Business Projects Course Student Manual Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 1 of 121 Restriction on Use and Reproduction This document is confidential and contains proprietary information and intellectual property of AXELOS Limited, APM Group Limited (APMG-International) and Masaryk University. Neither this document nor any of the information contained herein may be modified, copied, published, disclosed, distributed, displayed, exhibited, or reproduced in any manner, including but not limited to electronic or printed formats, or otherwise transferred to a third party without the prior written consent of an authorized representative of Masaryk University. This statement applies to all pages, appendices, annexes, attachments, or other materials accompanying this document. Masaryk University is the Accredited Training Organisation responsible for compiling and / or creating this course material. Referencing for materials taken from the official PRINCE2 Manual is done via the statement: Based on AXELOS PRINCE2 material. Reproduced under licence from AXELOS Limited. Direct quotes from reference material are cited using Harvard Style in-text referencing. The following reference materials are cited in this document: 1. Axelos, 2009. Managing Successful Projects with PRINCE2® 2009 Edition Manual. 2009 Edition. The Stationery Office PRINCE2® is a Registered Trade Mark of AXELOS Limited, The Swirl Logo is a Trademark of AXELOS Limited. APMG is the accreditation body responsible for approving this Participant Guide. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 2 of 121 Message to Students Welcome to the Masaryk University, Faculty of Economics, Business Projects Course. This course is based on the 2009 version of PRINCE2 and is designed to teach you the fundamentals of the method. PRINCE2, Projects in a Controlled Environment 2nd version, is an industry recognised, structured, project management methodology which is recognised worldwide. It was first released in 1989 and is a product-based approach to project management, providing an easily tailored method for the management of all types of projects in all domains. Our goal is to provide the best training possible in project and programme management. To that end, our lecturers are not only faculty members of the University but are also highly respected industry professionals with extensive, international, project and programme management experience. This proficiency is an invaluable asset when it comes to explaining how the PRINCE2 method is used in some of the most challenging project environments. We thank you for choosing to take this course here at the Masaryk University, Faculty of Economics and Administration. We strive to deliver the best learning experience possible and trust that you will find your time with us enlightening and rewarding. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 3 of 121 Table of Contents SECTION I - DOCUMENT CONTROL SECTION .............................................................................. 5 SECTION II - COURSE DETAILS.................................................................................................... 6 1 COURSE MATERIALS ......................................................................................................................... 6 2 COURSE OBJECTIVES......................................................................................................................... 6 3 FOUNDATION CERTIFICATION EXAM.................................................................................................... 6 4 COURSE FEEDBACK........................................................................................................................... 6 5 COURSE SCHEDULE........................................................................................................................... 7 6 REQUIRED READING.......................................................................................................................... 8 7 GRADING........................................................................................................................................ 9 SECTION III - PRE-COURSE READING AND INSTRUCTIONS......................................................... 10 1 INTRODUCTION TO PRINCE2........................................................................................................... 10 1.1 The importance of projects............................................................................................... 10 1.2 What makes projects different?........................................................................................ 11 1.3 Why have a project management method?...................................................................... 11 1.4 Introducing PRINCE2 ......................................................................................................... 11 1.5 Benefits of PRINCE2........................................................................................................... 14 2 INTRODUCTION TO PRINCE2 PRINCIPLES .......................................................................................... 15 2.1 Continued business justification ....................................................................................... 16 2.2 Learn from experience ...................................................................................................... 16 2.3 Defined roles and responsibilities..................................................................................... 17 2.4 Manage by stages.............................................................................................................. 17 2.5 Manage by exception........................................................................................................ 18 2.6 Focus on products ............................................................................................................. 18 2.7 Tailor to suit the project environment.............................................................................. 19 3 INTRODUCTION TO PRINCE2 THEMES .............................................................................................. 19 3.1 Applying the themes ......................................................................................................... 20 4 INTRODUCTION TO PRINCE2 PROCESSES........................................................................................... 21 4.1 Pre-project......................................................................................................................... 21 4.2 Initiation stage................................................................................................................... 21 4.3 Subsequent delivery stages............................................................................................... 22 4.4 Final delivery stage............................................................................................................ 22 SECTION IV - CASE STUDY & SEMINAR EXERCISES .................................................................... 24 Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 4 of 121 SECTION V - COURSE SLIDES.................................................................................................... 25 SECTION VI - VISUAL AIDS......................................................................................................109 1 PRINCE2 ELEMENTS.................................................................................................................... 109 2 PRINCE2 MANAGEMENT BY STAGES.............................................................................................. 109 3 PRINCE2 LIFECYCLE..................................................................................................................... 110 APPENDIX A - CASE STUDY APPENDIX B - EXAM GUIDANCE APPENDIX C - BUSINESS BENEFITS PAPER Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 5 of 121 Section I - Document Control Section DOCUMENT HISTORY This document is only valid at the moment it was printed. The source document is under configuration management control and can be viewed on-line through the Masaryk University Information System. Only those printed copies distributed under configuration control and documented in the Document Distribution Section below are deemed valid after printing up until recalled by the course sponsor. REFERENCES A. AXELOS: PRINCE2_2009_-_Syllabus_2011_V1.5 B. APMG-International: ATO Course Content Assessment Standards v1.2 C. APMG-International: Material Assessments - Standards Guidance v1.3 PRODUCT IDENTIFIER BPH-BUPR-SG-2017-01 Revision Date Summary of Changes Version 17/02/2017 Original Version 01 DOCUMENT REVIEW Name Signature Date Version Petr Smutný, PMCE Coordinator 17/02/2017 01 Tuck MacRae 17/02/2017 01 DOCUMENT APPROVAL Name Signature Date Version Petr Smutný, PMCE Coordinator 17/02/2017 01 Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 6 of 121 Section II - Course Details 1 COURSE MATERIALS The course materials consist of this student guide, the Managing Successful Projects with PRINCE2® 2009 Edition Manual, and the 2017 Seminar Exercise Book. The manual is an invaluable tool in understanding the PRINCE2 method; all of the learning materials contained in this guide are either taken from or derived from the manual. At the end of the manual, there is a comprehensive glossary. It is highly recommended that you review the glossary regularly to familiarize yourself with the PRINCE2 terminology. The manual is also a very useful resource when doing the seminar exercises contained in the 2017 Seminar Exercise Book. 2 COURSE OBJECTIVES The main objective of this course is to provide students with an understanding of the structure and key terminology of the method. This includes creating an understanding of the need for project management and how PRINCE2 meets this need. Upon completion of the course, students will be familiar with the characteristics and context of a project and the benefits of adopting PRINCE2. They will understand the purpose of the PRINCE2 roles, management products, themes, and principles, and they will be aware of what decisions the project manager is expected to make. Lastly, they will be fully versed in the purpose, objectives and context of the PRINCE2 processes and be well prepared to take the PRINCE2 Foundation Certification Examination. 3 FOUNDATION CERTIFICATION EXAM The Foundation qualification confirms that an individual has sufficient knowledge and understanding of the PRINCE2 method to be able to work effectively with, or as a member of, a project management team working within an environment supporting PRINCE2. It is also a prerequisite for the Practitioner qualification. As part of this course, students will have the opportunity to write two sample exams, one of which will account for 60% of their final grade. It is always best to answer all the questions as marks are not subtracted for incorrect answers. It is important to note that there will only ever be one answer to each question; if you select more than one answer, no marks can be given for that question. 4 COURSE FEEDBACK We are committed to ensuring an excellent working and learning environment, and we are also dedicated to delivering the highest achievable level of service to our students. As such, we follow a rigorous, continuous improvement process. Part of this process includes receiving feedback from students, analysing the feedback, and using it to make improvements where necessary. For this reason, please take the time to make your views known. You may submit feedback electronically through the Information system or via email to either of the course lecturers. Your opinion is very important to us, and we thank you for your input. