corporate, Directing (Project Board), Managing (PM), Delivering (Team Member)
3 project Interests/Stakeholders: Business, User, and Supplier

xii. Explain Quality Theme (BL2)

8.1 – Purpose of Quality:

 Define and implement the means by which the project will verify.
 Ensuring that project’s products meet business expectations and enable the desired benefits to be realized
 Definition of Quality: The degree to which a set of inherent characteristics fulfils requirements.

A.17.1 – Purpose of Product description:

 Understand the detailed nature, Define who will use, ID sources of information/supply for product
 ID level of quality required, ID activities to produce, Define people/skills required to produce

A.21.1 – Purpose of Project Product description:

 Scope requirements, Quality expectations, Acceptance criteria

A.22.1 – Purpose of Quality Management Approach:

 Describes how quality will be managed on the project.
 Specific processes, procedures, Techniques, standards and responsibilities to be applied

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A.23.1 – Purpose of Quality Register:
 Summarize all the quality management activities (planned/have taken)
 Provides information for the end stage reports and end project report
 Issue a unique reference for each quality activity

xiii. Minimum requirements for Quality Theme (BL2)

8.2 – Minimum requirements:

 Define its quality management approach (quality control, project assurance)
 Specify quality criteria, Maintain record to provide evidence that the planned quality activities

xiv. Key concepts related to quality and differences between them (BL1)

8.1.1 A - Quality Planning and Control:

 Quality Planning: Defining the project’s products, with their respective quality criteria, quality methods
 Quality Control: Focuses on the operational techniques and activities used by those involved in the project to:
o Check that the products meet their quality criteria (e.g. by quality inspections, testing or review)
o ID ways eliminating causes/unsatisfactory performance (Ex Introducing process improvements as a
result of previous lessons)

8.1.1 B – Project Assurance and Quality Assurance:

 Project Assurance: Project board’s responsibility to assure itself that the project is being conducted correctly.
 Quality Assurance: Check project’s direction and management are complies with relevant corporate, Programme
management or customer standards and policies

8.3.6 – Customer quality expectations:

 Should be agreed early in the starting up a project process. Avoid misinterpretations and inaccurate assumptions
about the project’s quality requirements.
 Should cover:
o Key quality requirements for product, standards and processes need to be applied and measurements
o Measurements that may be useful to assess whether the project product meets the quality requirements

8.3.8 – Acceptance criteria:

 List of measurable definitions of the attributes required for a set of products to be acceptable to key Stakeholders.
 When project can demonstrate all acceptance criteria have been met, the project’s obligations are fulfilled and
the project can be closed.

xv. Plan Theme (BL2)

9.1 – Purpose of Plan theme:

 Facilitate communication and control by defining the means of delivering the products (the where and how, by
whom, and estimating the when and how much).

9.2.1 to 9.2.4 – Project Plan, Stage Plan, Exception Plan, Team Plan:
 Project Plan: High-level plan showing the major products. Initial project plan is presented as part of the PID.
 Stage Plan: Similar to project plan, but broken into detail level. Is required for each Management Stage.
 Exception Plan: Plan that follows an Exception Report. Show actions required to recover from deviation.
 Team Plans (optional): Produced by Team Manager. Used for Team Manag. Control when doing work packages.

A.16.1 – Plan
 3 levels of plan: Project, Stage and Team.

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 xvi. Minimum requirements for Plan Theme (BL2)

9.2 – Minimum requirements (4 Product produced and maintained):

 Project Product Description, Product Description, Product Breakdown Structure (PBS) and Plan

PRINCE2 used project product description (PBS) into a product breakdown structure, while AGILE user stories to PBS

9.3 & 9.6 - Approach to: Planning, Defining, Analyzing the products, Management stages (MS):

Product-Based Planning Defining and Analyzing the products

NOTE: Delivery steps often overlap, but MS not.

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 xvii. Risk theme (BL2)

10.1 – Purpose of Risk theme:

 Identify, assess and control uncertainty and, as a result, improve the ability of the project to succeed.