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 7 of 121 5 COURSE SCHEDULE Class Date Topics Lecturer Lecture 1 Wednesday, February 22, 2017 Course Introduction Both Lecture 2 Thursday, February 23, 2017 Introduction to PRINCE2® PRINCE2® Lifecycle & the PRINCE2® processes Tailoring PRINCE2® Tuck MacRae Lecture 3 Thursday, March 2, 2017 Organisation Theme Business Case Theme, Benefit Review Plan Tuck MacRae Lecture 4 Thursday, March 9, 2017 PRINCE2 Plans Theme Product Based Planning Tuck MacRae Lecture 5 Thursday, March 16, 2017 Progress Theme. Dr. Smutný Lecture 6 Thursday, March 23, 2017 Quality Theme & Quality Management Quality Review Technique Tuck MacRae Lecture 7 Thursday, March 30, 2017 Change Theme & Configuration Management Tuck MacRae Lecture 8 Wednesday, April 5, 2017 Risk Theme Risk Management Dr. Smutný Seminar 1 Thursday, April 6, 2017 Case Study Review, Starting up the Razorback Project, Class Exercise: The Organisation Tuck MacRae Seminar 2 Wednesday, April 12, 2017 Starting up Class Exercise: The Project Brief. Tuck MacRae Seminar 3 Thursday, April 13, 2017 Initiating the Razorback Project, Class Exercise, Initiation Stage Activities and Creating Documents Tuck MacRae Seminar 4 Wednesday, April 19, 2017 Individual Graded Activity, Exercise, Creating the PID. Tuck MacRae Seminar 5 Thursday, April 20, 2017 Managing Progress Class Exercise, Handling Events and Daily Activities with Logs and Registers Dr. Smutný Seminar 6 Wednesday, April 26, 2017 Individual Graded Activity, Exercise 6, Managing Progress & Delivery Stage Activities Dr. Smutný Seminar 07 Thursday, April 27, 2017 Closing a Project Class Exercise Dr. Smutný Seminar 08 Wednesday, May 3, 2017 Individual Graded Activity, Exercise 7, Closure Dr. Smutný Seminar 09 Wednesday, May 10, 2017 PRINCE2 Foundation Practice Exam Dr. Smutný Seminar 10 Thursday, May 11, 2017 PRINCE2 Foundation Practice Exam, Review Dr. Smutný Seminar 11 Wednesday, May 17, 2017 Course Foundation Exam Dr. Smutný Seminar 12 May 18, 2017 Course Exam Feedback and Round Table Both Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 8 of 121 6 REQUIRED READING Lecture / Seminar Required Reading Prior to Class Lecture 2 Read sections I through III of the Student Guide found in the IS Read pages 3 to 18 and pages 215 to 231 of Managing Successful Projects Lecture 3 Read pages 21 to 43, plus Appendices A.1, Benefit Review Plan and A.2, Business Case Lecture 4 Read pages 61 to 73 and pages 279 to 283 of Managing Successful Projects plus, Appendices: A.16, Plans A.17, Product Description A.21, Project Product Description Lecture 5 Read pages 101 to 110 of Managing Successful Projects, and Appendices: A.3, Checkpoint Report A.7, Daily Log A.8, End Project Report A.9, End Stage Report A.11, Highlight Report A.12, Issue Register A.14, Lessons Log A.15, Lessons Report A.18, Product Status Account A.23 Quality Register A.25, Risk Register A.26 Work Package Lecture 6 Read Pages 47 to 58 of Managing Successful Projects and Appendix A.22, Quality Management Strategy Lecture 7 Read pages 91 to 97 of Managing Successful Projects and Appendices: A.5, Configuration Item Records A.6, Configuration Management Strategy A.12, Issue Register A.13, Issue Report A.18, Product Status Account Lecture 8 Read pages 77 to 88 of Managing Successful Projects and Appendices: A.24, Risk Management Strategy A.25, Risk Register Seminar 1 Read the Czech Razorbacks case study in the Student Guide. Read pages 113 to 145 of Managing a Successful Project plus Appendices: A.2, Business Case A.7, Daily Log A.14, Lessons Log A.16, Plans A.21, Project Product Description A.19, Project Brief Seminar 2 Memorize the composition section of Appendix A.19, Project Brief Seminar 3 Read Pages 149 to 164 of Managing Successful Projects plus Appendices: A.20, Project Initiation Documentation A.4, Communication Management Strategy A.6, Configuration Management Strategy A.22, Quality Management Strategy A.24, Risk Management Strategy A.16, Plans A.2 Business Case A.1, Benefits Review Plan Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 9 of 121 Lecture / Seminar Required Reading Prior to Class Seminar 4 Memorize the composition section of each document in the PID and the PID itself Seminar 5 Read pages 167 to 202 of Managing Successful Projects and Appendices: A.3, Checkpoint Report A.5, Configuration Item Records A.7, Daily Log A.9, End Stage Report A.10, Exception Report A.11, Highlight Report A.12, Issue Register A.13, Issue Report A.14, Lessons Log A.23, Quality Register A.25, Risk Register A.26, Work Package Seminar 07 Read pages 205 to 212 of Managing Successful Projects and Appendix A.8, End Project Report Seminar 08 Read about premature closure and review log, register and document creation exercises Seminar 09 Read Appendix B of the Student Manual Seminar 11 Study for the exam 7 GRADING Type Description Duration Date (%) Graded Activity 1 Project Initiation Documentation 60 min Wednesday, April 19, 2017 10 Graded Activity 2 Delivery Stage Activities 60 min Wednesday, April 26, 2017 15 Graded Activity 3 Closure 60 min Wednesday, May 3, 2017 15 Exam Foundation Exam 60 min Wednesday, May 17, 2017 60 Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 10 of 121 Section III - Pre-course Reading and Instructions The material contained in this section has been extracted from Managing Successful Projects with PRINCE2®, 2009 Edition. Copyright © AXELOS Limited 2009. Material is reproduced here under licence from AXELOS. 1 INTRODUCTION TO PRINCE2 PRINCE2 (Projects in a Controlled Environment) is a structured project management method based on experience drawn from thousands of projects – and from the contributions of countless project sponsors, Project Managers, project teams, academics, trainers and consultants. This manual is designed:  For entry-level project management personnel wishing to learn about project management generally and the PRINCE2 method in particular.  For experienced Project Managers and personnel who wish to learn about the PRINCE2 method.  As a detailed reference source for PRINCE2 practitioners.  As a source of information on PRINCE2 for managers considering whether to adopt the method. The manual covers the questions frequently asked by people involved in project management and support roles. These questions include:  What is expected of me?  What does the Project Manager do?  What do I do if things don’t go to plan?  What decisions am I expected to make?  What information do I need or must I supply?  Who should I look to for support? For direction?  How can I tailor the use of PRINCE2 for my project? 1.1 The importance of projects A key challenge for organizations in today’s world is to succeed in balancing two parallel, competing imperatives:  To maintain current business operations – profitability, service quality, customer relationships, brand loyalty, productivity, market confidence etc. What we term ‘business as usual.’  To transform business operations in order to survive and compete in the future – looking forward and deciding how business change can be introduced to best effect for the organization. As the pace of change (technology, business, social, regulatory etc.) accelerates, and the penalties of failing to adapt to change become more evident, the focus of management attention is inevitably moving to achieve a balance between business as usual and business change. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 11 of 121 Projects are the means by which we introduce change – and, while many of the skills required are the same, there are some crucial differences between managing business as usual and managing project work. 1.2 What makes projects different? “A project is a temporary organization that is created for the purpose of delivering one or more business products according to an agreed Business Case.” There are a number of characteristics of project work that distinguish it from business as usual:  Change Projects are the means by which we introduce change.  Projects are temporary in nature. Once the desired change has been implemented, business as usual resumes (in its new form) and the need for the project is removed. Projects should have a defined start and a defined end.  Cross-functional Projects involve a team of people with different skills working together (on a temporary basis) to introduce a change that will impact others outside the team. Projects often cross the normal functional divisions within an organization and sometimes span entirely different organizations. This frequently causes stresses and strains both within organizations and between, for example, customers and suppliers. Each has a different perspective and motivation for getting involved in the change.  Every project is unique. An organization may undertake many similar projects, and establish a familiar, proven pattern of project activity, but each one will be unique in some way: a different team, a different customer, a different location. All these factors combine to make every project unique.  The characteristics already listed will introduce threats and opportunities over and above those we typically encounter in the course of business as usual; projects are more risky. 1.3 Why have a project management method? Project management is the planning, delegating, monitoring and control of all aspects of the project, and the motivation of those involved, to achieve the project objectives within the expected performance targets for time, cost, quality, scope, benefits and risks. It is the development of the project’s deliverables (known as products in PRINCE2) that deliver the project’s results. A new house is completed by creating drawings, foundations, floors, walls, windows, a roof, plumbing, wiring and connected services. None of this is project management – so why do we need project management at all? The purpose of project management is to keep control over the specialist work required to create the project’s products or, to continue with the house analogy, to make sure the roofing contractor does not arrive before the walls are built. Additionally, given that projects are the means by which we introduce business change, and that project work entails a higher degree of risk than other business activity, it follows that implementing a secure, consistent, well-proven approach to project management is a valuable business investment. 1.4 Introducing PRINCE2 PRINCE2 is a non-proprietary method and has emerged worldwide as one of the most widely accepted methods for managing projects. This is largely due to the fact that PRINCE2 is truly generic: it can be applied to any project regardless of project scale, type, organization, geography or culture. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 12 of 121 PRINCE2 achieves this by isolating the management aspects of project work from the specialist contributions, such as design, construction etc. The specialist aspects of any type of project are easily integrated with the PRINCE2 method and, used alongside PRINCE2, provide a secure overall framework for the project work. Because PRINCE2 is generic and based on proven principles, organizations adopting the method as a standard can substantially improve their organizational capability and maturity across multiple areas of business activity – business change, construction, IT, mergers and acquisitions, research, product development and so on. In order to achieve control over anything, there must be a plan. It is the Project Manager who plans the sequence of activities to build the house, works out how many bricklayers will be required and so on. It may be possible to build the house yourself – but being a manager implies that you will student some or all of the work to others. The ability to student is important in any form of management but particularly so (because of the cross-functionality and risks) in project management. With the studentd work under way, the aim is that it should ‘go according to plan’, but we cannot rely on this always being the case. It is the Project Manager’s responsibility to monitor how well the work in progress matches the plan. Of course, if work does not go according to plan, the Project Manager has to do something about it, for example, exert control. Even if the work is going well, the Project Manager may spot an opportunity to speed it up or reduce costs. Whether it is by taking corrective action or implementing measures to improve performance, the aim of PRINCE2 is to make the right information available at the right time for the right people to make the right decisions. There are six variables involved in any project, and therefore six aspects of project performance to be managed:  Costs: The project has to be affordable and, though we may start out with a particular budget in mind, there will be many factors which can lead to overspending and, perhaps, some opportunities to cut costs.  Timescales: Allied to this, and probably the next most-frequent question asked of a Project Manager, is: ‘When will it be finished?’  Quality: Finishing on time and within budget is not much consolation if the result of the project does not work. In PRINCE2 terms, the project’s products must be fit for purpose. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 13 of 121  Scope: Exactly what will the project deliver? Without knowing it, the various parties involved in a project can very often be talking at cross-purposes about this. The customer may assume that, for instance, a fitted kitchen and/or bathroom is included in the price of the house, whereas the supplier views these as ‘extras’. On large-scale projects, scope definition is much more subtle and complex. There must be agreement on the project’s scope, and the Project Manager needs to have a detailed understanding of what is and what is not within the scope. The Project Manager should take care not to deliver beyond the scope as this is a common source of delays, overspends and uncontrolled change (‘scope creep’).  Risk: All projects entail risks, but exactly how much risk are we prepared to accept? Should we build the house near the site of a disused mine, which may be prone to subsidence? If we decide to go ahead, is there something we can do about the risk? Maybe insure against it or have thorough surveys carried out?  Benefits: Perhaps most often overlooked is the question, ‘Why are we doing this?’ It is not enough to build the house successfully on time, within budget and to quality specifications if, in the end, we cannot sell or rent it at a profit or live in it happily. The Project Manager has to have a clear understanding of the purpose of the project as an investment and make sure that what the project delivers is consistent with achieving the desired return. PRINCE2 is an integrated framework of processes and themes that addresses the planning, delegation, monitoring and control of all these six aspects of project performance. The PRINCE2 method addresses project management with four integrated elements of principles, themes, processes and the project environment. The principles (Chapter 2) are the guiding obligations and good practices which determine whether the project is genuinely being managed using PRINCE2. There are seven principles, and unless all of them are applied, it is not a PRINCE2 project. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 14 of 121 The themes (Chapters 3 to 10) describe aspects of project management that must be addressed continually and in parallel throughout the project. The seven themes explain the specific treatment required by PRINCE2 for various project management disciplines, and why they are necessary. The processes (Chapters 11 to 18) describe a step-wise progression through the project lifecycle, from getting started to project closure. Each process provides checklists of recommended activities, products and related responsibilities. Tailoring PRINCE2 to the project environment (Chapter 19) addresses the need to tailor PRINCE2 to the specific context of the project. PRINCE2 is not a ‘one size fits all’ solution; it is a flexible framework that can readily be tailored to any type or size of project. It is not intended (or possible) for PRINCE2 to cover every aspect of project management. There are three broad topic categories which are deliberately considered to be outside the scope of PRINCE2:  Specialist aspects. PRINCE2’s strength is in its wide applicability – it is entirely generic. Consequently, industry-specific or type-specific activity is excluded. Engineering models, project lifecycles or specific techniques (such as organizational change management or procurement) can readily be used alongside PRINCE2. PRINCE2 categorizes all of these aspects of project work as ‘specialist’ (which means that the specialist products concerned need to be identified and included within project scope and plans).  Detailed techniques. There are many proven planning and control techniques that can be used in support of the PRINCE2 themes. Examples are critical path analysis (in planning) and earned value analysis (in progress control). Such techniques are well documented elsewhere. Only techniques that have a specific PRINCE2 approach are described, e.g. the product-based planning and quality review techniques.  Leadership capability. Leadership, motivational skills and other interpersonal skills are immensely important in project management but impossible to codify in a method. Leadership styles vary considerably, and a style that works in one situation may be entirely inappropriate in another. The fact that it is easy to think of successful leaders who have adopted very different styles – from autocratic to consensus-based – bears this out. For this reason, PRINCE2 cannot address this aspect of project management directly. There are many leadership models and interpersonal-skills training programmes that fulfil this requirement. 1.5 Benefits of PRINCE2 Before introducing the structure of the method, it is worthwhile reviewing the key benefits of adopting PRINCE2:  PRINCE2 embodies established and proven best practice and governance for project management. It can be applied to any type of project – and can easily be implemented alongside specialist, industry-specific models (‘engineering models’ or ‘development lifecycles’).  PRINCE2 is widely recognized and understood, and therefore provides a common vocabulary for all project participants – promoting effective communication.  PRINCE2 provides for the explicit recognition of project responsibilities – so that participants understand each other’s roles and needs. There is a defined structure for accountability, delegation, authority and communication.  Its product focus clarifies (for all parties) what a project will deliver, why, when, by whom and for whom. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 15 of 121  PRINCE2 plans are carefully designed to meet the needs of the different levels in the management team, improving communication and control.  It is based on a ‘management by exception’ framework, providing for the efficient and economic use of management time (whether at corporate, programme, Project Board or project management levels).  PRINCE2 ensures that participants focus on the viability of the project in relation to its Business Case objectives – rather than simply seeing the completion of the project as an end in itself.  It defines a thorough but economical structure of reports.  It ensures that stakeholders (including sponsors and resource providers) are properly represented in planning and decision making.  Adopting PRINCE2 promotes learning and continual improvement in organizations.  PRINCE2 promotes consistency of project work and the ability to reuse project assets; it also facilitates staff mobility and reduces the impact of personnel changes/handovers.  PRINCE2 is an invaluable diagnostic tool, facilitating the assurance and assessment of project work, troubleshooting and audits.  There are scores of accredited training and consultancy organizations (ATOs and ACOs) operating worldwide, who can supply expert support for PRINCE2 projects or for organizations planning to adopt PRINCE2. 2 INTRODUCTION TO PRINCE2 PRINCIPLES The purpose of PRINCE2 is to provide a project management method that can be applied regardless of project scale, type, organization, geography or culture. This is possible because PRINCE2 is principles-based. Principles are characterized as:  Universal in that they apply to every project.  Self-validating in that they have been proven in practice over many years.  Empowering because they give practitioners of the method added confidence and ability to influence and shape how the project will be managed. The principles on which PRINCE2 is based originate from lessons learned from projects both good and bad. They provide a framework of good practice for those people involved in a project. If a project does not adhere to these principles, it is not being managed using PRINCE2, because the principles are the basis of what defines a PRINCE2 project. The seven PRINCE2 principles can be summarized as:  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. It is the adoption of these principles that characterizes whether a project is using PRINCE2; the adoption of processes and documents alone does not fully define its usage. The principles facilitate good use of PRINCE2 by ensuring that the method is not applied in an overly prescriptive way or in name only, but it is applied in a way that is sufficient to contribute to the success of the project. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 16 of 121 2.1 Continued business justification A PRINCE2 project has continued business justification. A requirement for a PRINCE2 project is that:  There is a justifiable reason to start it.  The justification should remain valid throughout the life of the project.  The justification is documented and approved. In PRINCE2, the justification is documented in a Business Case. As a project is inextricably linked to its business justification, it drives the decision-making processes to ensure that the project remains aligned to the business objectives and benefits being sought. Organizations that lack rigour in developing Business Cases may find that some projects proceed even where there are few real benefits, or where a project has only tentative associations with corporate strategy. Poor alignment with corporate strategies can also result in organizations having a portfolio of projects that have mutually inconsistent or duplicated objectives. Even projects that are compulsory (for example, to comply with new legislation) require justification of the option chosen, as there may be several options available that yield different costs, benefits and risks. Although the justification should remain valid, it may change. It is therefore important that the project and evolving justification remain consistent. If, for whatever reason, the project can no longer be justified, the project should be stopped. Stopping a project in these circumstances is a positive contribution to an organization as its funds and resources can be reinvested in other more worthwhile projects. 2.2 Learn from experience PRINCE2 project teams learn from previous experience: lessons are sought, recorded and acted upon throughout the life of the project. Projects involve a temporary organization for a finite timescale for a specific business purpose. A common characteristic is that the project includes an element of uniqueness such that it cannot be managed by existing line management or functional units. It is this element of uniqueness that makes projects challenging as the temporary team may not have experience of a project like the one being undertaken. In PRINCE2, learning from experience permeates the method:  When starting a project: previous or similar projects should be reviewed to see if lessons learned could be applied. If the project is a ‘first’ for the people within the organization, then it is even more important to learn from others, and the project should consider seeking external experience.  As the project progresses: the project should continue to learn. Lessons should be included in all reports and reviews. The goal is to seek opportunities to implement improvements during the life of the project.  As the project closes: the project should pass on lessons. Unless lessons provoke change, they are only lessons identified (not learned). It is the responsibility of everyone involved with the project to seek lessons learned rather than waiting for someone else to provide them. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 17 of 121 2.3 Defined roles and responsibilities A PRINCE2 project has defined and agreed roles and responsibilities within an organization structure that engages the business, user and supplier stakeholder interests. Projects involve people; no amount of good planning or control will help if the wrong people are involved, if the right people are not involved, or if people involved do not know what’s expected of them or what to expect of others. A project is typically cross-functional, may involve more than one organization, and may involve a mixture of full-time and part-time resources. The management structures of the parties involved in the project are likely to be different – with different priorities, objectives and interests to protect. The day-to-day line management structures may not be designed for, or suited to, project work. To be successful, projects must have an explicit project management team structure consisting of defined and agreed roles and responsibilities for the people involved in the project. This requires a means for effective communication between them. All projects have the following primary stakeholders:  ‘Business’ sponsors who endorse the objectives and ensure that the business investment provides value for money.  ‘Users’ who, after the project is completed, will use the products to enable them to gain the intended benefits.  ‘Suppliers’ who provide the resources and expertise required by the project (these may be internal or external). Therefore, all three stakeholder interests need to be represented effectively in the project management team – two out of three is not enough. If the project costs outweigh the benefits, the project will fail. Equally, if the outcome of the project does not meet the users’ or operational needs, or cannot feasibly be delivered by the suppliers, failure is inevitable. The defined project management team structure unites the various parties in the common aims of the project. For all those people involved, a defined project management team structure provides the answer to the question, ‘What is expected of me?’ 2.4 Manage by stages A PRINCE2 project is planned, monitored and controlled on a stage-by-stage basis. Management stages provide senior management with control points at major intervals throughout the project. At the end of each stage, the project’s status should be assessed, the Business Case and plans reviewed to ensure that the project remains viable, and a decision made as to whether to proceed. Breaking the project into a number of stages enables the extent of senior management control over projects to be varied according to the business priority, risk and complexity involved. Shorter stages offer more control, while longer stages reduce the burden on senior management. Planning can only be done to a level of detail that is manageable and foreseeable. A great deal of effort can be wasted on attempts to plan beyond a sensible planning horizon. For example, a detailed plan to show what each team member is doing for the next 12 months will almost certainly be inaccurate after just a few weeks. A detailed Team Plan for the short term, and an outline plan for the long term is a more effective approach. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 18 of 121 PRINCE2 overcomes the planning horizon issue by:  Dividing the project into a number of management stages.  Having a high-level Project Plan and a detailed Stage Plan (for the current stage).  Planning, delegating, monitoring and controlling the project on a stage-by-stage basis. PRINCE2 requires there to be a minimum of two management stages: one initiation stage and one or more further management stages. 2.5 Manage by exception A PRINCE2 project has defined tolerances for each project objective to establish limits of studentd authority. PRINCE2 enables appropriate governance by defining distinct responsibilities for directing, managing and delivering the project and clearly defining accountability at each level. Accountability is established by:  Delegating authority from one management level to the next by setting tolerances against six objectives for the respective level of the plan:  Time Plus or minus an amount of time on the target completion dates.  Cost Plus or minus an amount of the planned budget.  Quality Plus or minus degrees off a quality target (e.g. a product that weighs a target 300 g, with an allowed -5 g to +10 g tolerance).  Scope Permissible variation of the plan’s products (e.g. mandatory requirements plus or minus desirable requirements).  Risk Limits on the plan’s aggregated risks (e.g. cost of aggregated threats to remain less than 10% of the plan’s budget) or limits on any individual threat (e.g. a threat to operational service).  Benefit Plus or minus degrees off an improvement goal (e.g. 30–40% cost reduction).  Setting up controls so that if those tolerances are forecast to be exceeded, they are immediately referred up to the next management layer for a decision on how to proceed.  