10.3.7 – Purpose Risk Budget:

 Is based on the aggregate cost of all the project’s planned risk responses

A.24.1 – Purpose Risk Management Approach:

 Describes how risk will be managed on the project.

A.25.1 – Purpose Risk Register:

 Record of identified risks relating to the project, including their status and history (Threats / Opportunities)

xviii. Minimum requirements for Risks Theme (BL2)

10 – Definition of Risk
 An uncertain event or set of events that, should it occur, will have an effect on the achievement of objectives

10.2 – Minimum requirements (four):

 Define its risk management approach | Maintain Risk Register
 Ensure risks are ID, Assessed, Managed and Reviewed | Use lessons learned to manage risks

xix. Key concepts related to Risk (BL1)

 Risks Definition: Probability of a perceived threat/opportunity and Magnitude of its impact on objectives
 Probability: how likely they are to occur (scale 0 -1)
 Impact: Very Low, Low, Medium, High, Very High
 Proximity: imminent, within the management stage, within
the project or beyond the project
 Tolerance Line: represent those that the organization will not
tolerate except under special circumstances

Definition of Risk Appetite:

 An organization’s attitude towards risk-taking that in turn
dictates the amount of risk that it considers acceptable

Definition of Risk Tolerance:

 The threshold levels of risk exposure that can be exceeded.
When exceeded will trigger some response

10.3 – Risk Responses Types:

 Threat (Negative impact on objectives) Opportunity (Positive impact on objectives), several responses:
o Threat: Avoid, Reduce, Transfer, Share, Accept
o Opportunity: Exploit, Enhance, Transfer, Share, Accept

xx. Risk Management Procedures (BL2)

10.4 – Risk Management Procedure:

 ... Identify  Asess  Plan  Implement… & communicate [4 sequential & 1 parallel = 5 Steps]
o Cause: The source of the risk
o Event: Area of uncertainty in terms of the threat / opportunity
o Effect: impact(s) that the risk would have on the project objectives
 Owner: Who is responsible for the management
 Actionee: Carry out a risk response action. They support the risk owner

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 xxi. Change theme (BL2)

11.1 – Purpose Change: ID, assess and control any potential and approved changes to the project baselines.

xxii. Minimum requirements for Change Theme (BL2)

11.2 – Minimum requirements:

 Define its change control approach
 Define how product baselines are created, maintained and controlled
 Maintain some form of issue register
 Ensure issues are captured, examined, managed and reviewed throughout the project lifecycle
 Use lessons to inform issue ID and Management (Learn from experience principle)

11.3.6 – Purpose Change Budget: money that customer / supplier agree will be used to fund costs of change requests

A.3.1 – Change control approach

 ID, assess and control any potential and approved changes to the project baselines.
 Describes procedures, techniques, standards to be applied
 Describes the responsibilities for achieving an effective issue management and change control procedure

A.6.1 – Configuration item record:

 Item records are created only if required by the project’s change control approach  Provide info as history
 Record may be derived from:
o Change control approach, PBS, Stage and Work Plan,
o Quality register, Issue register and Risk register

A.12.1 – Issue Register:

 Capture and maintain information on all the issues that are being formally managed.
 The issue register should be monitored by the PM on a regular basis

A.13.1 – Issue Report:

 Have description, impact assessment & recommendations for change request, off-spec or problem/concern.
 It is created only for those issues that need to be handled formally

A.18.1 – Product Status Account:

 Is used to provide information about the state of products within defined limits (Status of Products)
 May be derived from: Configuration item records, Stage Plan.

xxiii. Describe Types of issue, Recommended issue and Change control procedure (BL2)

Tab 11.1 – Types of issues

 Request for Change: Proposal for a change to a baseline
 Off-Specification: Product is not meeting the specifications
 Problem / Concern: When the PM needs to Resolve / Escalate