Putting an assurance mechanism in place so that each management layer can be confident that such controls are effective. This implementation of ‘management by exception’ provides for very efficient use of senior management time as it reduces senior managers’ time burden without removing their control by ensuring decisions are made at the right level in the organization. 2.6 Focus on products A PRINCE2 project focuses on the definition and delivery of products, in particular their quality requirements. A successful project is output-oriented not activity-oriented. An output-oriented project is one that agrees and defines the project’s products prior to undertaking the activities required to produce them. The set of agreed products defines the scope of a project and provides the basis for planning and control. The purpose of a project is to fulfil stakeholder expectations in accordance with the business justification, and to do this, there must be a common understanding of the products required and the quality expectations for them. The purpose of a project can be interpreted in many different ways. To secure the project’s meaning, there should be an explicit understanding of the products Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 19 of 121 to be produced, and the criteria against which they will be individually approved should be specified. A PRINCE2 project uses Product Descriptions to provide such clarity by defining each product’s purpose, composition, derivation, format, quality criteria and quality method. They provide the means to determine effort estimates, resource requirements, dependencies and activity schedules. The ‘product focus’ supports almost every aspect of PRINCE2: planning, responsibilities, status reporting, quality, change control, scope, configuration management, product acceptance and risk management. Without a product focus, projects are exposed to several major risks such as acceptance disputes, rework, uncontrolled change (‘scope creep’), user dissatisfaction and underestimation of acceptance activities. 2.7 Tailor to suit the project environment PRINCE2 is tailored to suit the project’s environment, size, complexity, importance, capability and risk. The value of PRINCE2 is that it is a universal project management method that can be applied regardless of project type, organization, geography or culture. It can be used by any project because the method is designed to be tailored to its specific needs. If PRINCE2 is not tailored, it is unlikely that the project management effort and approach are appropriate for the needs of the project. This can lead to ‘robotic’ project management at one extreme (the method is followed without question) or ‘heroic’ project management at the other extreme (the method is not followed at all). The purpose of tailoring is to:  Ensure the project management method relates to the project’s environment (e.g. aligning the method to the business processes that may govern and support the project, such as human resources, finance and procurement).  Ensure that project controls are based on the project’s scale, complexity, importance, capability and risk (e.g. the reporting and reviewing frequency and formality). Tailoring requires the Project Manager and the Project Board to make an active decision on how the method will be applied, for which guidance is provided. When tailoring PRINCE2, it is important to remember that it requires information (not necessarily documents) and decisions (not necessarily meetings). To ensure that all those people involved with the project understand how PRINCE2 is to be used, the Project Initiation Documentation should state how the method is being tailored for that particular project. 3 INTRODUCTION TO PRINCE2 THEMES The PRINCE2 themes describe aspects of project management that must be addressed continually. Any Project Manager who gives thorough attention to these themes will fulfil the role in a professional manner. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 20 of 121 However, the strength of PRINCE2 is the way in which the seven themes are integrated, and this is achieved because of the specific PRINCE2 treatment of each theme (i.e. they are carefully designed to link together effectively). The PRINCE2 processes address the chronological flow of the project – with actions relating to different themes mixed together. Here, the logical thread that runs through each theme is highlighted, and more detailed guidance is provided in order to amplify the process activities. The following table taken from the manual lists the seven PRINCE2 themes and the relevant chapter. 3.1 Applying the themes All seven themes must be applied in a project, but they should be tailored according to the scale, nature and complexity of the project concerned. Themes can be tailored ‘up’ or ‘down’. That is to say, additional detailed documentation and process discipline can be introduced for complex or high-risk projects, whereas concise bulletpoint presentations and more informal processes may be adequate for simple, low-risk projects. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 21 of 121 4 INTRODUCTION TO PRINCE2 PROCESSES PRINCE2 is a process-based approach for project management. A process is a structured set of activities designed to accomplish a specific objective. It takes one or more defined inputs and turns them into defined outputs. There are seven processes in PRINCE2, which provide the set of activities required to direct, manage and deliver a project successfully. The figure below shows how each process is used throughout a project’s life. The Project Board sets direction and makes key decisions throughout the life of the project. The Project Board’s activities are covered by the Directing a Project process (Chapter 13), which runs from pre-project through to, and including, the final stage. 4.1 Pre-project In the beginning, someone has an idea or a need. This may result from new business objectives, responding to competitive pressures, changes in legislation, or a recommendation in a report or an audit. The trigger for the project could be almost anything. In PRINCE2, this trigger is called a project mandate. The project mandate is provided by the commissioning organization (corporate or programme management) and can vary in form from a verbal instruction to a well-defined and justified project definition. Prior to the activity to fully scope the project, it is important to verify that the project is worthwhile and viable. Such activities are covered by the process Starting up a Project (Chapter12), which culminates in the production of a Project Brief and a Stage Plan for project initiation. The Project Board reviews the Project Brief and decides whether to initiate the project. They then state the levels of authority to be studentd to the Project Manager for the initiation stage. 4.2 Initiation stage Once there is a decision that approves the project, it needs to be planned in detail. Funding needs to be obtained, and controls should be defined to ensure that the project proceeds in accordance with the wishes of those who are paying for the process and those who are making use of the final Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 22 of 121 products. The detailed planning, establishment of the project management strategies and controls, development of a robust Business Case, and a means of reviewing benefits are covered by the Initiating a Project process (see Chapter 14). Also, during the initiation stage, the Managing a Stage Boundary process (Chapter 17) is used to plan the next stage in detail. The initiation stage culminates in the production of the Project Initiation Documentation, which is reviewed by the Project Board to decide whether to authorize the project. As the contents of the Project Initiation Documentation are likely to change throughout the project (under change control), this version of the Project Initiation Documentation is preserved as input for later performance reviews. 4.3 Subsequent delivery stages The Project Board students day-to-day control to the Project Manager on a stage-by-stage basis. The Project Manager needs to assign work to be done, ensure that the outputs of such work (products) meet relevant specifications, and gain suitable approval where appropriate. The Project Manager also needs to ensure that progress is in line with the approved plan and that the forecasts for the project’s performance targets are within agreed tolerances. The Project Manager ensures that a set of project records (Daily Log, Lessons Log, Issue Register, Risk Register, Quality Register and Configuration Item Records) are maintained to assist with progress control. The Project Manager informs the Project Board of progress through regular Highlight Reports. The activities to control each stage are covered by the Controlling a Stage process (Chapter15). In the Managing Product Delivery process (Chapter16), the Team Manager(s) or team members execute assigned Work Packages (that will deliver one or more products) and keep the Project Manager appraised of progress via Checkpoint Reports. Towards the end of each management stage, the Project Manager requests permission to proceed to the next stage by reporting how the stage performed, providing an update to the Business Case and planning the next management stage in detail. The Project Manager provides the information needed by the Project Board in order for it to assess the continuing viability of the project and to make a decision to authorize the next management stage. The activities to manage each stage boundary are covered in the Managing a Stage Boundary process (Chapter17). 4.4 Final delivery stage As a project is a temporary undertaking, during the final stage (once the Project Manager has gained approval for all of the project’s products) it is time to decommission the project. The Project Board needs to be satisfied that the recipients of the project’s products are in a position to own and use them on an ongoing basis. Should this be the case, the products can be transitioned into operational use and the project can close. The project documentation should be tidied up and archived; it should be assessed for performance against its original plan, and the resources assigned to the project need to be released. The closure activities include planning post-project benefits reviews to take place for those benefits that can only be assessed after the products have been in use (and therefore after the project has closed). The activities to decommission a project are covered by the Closing a Project process (Chapter18). The PRINCE2 process model is shown below. The processes are aligned to the management levels of corporate or programme, directing, managing and delivering. The triggers between each process are shown. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 23 of 121 Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 24 of 121 Section IV - Case Study & Seminar Exercises Learning exercises based on the case study contained in Appendix A will be undertaken during the seminar sessions. These exercises have been developed to help you work through a PRINCE2 Project in the classroom. The goal is to enable you to experience the proper use of the themes, determine the correct content of the management products, and help you gain experience in determining the correct course of action given numerous, events within the context of a given project scenario. To facilitate this, we will introduce each of the exercises and explain the context in which you or your team is to operate. If you have any questions during the course of the exercise, do not hesitate to ask, our job is to facilitate a positive learning environment. 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Reproduced under licence from AXELOS Limited 2 PRINCE2 MANAGEMENT BY STAGES Based on AXELOS PRINCE2® material. Reproduced under licence from AXELOS Limited Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 110 of 121 3 PRINCE2 LIFECYCLE Based on AXELOS PRINCE2® material. Reproduced under licence from AXELOS Limited Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 111 of 121 Appendix A - Case Study Czech Razorbacks Hockey Club Note: The story, all names, characters, and incidents portrayed in this scenario are fictitious. No identification with actual persons, places, organisations, buildings, and products is intended or should be inferred. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 112 of 121 Czech Razorbacks Hockey Club The Czech Razorbacks are a professional hockey team that play in the World Wide Hockey Association (WWHA). The team has existed for many years and has won the Global Hockey Cup four times. In recent years, the team has struggled to attract top talent and has suffered from the internet broadcasting of National League Hockey games. On-line sports broadcasting has eroded their fan base and substantially reduced merchandise sales. The current merchandise line-up has not been updated in 10 years and does not appeal to most fans or consumers. With annual revenues of 250.000.000 Kč, the team barely breaks even. Annual payments of 10.000.000 Kč to service the debt load and about 240.000.000 Kč in team operations, including 150.000.000 Kč in salaries, continually leave the team lacking in development funds. A recent restructuring brought a seasoned hockey management professional to the Razorback organisation. Brian Bednařík recently became the third managing director in the team’s history. He has been working hard to determine how the team could raise public awareness and at the same time increase profits in order to develop a more competitive team. After doing some basic research he has decided that a new merchandising strategy should be developed. Two other options that he considered included:  Running hockey camps for amateur hockey players using professional players as coaches to generate a larger fan base.  