Fig 11.1 – Issue and Change Control Procedure

 Capture  Assess  Propose  Decide  Implement
o Capture (Determine types of issues)
o Assess (Check severity / priority)
o Propose (ID options, evaluate options, recommends options)
o Decide (Escalate  If beyond delegated authority OR Approve  PM authority)
o Implement (Take corrective actions)

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 xxiv. Progress theme (BL2)

12.1 – Purpose of Progress:

 Establish mechanisms to Monitor and Compare actual achievements against those planned
 Provide a forecast for the project objectives and the project’s continued viability
 Control any unacceptable deviations

xxv. Minimum requirements for Progress Theme (BL2)

12.2 – Minimum requirements:

 Define its approach to controlling progress in the PID + PRINCE2 Principles …

A.7.1 – Checkpoint report:

 Used to Report, at a frequency defined in the work package, the status of the work package  Useful for PM

A.7.1 – Daily Log:

 May be used to record informal issues, required actions or significant events

A.8.1 – End Project Report:

 Used during project closure to review how the project performed against the version of PID used to authorize it.
 It also allows the passing on of:
o Lessons that can be usefully applied to other projects
o Details of unfinished work, ongoing risks or potential modifications

A.9.1 – End Stage Report:

 Give a summary of progress to date  Useful to PB. The project board uses the information in the end stage
report in tandem with the next stage plan to decide what action to take with the project
 Ex: Authorize the next stage, amend the project scope, Stop the project, etc.

A.10.1 – Exception report

 Is produced when a stage plan or project plan is forecast to exceed tolerance levels set.
 Produced by the PM to inform the PB of the situation, and offer options and recommendations for the way to
proceed

A.11.1 – Highlight report

 Provide the Project Board/other stakeholders a summary of the Management. Stage Status at defined intervals
 Project Board (PB) uses the report to monitor management stage and project progress.
 The PM uses it to advise the PB of any potential problems or areas where the project board could help.

A.14.1 – Lesson Log:

 Project repository for lessons that apply to this project or future projects.

A.15.1 – Lesson Report:

 Provoke action so that positive lessons become embedded in the organization’s way of working. So that
organization is able to avoid any negative lessons on future projects.

A.26.1 – Work Package:

 Information about products collated by the PM to pass responsibility for work or delivery to a team manager or
team member

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 xxvi. Key concepts related to Progress (BL2)

Corporate, Programme Management (CPM):

 Sets the overall requirements and tolerance levels for the project

Project Board (PB):

 Overall control at a project level, as long as forecasts remain within
project tolerance.
 Has the ability to review progress and decide whether to continue,
change or stop the project
 During execution of the Project Plan: If exceed the agreed tolerances
 escalate to CPM

Project Manager (PM):

 Day-to-day control for a management stage within the tolerance limits
laid down by the project board
 During execution of the Stage Plan: If exceed the agreed tolerances
 escalate to PB

Team Manager (TM):

 Control the Work Package
 During execution of Work Package: If exceed the agreed tolerances
escalate to PM

12.2.1 – Tolerances (6 Types):

 Cost, Time, Quality, Scope, Benefits, Risk [See section 2.3]

12.2.2 – Types of Control:

Event-Driven Controls: Mechanisms to Monitor and Compare actual achievements against those planned
 Ex: Completion of the PID | Creation of an exception report | End of the financial year
Time-Driven Controls: Take place at predefined periodic intervals
 Ex: Monthly highlight reports for project board | Weekly checkpoint reports showing the progress of work package

12.2.3 – Raising Exceptions (3 Levels):

 Work-package level exception, Stage-level exception & Project-level exception

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 LEARNING OUTCOME 4 - PROCESSES

xxvii. Processes Theme: Purpose (BL2)

13 – Intro: 7 Processes (set of activities required to direct, manage and deliver a project successfully)

14.1 – Starting Up a project (SU)

 Answering the question: Do we have a viable and worthwhile project?

15.1 – Directing a project (DP)

 Enable the PB to be accountable for the project’s success by making key decisions and exercising overall control
 Delegating day-to-day management of the project to the project manager

16.1 – Initiating a project (IP)

 Enabling the organization to understand the work needs to be done to deliver the project’s products before
committing to a significant spend.

17.1 – Controlling a stage (CS)

 Assign work to be done, monitor such work, deal with issues, report progress to the project board
 Take corrective actions to ensure that the Management Stage remains within tolerance.

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18.1 – Managing Product Delivery (MP)
 Control link between PM & Team Manager, by agreeing the requirements for acceptance, execution and delivery.

19.1 – Managing Stage Boundary (MS)

 Should be Executed / Close to end: Each Management Stage
 Enable the PM to provide the Project Board with sufficient information to be able to:
o Review the success of the current Management Stage
o Approve the next Stage Plan
o Review the updated Project Plan
o Confirm (Continued Business Justification) and acceptability of the risks

20.1 – Closing a project (CP)

 Ensure that acceptance of the project’s product is confirmed
o Recognize that objectives set out in the original PID have been achieved (Approved changes) OR
o Project has nothing more to contribute

xxviii. Processes Theme: Objectives (BL2)

14.2 – Starting Up a project (SU)

 Exist a business justification for initiating the project
 Necessary authorities exist for initiating the project
 Sufficient information is available to define and confirm the scope of the project (in the form of a project brief)
 individuals are appointed WHO will do the work and/or will take significant project management roles
 Work planned

15.2 – Directing a project (DP)

 There is authority to (initiate & deliver) the projects products
 Management direction and Control are provided throughout the project’s life
 Project remains viable. There is authority to close the project
 Corporate, Programme management or the customer has an interface to the project
 Plans for realizing the post-project benefits are managed and reviewed

16.2 – Initiating a project (IP)

 Reasons for doing the project, the benefits expected
 Scope of what is to be done and the products to be delivered
 How and When the project’s products will be delivered and at what Cost
 How the Quality required will be achieved
 How Risks, issues and changes will be identified, assessed and controlled
 how Progress will be monitored and controlled
 Who needs information, in what format and at what Time (how baselines will be established and controlled)
 Who is to be involved in the project decision-making
 How the Corporate, Programme management or customer method will be tailored to suit the project

17.2 – Controlling a stage (CS)

 Focused on delivery of the management stage’s products
 Risks and issues are kept under control
 Business Case is kept under review
 the agreed products for the management stage are delivered to stated
o Quality standards, within Cost, in Time agreed, support of the achievement of the defined benefits
 The project management team is focused on delivery within the tolerances laid down

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18.2 – Managing Product Delivery (MP)
 Work on products allocated to the team is authorized and agreed
 Team managers, team members and suppliers are clear as to what is to be produced
 Planned products are delivered to expectations and within tolerance
 Progress information is provided to the PM at an agreed frequency ensure that expectations are managed

19.2 – Managing Stage Boundary (MS)

 All products in the Stage Plan for the current management stage have been completed and approved by PB
 Prepare the stage plan for the next management stage
 Review and, if necessary, update the PID  Particular the Business Case

20.2 – Closing a project (CP)

 Verify user acceptance of the project’s products
 Review the performance of the project against its baselines
 Assess benefits realized + update the benefits management approach to include any post-project benefit reviews
 Ensure provision has been made to address all open issues and risks, with follow-on action recommendations.

xxix. Processes Theme: Context (BL2)

14.3 – Starting Up a project (SU)

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15.3 – Directing a project (DP)

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16.3 – Initiating a project (IP)

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17.3 – Controlling a stage (CS)

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18.3 – Managing Product Delivery (MP)

19.3 – Managing Stage Boundary (MS)

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20.3 – Closing a project (CP)

xxx. PRINCE 2: Final considerations

21 – Considerations for organizational adoption:

 Key message: The overriding objective for adopting PRINCE2 should be to improve business performance.

Before creating a project management method, it must be understood why an organization wants to do this. By
understanding the drivers and objectives, it is more likely that a method will be created that meets the needs of the
organization.

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