Sourcing the clubs merchandise from China to drastically reduce costs and increasing the retail prices to create higher margins leading to a more profitable situation. After consulting with various stakeholders within the organisation it was determined that neither of these latter options were optimal. Although running hockey camps might raise brand awareness, it may not result in substantial increases in merchandise sales. Sourcing the merchandise from China and raising prices was seen as having a potential positive impact on revenues, but the risk to an already fragile brand image of selling inferior quality merchandise at premium prices was seen as unacceptable. In deciding that a new merchandising strategy was the correct option, it was also agreed that merchandise quality was to remain high, should reflect a quality image for the team and, where possible, be sourced from Czech manufacturers. Suggestions that all t-shirts and hoodies should be 100% cotton and that T-shirts should be silkscreen while hoodies should be embroidered were also discussed. It was also agreed that this new strategy needs to be developed using a project and Bednařík wishes the project to be run using the PRINCE2 method. To this end he has created a Project Mandate (attached at Appendix A) which he has had approved by the Vice-President of Media, Marketing & Sales, Věra Violetová who would have the responsibility of implementing the strategy once it was approved by the Project Board. Funding of the Project would also be her responsibility and would be taken from her budget. One of the major issues that faces Bednařík and the use of PRINCE2 is that many in the organisation do not understand the methodology while others feel it is too bureaucratic. Past attempts to run projects using the method failed and cost overruns have occurred. Karina Horáková, the financial Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 113 of 121 controller, has been very outspoken on the topic and wants nothing to do with PRINCE2. She sees it as a complete waste of money and time and believes its only purpose is to generate revenue for the UK National Health Service. The Project would be run in four stages: STAGE 1: Brand recognition merchandise preference survey and conclusions. The survey would collect demographic and geographic brand recognition data as well as data regarding WWHA preferences, team loyalty, consumer product preferences for Czech Razorback hockey merchandise, and pricing sensitivity by product. STAGE 2: New Merchandise Product Specifications. Once it has been determined what the new merchandising lineup should include and a pricing sensitivity model has been established, new merchandise specifications will be created and a comprehensive search for high potential suppliers will be undertaken. A list of possible vendors will be created. STAGE 3: Supply and Distribution Chain Strategies. Vendors from the list created in Stage 2 will be contacted and requested to submit volume pricing proposals and will be interviewed regarding a long-term supply relationship. Once the search is completed, a shortlist of venders willing to partner with the team will be created along with their volume pricing proposals. Based on the results from Stage 1 through 3 a comprehensive distribution chain analysis will be undertaken. Distribution chains will be analyzed for suitability based on the various research findings. STAGE 4: Merchandise Strategy Creation. Using all of the information and reports generated in all of the previous Stages, a new, comprehensive Merchandising Strategy will be compiled. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 114 of 121 Organisational Structure Personnel Profiles of Potential Project Personnel Brian Bednařík, Managing Director Brian Bednařík became the third managing director in the team’s history on December 11, 2015. He has 25 years of achievements as a commercially astute Finance Director. He understands financial control, and his cross-functional experience brings breadth to Board level decision making. He is a multilingual communicator, whose team building, strategic vision, analysis and creativity have identified and solved complex problems. He is particularly known for his proactive application of change and risk management. Before joining the club, he served as the Vicepresident of Finance for a number of NHL hockey clubs in the United States. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 115 of 121 Bednařík joined the hockey team because of his love for Czech hockey and his desire to make the Czech Razorbacks the top European team in the league. He spends approximately 50% of his time in the office and the balance attending league functions, benefits, and promotional events. When in the office, he has no time to deal with daily operational tasks, leaving this to his Vice-president of Operations. Currently he is working hard to understand the organization and to develop a strategic plan focused on the next five years. Radek Bosý, Vice-President, Operations Radek Bosý is a young professional and was recently named as the Vice-president of Operations by Brian Bednařík. Bosý has a Masters in Sports Business Management and has a background in hockey operations at both the minor league and professional level. He has also worked in a variety of other positions within the world of hockey including merchandising, marketing, and facilities management. His experience has taught him that hard work always pays off and he knows he will need a strong work ethic to make it as the new Vice president of Operations. He is thrilled to be part of the Czech Razorbacks and dreams of one day becoming a NHL General Manager. He has excellent interpersonal skills and is a true team player and motivator. Bosý looks forward to working on new projects for the team and wants to learn about PRINCE2. Věra Violetová, Vice-President, Media, Marketing & Sales Věra Violetová is a hands-on executive with over 20 years of progressive experience specializing in call centre management in the fashion industry. She joined the Razorbacks shortly before Bednařík. She was hired for her experience executing business strategies in start-up, high growth, turn-around, and established high volume contact call centre environments. She has a keen focus on service and operational excellence and continual quality improvement to increase customer satisfaction and internal efficiency. Violetová has repeated success in partnering with cross-functional teams and personnel at varying levels within organizations to improve service levels, revenues, and profitability. She is in charge of the entire Media, Marketing, and Sales section of the organisation. Karel Heinz, Broadcast Engineer Karel Heinz has been with the organisation since day one. He started as a junior technician and has worked his way up to the Senior Broadcast Engineer position. He is in charge of all technical electronics aspects of the organisation. He is hard working, fast thinking, quick to learn and easily approachable. He has been responsible for ensuring that the organisation implements technology changes in a systematic and cost effective manner. In doing so he has proven to be an excellent problem solver and analytical thinker. He is a strong communicator who is able to give and receive instructions while also working well in a team approach. He is well respected within the organisation. Heinz reports to Věra Violetová, Vice-President, Media, Marketing & Sales. Jiřina Nováková, Director, Sales & Marketing Jiřina Nováková is a business leader with a proven track record of building high performing marketing teams and accelerating revenue growth. With a strong background in demand generation, she excels at building scalable integrated campaigns that leverage cutting edge marketing techniques. Although performance is at the core of who she is as a marketer, she believes businesses need to tell compelling stories and build a brand if they want to own a category. She reports directly to Věra Violetová, Vice-President, Media, Marketing & Sales. Lenka Procházková, Merchandise Manager Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 116 of 121 Lenka Procházková started with the organisation as an intern working directly for the office manager, Natálie Svobodová. Procházková quickly learned how to oversee the document management and tracking system, memorized all the corporate operational procedures, and developed and implemented a full set of document templates incorporating the new visual identity guidelines. She has a Master degree from Masaryk University in economics and recently passed her PRINCE2 Foundation Exam. During her internship she impressed Věra Violetová, VicePresident, Media, Marketing & Sales and her new boss, Jiřina Nováková, Director, Sales & Marketing so much that they decided to create the Merchandise Manager position for her. She is a very meticulous individual who has a keen focus on quality. Natálie Svobodová, Office Manager Natálie Svobodová is an experienced office manager with over 20 years in general administration and customer service. She has a proven track record of managing teams and achieving excellent results in various Industries including commercial printing, contract marketing, consumer research, and industrial sales. She is excellent at engaging stakeholders at all levels of the organisation and the creation of cost effective solutions to support the achievement of the business targets. Reporting directly to Radek Bosý, Vice-President, Operations, Svobodová is responsible for ensuring all administration processes are aligned to the company internal systems and are followed. She manages the day-to-day office duties including HR related matters, Health & Safety Compliance, adherence to the quality management process, and ensures all standard operating procedures are followed by each of the functional groups. Karina Horáková, Controller Karina Horáková has worked for the Czech Razorbacks for the past year and a half. Prior to starting with the organisation, Horáková worked for 12 years as a chartered accountant, where she witnessed many small and medium sized enterprises struggling to survive. She was hired by the previous Managing Director to streamline the organisation and implement austerity measures in an effort to stem the trend of annual losses. Horáková duties revolve around ensuring that the business is operating effectively and efficiently while also managing the Accounting Department and monitoring internal controls. She also oversees all procurement and supplier contracting functions. She is an excellent analyst and report writer with a focus on doing more with less. Horáková reports directly to Radek Bosý, Vice-President of Operations. Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 117 of 121 Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 118 of 121 Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 119 of 121 Business Projects & PRINCE2® Student Guide BPH-BUPR-SG-2017-01 Page 120 of 121 Appendix B - Exam Guidance Version 1.8 (Status –Live) Page 1 Document Owner : Product Manager Aligned to Version 1.0 of the OTE Foundation Candidate Guidance © The APM Group Ltd 2013. This document is not to be reproduced or re-sold without express permission from The APM Group Ltd. PRINCE2® is a Registered Trade Mark of AXELOS Limited. PRINCE2® FOUNDATION EXAMINATION CANDIDATE GUIDANCE 1 INTRODUCTION 1.1 The objective of the examination is to enable you to demonstrate an understanding of the PRINCE2 principles, processes, themes, techniques and roles. The Foundation examination uses objective test questions, which require you to choose a response to a question from a set of choices, for which the correct answer is predetermined. 1.2 The following paragraphs explain the format of the question papers, and the different styles of question asked. There are also some suggestions on how to approach answering the various styles of question. 2 STRUCTURE OF THE PAPER The examination paper consists of: 2.1 A Question Booklet, which contains 75 questions - 70 examination questions and 5 trial questions. Each question covers a different syllabus topic. Each question is worth 1 mark, but the trial questions are not scored. The use of trial questions enables new questions to be trialled without affecting candidates’ marks. The pass mark is 35. You are expected to answer all questions. There will be no indication of which questions are examination questions and which are trial. 2.2 The Answer Sheet on which your answers must be given. There will only ever be one answer to each question. If more than one answer is given in the answer sheet the response line will be void and will attract no marks. Marks are not subtracted for incorrect answers. 3 PRINCE2 SYLLABUS AREAS ADDRESSED The examination consists of 75 questions in total, which cover all 15 areas of the PRINCE2 Foundation syllabus. The full PRINCE2 syllabus is available from the APM Group or from your Accredited Training Organisation. 4 STYLES OF QUESTION There are a number of different test styles used within the paper. All test styles are based on the selection of the correct answer from a choice of 4 options. The test styles are: 4.1 Standard Which individual role is ultimately accountable for the project? a) Executive b) Project Manager c) Senior Supplier d) Senior User Version 1.8 (Status –Live) Page 2 Document Owner : Product Manager Aligned to Version 1.0 of the OTE Foundation Candidate Guidance © The APM Group Ltd 2013. This document is not to be reproduced or re-sold without express permission from The APM Group Ltd. PRINCE2® is a Registered Trade Mark of AXELOS Limited. 4.2 Negative Which is NOT one of the key elements to balance when defining management stages? a) The availability of the Project Board b) How far ahead in the project it is sensible to plan c) The amount of risk within a project d) How confident the Project Board and Project Manager are in proceeding 4.3 Missing Word Identify the missing words in the following sentence. The reasons for undertaking the project must drive the [ ? ] and should be used to continually align the project progress to the business objectives. a) delivery strategy b) decision making c) benefits management strategy d) tolerance approach 4.4 List When reviewing the status of a Work Package, what does the Project Manager look at? 1. Checkpoint Reports 2. Business Case 3. Quality Register 4. Team Plans a) 1, 2, 3 b) 1, 2, 4 c) 1 ,3 ,4 d) 2, 3, 4 5 EDITORIAL NOTES 5.1 Throughout the examination, title case has been used for all references to PRINCE2 themes, processes, defined management products and proper nouns 5.2 Uses of “should” and “must” “should” - is used to express “obligation”: something that is good or important or recommended. It is less strong than must and is used to test whether something should occur because it is consistent with the principles and recommended practices of PRINCE2. “must” is used when talking about something that is “necessary” or “has” to occur, i.e. something that is mandatory. Version 1.8 (Status –Live) Page 3 Document Owner : Product Manager Aligned to Version 1.0 of the OTE Foundation Candidate Guidance © The APM Group Ltd 2013. This document is not to be reproduced or re-sold without express permission from The APM Group Ltd. PRINCE2® is a Registered Trade Mark of AXELOS Limited. 6 TIME MANAGEMENT The examination is 60 minutes in duration. You must manage your time in order to complete all questions. All 75 questions should be attempted. If you wish to write your answers on the question paper first, you must be aware of the additional time needed to complete the answer sheet. Only answers submitted on the answer sheet provided will contribute to the result. No support material is permitted. This is a closed book examination. 7 USING THE ANSWER BOOKLET 7.1 The Answer Booklet will be read electronically and the results generated by computer. It is therefore essential that you follow the instructions given and mark your answers accordingly. Failure to do so may lead to delay and, in some cases, answers being void. 7.2 Select your answer by filling in the ‘oval’ that relates to your chosen response, e.g. A B C D 1 2 3 4 7.3 Fill the oval in IN PENCIL, NOT PEN. If a pen is used, the answers will not be marked. Acceptable ways to complete the answer sheets are either: completely filling in the oval or drawing a line through the centre of the oval, ensuring between 80-100% is filled. Any other method, including ticks or crosses, is not acceptable and may not be marked. 7.4 If you wish to change your answer during the examination, completely erase your original answer and mark your new answer. If there is more than one oval marked for an answer, the question will score zero. Business Projects & PRINCE2® Student Manual BPH-BUPR-SM-2016-01 Page 202 of 202 Appendix C - Business Benefits Paper © The Stationery Office 2010 AXELOS.com PRINCE2® Business Benefi ts Dr. Ian Clarkson, QA White Paper January 2010 © The Stationery Office 2010 Contents 1 Introduction 3 2 What is PRINCE2? 3 3 ‘PRINCE2 Business Benefit’ – A Definition 5 4 What’s all the Fuss About? The Need for Project Management 5 5 What’s in it for ‘ME’? The PRINCE2 Business Benefits 6 6 How Hard Can It Be? How to Embed PRINCE2 in Your Organization 10 7 Conclusions 12 8 References and Further Reading 13 About the author 14 Acknowledgments 14 Trade marks and statements 14 PRINCE2® Business Benefits © The Stationery Office 2010 3 1 Introduction As the pace, amount and complexity of change continues to increase, transforming operations so as to achieve a beneficial future state whilst maintaining ‘business-as-usual’ remains the crucial challenge for organizations. This challenge creates a natural tension which, in most cases, always requires more time and money to manage than anticipated. Projects provide the means by which organizations can transform their business operations. Project management, therefore, is the mechanism by which this transformation process is managed. This white paper discusses the business benefits that organizations can attain by adopting a structured, controlled, repeatable and robust project management method. The particular project management method ‘under the spotlight’ in this white paper is PRINCE2® . The content of this white paper is structured as follows. Section 2 discusses what PRINCE2 is and its place within the global project management industry, whereas Section 3 defines exactly what is termed ‘PRINCE2 Business Benefits’. Section 4 ‘makes the case’ as to why formal project management (and, indeed, a structured approach) is needed with Section 5 exploring the business benefits of adopting PRINCE2 from the perspectives of 1) the commercial sector, 2) the public sector, 3) the voluntary (or ‘third’) sector and 4) the individual. Section 6 provides some practical advice as to how organizations can adopt PRINCE2 and ‘exploit’ the business benefits of using this method, with Section 7 wrapping up the paper’s findings. Finally, Section 8 lists the referenced publications and provides recommendations for additional reading. Of course, it is recommended that this white paper is read in full but for those readers already familiar with PRINCE2, Section 2 can be skipped. Similarly, if you are already a project management advocate, Section 4 can be omitted. But keep an open mind - who knows, you may learn something new about a topic you thought you knew all about! 2 What is PRINCE2? This section does not go into a detailed treatise as to what PRINCE2 is - there is plenty of literature around to describe exactly what PRINCE2 is - and so the reader is referred to the following sources: the full PRINCE2 method consists of two volumes, the first volume, [1], is aimed at people involved in running projects and support roles, and the second volume, [2], is primarily for people who sponsor or direct projects. Of, course I am not saying that people who sponsor or direct projects are excluded from reading the first volume (and vice versa) – indeed, I advocate the very opposite; that is, all personnel involved in projects (irrespective of their roles) should be familiar with all parts of the PRINCE method. So, what is PRINCE2? PRojects IN Controlled Environments (PRINCE2) is a generic and structured project management method based on a wealth of experience drawn from thousands of projects undertaken in organizations around the world. Input into the method has come from many stakeholders (project managers, sponsors, project teams, industry leading experts, lecturers and consultants) and the final publication has gone through a rigorous review process to ensure it fully meets the needs of the project management community. PRINCE2 is a method; a framework; an umbrella under which project management can be undertaken with efficacy. PRINCE2 provides guidance on what to do (in order to run a project) and why it should be done this way, but draws the line at prescribing how to do it. PRINCE2 is about managing projects not about doing the work and this is a subtle difference that must be appreciated fully to understand and implement PRINCE2. If PRINCE2 concerned itself with doing then it would cease to be generic and lose some (or, indeed, all) of its efficacy. 4 PRINCE2® Business Benefits © The Stationery Office 2010 Figure 1: UK Office of Government Commerce ‘Best Practice’ Portfolio of Products PRINCE2 is the ‘best practice’ project management method, published (on behalf of the UK Office of Government Commerce) by TSO (The Stationery Office). PRINCE2 is part of a portfolio of ‘best practice’ guidance produced by the UK Office of Government Commerce aimed at helping organizations and individuals manage their business change initiatives, the others covering programme management (Managing Successful Programmes - MSP® [3]), risk management (Management of Risk – M_o_R® , [4]), corporate support functions (Portfolio, Programme and Project Offices – P3O® , [5]), Portfolio Management ([6]), review process (Gateway® , [7]) and service management (ITIL® , [8]). Further models to assess organizational capacity to deliver business change (maturity models) are also published by the UK Office of Government Commerce: PRINCE2® Maturity Model (P2MM, [9]) and Portfolio, Programme and Project Management Maturity Model (P3M3® , [10]). Figure 1 on the previous page is a diagram of the structure of the ‘best practice’ portfolio of products. Accompanying these guides, where appropriate, is a professional certification scheme. For PRINCE2 the qualifications are: PRINCE2 Foundation and PRINCE2 Practitioner. PRINCE2 is truly an international standard. Although originating in the UK, its appeal and, indeed, business benefit is recognised globally. There are PRINCE2 qualifications being taken in all continents and the PRINCE2 method [1] and [2], and PRINCE2 examinations have been translated into numerous languages: French, German, Danish, Polish, Italian, Spanish, Dutch and Chinese. Additional information and resources are available from the following websites [11] and [12]. The first reference, PRINCE2 Best Management Practice, is the official umbrella website providing support for all levels of adoption of PRINCE2 (and, indeed, all of the best practice products) and is dedicated to making access to the guidance quick and easy. The second URL, PRINCE2 Official Site, is another excellent website for PRINCE2 resources. PRINCE2® Business Benefits © The Stationery Office 2010 5 3 ‘PRINCE2 Business Benefit’ – A Definition As this white paper is entitled ‘PRINCE2 Business Benefits’, let’s define what we mean by the term ‘business benefit’ and, therefore, what this white paper will, subsequently, focus its attention on. According to [13], a benefit is defined as: ‘n. something that improves or promotes’, whereas [1], page 19, defines a benefit as ‘the measurable improvement resulting from an outcome that is perceived as an advantage by one or more stakeholders’. The clear message here, unsurprisingly, is that for something to be seen as a benefit it has to result in some kind of improvement. Just exactly what kind of improvement makes the ‘measurable’ part of the definition the most important parameter to consider, and this aspect will be looked at in more detail in Section 5. I have not overlooked the fact that the second definition of a benefit (i.e. from [1]) references the term ‘outcome’ and so, naturally, any benefit claimed depends on what outcome(s) the organization originally wanted to achieve. Indeed [13] defines an outcome to be ’n. something that follows from an action or situation; result; consequence.’ When it comes to what outcome(s) organizations want to achieve from adopting PRINCE2 - and that is what I am really talking about when I say ‘PRINCE2 Business Benefits’ (see definition at the end of this section) – up there somewhere near the top of the list (if not at the top) must be: ‘improved business performance’. However, ‘improved business performance’ is a generic term that means different things to different industry sectors and, therefore, requires further investigation. Section 5 covers this. Interestingly, in the definition of outcome, the term ‘consequence’ has negative connotations (as well as positive ones) and looking at it from this perspective, an outcome will still be achieved (albeit, perhaps, undesirable or not what was anticipated) as a result of any inaction or failure to exploit the action/ situation fully. The above definition of outcome also mentions the phrase ‘something that follows from an action’ implying that the manifestation of the outcome occurs after/later on from when the action or situation occurred. Thus, when our actions are completed we can only hope that they will result in the improvements that we desire (or, in the case of inaction/failure to fully exploit, any predicted undesirable consequences will not manifest). Therefore, I propose the following corollary for the phrase ‘PRINCE2 Business Benefits’: any improvements will only fully manifest if PRINCE2 is embedded within an organization. If you accept this corollary (or even if you don’t!) from this point forward the phrase ‘PRINCE2 Business Benefit’ is defined to be: ‘The measurable improvement in business performance resulting from the adoption and consistent use of PRINCE2 across all parts of an organization’. Section 6 provides some guidance on how to embed PRINCE2 within an organization. 4 What’s all the Fuss About? The Need for Project Management So far I have talked about what PRINCE2 is and what the term ‘PRINCE2 Business Benefit’ actually means, but why do we actually need project management in the first place? Isn’t project management just another term for ‘formalised common sense’? So, where did it all begin? [14], Chapter 2, pages 33 – 85, provide a fascinating insight into the origins, evolution and growth of project management. Furthermore, this same publication describes a number of project management concepts that are accepted as industry standard in today’s ‘modern project management’ world. But what of PRINCE2? Where did it stem from? For those of you who can remember PROMPT (Project Resource Organization Management Planning Technique) from the mid-1970s (or even if you can’t), one component of this was PROMPT II which was concerned with systems development. In 1983, the CCTA (Central Computer and Telecommunications Agency) – who eventually became the UK Office of Government Commerce – developed and introduced ‘Government PROMPT’ into UK Government 6 PRINCE2® Business Benefits © The Stationery Office 2010 departments. Towards the end of the 1980s – 1987 to be exact – the CCTA updated the method and renamed it PRINCE (PRojects IN Controlled Environments) which was formally launched in 1990. Subsequent developments lead to PRINCE2 being launched in 1996 with major revisions of PRINCE2 in 2005 and 2009. So now we know the history of project management and PRINCE2, but this still does not answer the question posed earlier of: is there a need for project management? Let alone a structured method. Well, yes, there is a need for project management and there is certainly a need for a structured project management process. Take a moment to think if you have ever managed a project. Whether employed as a project manager at work or not, I guarantee you have all managed projects at some point. Have you ever had a conservatory erected in your garden? Or had an extension to your house? Or bought a car or house? Or redecorated your home? Or organised an event of some sort? Sound familiar? Well, all these are projects and all have required management in order for you to realize your own ‘business benefits’. On one memorable PRINCE2 event, a delegate challenged me by asking if buying a banana (or, indeed, any piece of fruit for that matter) was a project and if I realised my business benefit. I’ll leave you to draw your own answer to this question! I am not saying you sat down and for each project you wrote a full ‘Project Initiation Document (PID)’ – the PRINCE2 term for the piece of information (see [1], page 254) ‘that defines the project, in order to form the basis for its management and assessment of its overall success’. However, I am willing to bet that you certainly knew why you were undertaking the projects, what it was you were doing, who was doing the work, when it had to be done by, how it was being done, how much it was going to cost, and I also bet that you kept an eye on it. If so, you had a PID (of sorts) and you were performing the role of a project manager. Now recall your experiences of doing any such projects. Maybe you experienced a few ‘hiccups’ along the way? Perhaps some things cropped up that you didn’t expect? Things not quite done to the standards you expected? Ended up spending more than originally intended? Or maybe I am being too cynical and everything went ‘according to plan’? Be honest with me, would you have benefited from knowing a bit more about how to manage these projects properly? Maybe a few guidelines based on other peoples’ experiences as to what to do and what not to do? I’m sure we all would! If so, you are admitting to needing some form of a process for undertaking effective project management. Now scale up to projects in your own organizations. Maybe the size of the projects are bigger, perhaps more politically important, even part of a programme, but the problems on these projects are fundamentally the same as above - formalising to project management terminology, respectively: risk/ issue management, quality management, budgeting and cost control. With all that in mind, how many of these have you experienced in your organization? In which case, are you admitting to your organization needing a process for undertaking project management? Given the discussion above, I will state that effective project management is not just formalised common sense – if it was, then could it be argued that some of the problems we have all encountered should not have occurred in the first place? It’s not a (organizational) weakness to admit we may need a little help sometimes to ensure our projects go smoothly. As the ‘PID’ discussion in previous paragraphs highlighted, the degree of management ‘rigour’ applied to projects will differ. So we must not make the mistake that ‘one size fits all’ when it comes to applying a process to managing projects. But we can confidently claim that what you need to do to manage projects is fundamentally the same – e.g. establish the business need, define the scope, manage risks, agree quality requirements, set-up effective project controls etc – you just need to decide to what extent all of this should be applied on your projects. 5 What’s in it for ‘ME’? The PRINCE2 Business Benefits And so to the title of this white paper: ‘PRINCE2 Business Benefits’. The previous section discussed what the ‘fuss’ is all about when it comes to project management and touched on the obvious business PRINCE2® Business Benefits © The Stationery Office 2010 7 benefit: ‘better delivery of projects’. In Section 3 we defined what the term PRINCE2 Business Benefit means. So, how does ‘better delivery of projects (through the consistent use of PRINCE2)’ relate to ‘measurable improvement in business performance’? A good question! And one that is multi-layered and, therefore, requires a multi-layered answer. We cannot address this question by treating all organizations the same – different organizations have different ‘drivers for change’ with projects undertaken for a whole host of different reasons. What we can do, however, is look at the problem from a number of perspectives. So, the ‘ME’ in ‘What’s in it for ME?’ refers to: ●● an organization in the commercial sector ●● an organization in the public sector, ●● and organization in the voluntary (or ‘third’) sector and ●● an individual. Whatever the organization in whatever industry sector, are we really just saying that the business benefit of PRINCE2 is being able to deliver projects on time, to cost, to quality? Is this all it really ‘boils down to’? In part, yes, but the implications of this mean different things depending on what sector you operate in. 5.1 A COMMERCIAL ORGANIZATION For commercial organizations projects represent the means by which new products are brought to market. What these new products are, how are they developed, marketed and launched all manifest through projects, and organizations that can undertake better project delivery may be able to reduce time-to-market and create a competitive advantage resulting from early (or first) introduction. What does all this mean in truth? Increased market share and increased profitability – a commercial organizations’ measurable improvement in business performance? Another way to look at this same point is if we consider corporate reputation and perception in the market place – which are integral to a commercial organizations’ success. Can corporate reputations and consumer perception be enhanced (and, therefore, maybe market share/profitability) as a result of better project delivery through consistent use of PRINCE2? Let me state my case as to why I consider the answer to be ‘yes’. Imagine that you are developing a new product and through poor project delivery (including poor quality control) the product is launched with defects. As a result, you have to recall all units from consumers. They could (and probably will) be very costly to replace, but what about the effect on your corporate reputation? How do consumers now perceive you in the market place? How do you measure any financial ‘loss of reputation’? I’m sure we can think of situations where we have seen or experienced this happening. Better project delivery may mean that these issues (or similar) will not arise in the first place, and may even result in a superior product being launched. The measurable improvement in business performance may not (initially) manifest in terms of increased market share/ profitability, more in terms of ‘protecting’ current corporate reputation/consumer perception. Invaluable in its own right! Commercial organizations are, of course, not just concerned with introducing new products to increase market share and profitability. Some projects may be to implement new/updated processes to streamline the business (i.e. reducing costs), improve quality of existing products, implementing quality initiatives within the organization (e.g. alignment of business processes to ISO standards or setting up of continuous professional development (CPD) schemes for employees) or undertaking ‘green/social responsibility’ projects (initiatives such as reducing waste, reducing carbon footprints, ethical trading etc). Better project delivery is still required to ensure the projects deliver the capability expected (whatever the context of that capability). Of course, as discussed in Section 4, projects don’t always go smoothly. Cost overruns are commonplace on lots of projects and additional budget may have to be found to fund the remainder of the project (if still deemed an organizational priority). The question is, where does this additional budget come from? It could come from contingency funds for just such events (as is very common) or from other sources – for example, private finance or some projects in the corporate portfolio closed to release resources for other uses. Either way, the remedial actions to compensate for cost overruns could mean that resources may 8 PRINCE2® Business Benefits © The Stationery Office 2010 no longer be utilised for their original purpose or less resources are physically available. This could have the further consequence of the organization (possibly) not being able to undertake its full portfolio of projects and, hence, not achieving all of its corporate/strategic goals. Depending on the nature of the organizations’ business this could be commercially damaging. Often, commercial organizations will tender for work with other organizations (typically public sector ones). Frequently respondents have to demonstrate how they will engage and manage the work, should they be successful. What is their track record in delivering similar projects of this nature? All of this relies on project management. As PRINCE2 is the ‘best practice’ project management method, organizations that have adopted and consistently used PRINCE2 (i.e. have a track record) may find themselves at an advantage in the tender process as PRINCE2 is a known quantity, is generic, has a common language that crosses industry sectors - so project personnel can engage and communicate more effectively – and is ‘tried and tested’. In short, for a lot of commissioning organizations (especially public sector ones) it may be less risk to work with a supplier organization that has a track record in successfully using PRINCE2 to run projects. 5.2 A PUBLIC SECTOR ORGANIZATION Unlike a commercial organization, public sector bodies (for example, central government, local authorities, health organizations, police etc) are not concerned with market share and profitability. So what does ‘measurable improvement in business performance’ mean for a public sector organization? Measurable improvement in business performance in this context refers (in the main) to public service transformation and/or improvement. Of course the type of ‘green/social responsibility’ initiatives and quality projects discussed above as considerations for commercial organizations have the same (if not greater) significance for public sector bodies, as projects in this sector will have a direct influence on the users of public services (i.e. us). The discussion in Section 5.1 of poor project delivery meaning resources may not be used for their original purpose, of course, holds true in the public sector. The notable difference being, however, that not achieving corporate/strategic targets may have more of a consequence for each and every one of us - as we are all users of public services of some form - public services may not get transformed or improved to the same degree as originally intended. At the very least, the PRINCE2 Business Benefits can manifest themselves in the form of meeting legislative requirements. Whilst it is not feasible to list all the legislation that adoption and consistent use of PRINCE2 could contribute to, a key piece of legislation that affected public sector organizations was the ‘Gershon Review’ ([15]) which stated “…efficiency gains of over £20 billion in 2007-08 across the public sector have been identified and agreed”. If public sector organizations achieved better project delivery through the consistent use of PRINCE2, then this would mean that (as discussed above) public sector bodies may achieve their corporate/strategic targets more effectively and efficiently – hence contributing to their ‘Gershon’ efficiency targets. Even though the timescale of the legislation has now expired, the public sector still strives for efficiency gains. When commenting on the potential loss of corporate reputation resulting from poor project delivery, this argument also applies to a public sector body. Although public sector bodies may not be measuring the financial consequences of consumer perception, local and central government in particular are very concerned with public opinions on their services. So, could the implications of poor project delivery manifest through negative opinion polls? Better project delivery (through the consistent use of PRINCE2) may (like for a commercial organization) ‘protect’ existing/current opinions (or maybe even enhance them). Through the adoption and consistent use of PRINCE2, enabling better project delivery and measurable improvement in business performance, it may be the case that a project management ‘Centre of Excellence’ is established. P3O® ([5]) was mentioned in Section 2 (and will be mentioned again in Section 6) and is, in essence, what I am referring to when I say establishing a ‘Centre of Excellence’. This will allow project (and programme and portfolio management, for that matter) to mature and embed within the organization - resulting in further improvement in business performance. PRINCE2® Business Benefits © The Stationery Office 2010 9 5.3 A VOLUNTARY (OR ‘THIRD’) SECTOR ORGANIZATION This type of organization is similar to that of a public sector one in that their primary concern is not market share or profitability. Therefore, the propositions relating to the PRINCE2 Business Benefits for the public sector are also applicable to this sector. The type of organizations I am referring to in this sector are for example, charities, humanitarian agencies and not-for-profit organizations. In the public sector discussion it was highlighted that the opportunity cost of poor project delivery can have a significant effect on the users of their services, but when relating to the voluntary sector the users are recipients of some form of aid. In which case, the opportunity cost of poor project delivery is even greater as project managers in this sector often have responsibility for life affecting and life-saving projects. As discussed in Section 2, PRINCE2 is an international standard. It is often the case (maybe more often than not) that charities and humanitarian agencies will be running projects that cross not only industry boundaries but also geographical ones. As PRINCE2 is generic, has standard terminology and is teachable and repeatable, agencies co-ordinating projects across continents will be able to increase the chances of successful project delivery through this commonality of approach. In a recent press release, [16], Eric Berg - the Chief Executive Officer of LINGOs (Learning for International Non-Government Organizations - a consortium of over forty international humanitarian relief, development, conservation and health organizations that share learning resources and experiences) - stated that a one-percent improvement in the effectiveness of twelve well known Non-Governmental Organizations would yield an additional $47 million to spend on projects each year. Eric Berg went on to say that the impact in terms of quality improvement would be even higher. Let’s just think about this for a moment. Not only is this figure of $47 million staggering in itself, but even greater effectiveness would yield even more funds for additional projects. The nature and portfolio of projects that could be undertaken with these additional funds, and the impact they could have on human lives, is humbling. So here we have, perhaps, the most direct ‘measurable improvement in business improvement’ that would result from better project delivery. Adoption and consistent use of PRINCE2 will contribute to this. 5.4 AN INDIVIDUAL How does the definition of the PRINCE2 Business Benefits (from Section 3) apply to an individual? What does ‘measurable improvement in business performance’ mean from a personal perspective? How can an individual ‘adopt and consistently use PRINCE2’? Well, the definition still holds, except that we are talking now about an individuals’ competency to run projects consistently in accordance with the PRINCE2 method. So how does an individual attain this competency? Personal experience cannot (and should not) be ignored – neither should the benefit of holding a PRINCE2 qualification. The ideal set of PRINCE2 competencies would be a product of PRINCE2 experience and a PRINCE2 professional qualification. In other words: PRINCE2 Competence = PRINCE2 Experience x PRINCE2 Qualification Holding a PRINCE2 qualification will result in recognition (from the project management industry) that an individual has achieved a level of knowledge in the subject in accordance with the certification standards. As mentioned already, PRINCE2 has been translated into numerous languages and, therefore, is truly an international standard. Let’s acknowledge and be upfront by recognizing that PRINCE2 qualifications are highly regarded by employers (for the reasons stated above) and look impressive on an individual’s CV. However, the equation above implies that holding a qualification does not automatically give an individual the right to claim PRINCE2 Competence – i.e. a ‘measurable improvement in their business performance’. PRINCE2 training is available globally through Accredited Training Organizations (ATOs) who offer a wide range of courses leading to attainment of professional certification; namely, PRINCE2 Foundation and PRINCE2 Practitioner. More information on organizations who offer accredited PRINCE2 examinations, 10 PRINCE2® Business Benefits © The Stationery Office 2010 or how to become an ATO, can be found through the APM Group – www.apmgroup.co.uk, +44 (0)1494 452450. Details of specific PRINCE2 training events can be found by contacting the individual ATOs directly. In essence, adopting and consistently using PRINCE2 to run projects is good risk management. As PRINCE2 crosses industry boundaries, all concerned know what to expect, accredited training and consultancy is available, knowledge can be shared and disseminated and extensive resources are available for people to use. All resulting (if we do it right – see Section 6) in measurable improvement in business performance – i.e. realizing their PRINCE2 Business Benefits. Having looked at each of the perspectives of 1) a commercial organization, 2) an organization in the public sector, 3) an organization in the voluntary (or ‘third’) sector and 4) an individual, one thing is common to them all: that improvement in business performance will be maximised if organizations can increase capacity and capability in PRINCE2. An often understated PRINCE2 Business Benefit is that if organizations are adopting and consistently using PRINCE2 ‘across the board’, it may be that project management is regarded within that organization as a dedicated career path (and so it should be, in my humble opinion!). The knock on effect could be that opportunities may present themselves for individuals to further their careers in project management, to increase their knowledge, to mentor new project managers, to share their knowledge and experiences, to shape project management policy (and why not programme management and more?) and even set up a P3O. All of this may, in turn, result in (additional) stability of project management resources which organizations can build upon to realize their PRINCE2 Business Benefits further. This stability will only be achieved, however, through the adoption and consistent use of PRINCE2 across an organization (i.e. embedding PRINCE2 in your organization). So, let’s turn our attention to how to do this. 6 How Hard Can It Be? How to Embed PRINCE2 in Your Organization It’s not as straightforward as you might expect. That is not meant to be a negative statement, more saying let’s go into this with our eyes open. The previous section described the business benefits that organizations could achieve through adopting PRINCE2, but these benefits will not be realized by simply implementing a project management method in isolation from the rest of the company. There is a fascinating book called Outliers: The Story of Success ([17]) by one of my favourite authors, Malcolm Gladwell, in which he makes a compelling case that individual success is not just about talent and hard work (although talent and hard work cannot be ignored), but as much about opportunity and something the author describes as ‘cultural legacy’; that is, the people we interact with and their values have a profound effect on who we are. In essence, Outliers: The Story of Success discusses that individual success is a product of talent, hard work, opportunity and ‘cultural legacy’: Success = Talent x Hard Work x Opportunity x Cultural Legacy Can this idea of success being more than just talent and hard work be extended to projects within organizations? I consider the answer to be ‘yes’ - if ‘cultural legacy’ refers to the existing maturity of an organization to embed PRINCE2. The other parameters must be considered if organizations wish to embed PRINCE2 successfully and if we interpret the above equation from an organizational perspective, what I am advocating here is a holistic approach to embedding PRINCE2. Let’s, then, explore this a bit further. There is certainly plenty of project management talent in organizations working very hard – take a good look around your staff, I’m sure you’ll be pleasantly surprised. I don’t consider these first two parameters in the equation to be a bottleneck to success. Moreover the key challenges for organizations to overcome are based around the opportunity to use PRINCE2 (and possibly refine for their own particular needs) and their ‘cultural legacy’. Fortunately, these challenges are not insurmountable as we shall now see. PRINCE2® Business Benefits © The Stationery Office 2010 11 Let’s take ‘opportunity’ first. As an experienced PRINCE2 lecturer working with numerous organizations, I have seen thousands of delegates attend events and get ‘fired up’ at the prospect of using PRINCE2 back in the workplace once the course has finished. Let’s be realistic, not all delegates who attend a PRINCE2 course are interested in using it back in the workplace – some are solely interested in gaining the PRINCE2 Foundation and PRINCE2 Practitioner qualification for personal and/or professional development reasons (and why not? Recall Section 5.4) - but a large proportion of delegates are (as well as gaining the qualifications, of course!). However, not through lack of willingness or effort, sometimes they do not get the opportunity to experience just what benefits PRINCE2 can bring. Due to a variety of reasons (for example, lack of organizational-wide buy-in, lack of willingness to change business processes to enable full implementation, lack of infrastructure to support a corporate wide method, poor understanding of what PRINCE2 is – and the list can go on) organizations may not create the environment whereby PRINCE2 can be practised and the benefits of such exploited. A crying shame as they are there to be had! Organizations must create opportunities to allow PRINCE2 to be practised and engineer the correct environment to enable success. Following this argument, a strong case can be made for a structured approach to Portfolio Management [6] defines portfolio management to be ‘a co-ordinated collection of strategic processes and decisions that together enable the most effective balance of organizational Change and Business as Usual’. An organization undertaking effective portfolio management will increase the likelihood that the right projects are being done and, hence, create the opportunities to allow PRINCE2 to be practised - since the decision making process to arrive at the selection of a particular project, surely, must include some acknowledgement of the maturity of the project management environment in which it will operate. Which brings me nicely onto the last parameter in our equation: ‘cultural legacy’? So, how does the ‘cultural legacy’ of an organization create a challenge to the successful embedding of PRINCE2 and how is the ‘culture legacy’ changed to ensure this can be achieved? An organization has to decide what outcome(s) it wants to achieve through adopting PRINCE2. As we have seen in Section 3 (and in [1], page 19), the definition of a benefit (of a project) is the ‘measurable improvement resulting from an outcome that is perceived as an advantage by one or more stakeholders’. Therefore, if the organization does not know what it wants to achieve from adopting PRINCE2, then it cannot hope to realise the full business benefits of it. This is the first step in overcoming inherent ‘cultural legacy’ – clarity on what it is they want to achieve from a project management method. Hopefully the discussion from Section 5 will help organizations decide. Organizations must recognise the need to transform their business operations to encompass PRINCE2 - after all, the adoption of PRINCE2 is a change and must be managed in the most appropriate way (using PRINCE2, of course!). The more mature organization will recognise this means to justify the end – less mature organizations may not. Could any lack of maturity in project management be down to the existing culture within the organization? Certainly. What is the existing culture of project management like in your organization? Are you doing the ‘correct’ projects as well as doing projects ‘correctly’? Is project management considered a dedicated career path? Are the skills and attributes of a good project manager recognised as professional skills in their own right? Is support, advice and guidance available from experienced project management professionals? Are projects (still) being undertaken by individuals on top of their ‘day-job’? Sound familiar? In my experience, this last comment is probably the most common ‘complaint’ from delegates on PRINCE2 events – that they can see the benefit of using PRINCE2 but they are too busy doing their ‘day job’ to give it their full attention. This is a classic case of an organization having talented and hard working individuals and providing an opportunity to use PRINCE2 (albeit limited – perhaps through not adopting portfolio management), but the inherent culture of the organization does not permit full exploitation due to the way it operates (i.e. its cultural legacy does not allow it). [1], page 215 makes a distinction between tailoring and embedding. Tailoring refers to ‘the appropriate use of PRINCE2 on any given project, ensuring that there is the correct amount of planning, control, governance and use of processes and themes’, whereas embedding is defined as ‘the adoption of PRINCE2 across and organization’. To overcome ‘cultural legacy’, organizations must look to embed PRINCE2 - not simply tailor or use it on an ad-hoc basis. As I have already advocated, the way to embed PRINCE2 is to treat the problem holistically and look at an organization as a whole greater than the sum of its parts. It will take more than a few templates and 12 PRINCE2® Business Benefits © The Stationery Office 2010 exam successes to embed PRINCE2 - sorry about that! Even if the desire to embed PRINCE2 is manifest, the means to make it happen may not be. As we have mentioned, organizations will have to change their business operations to embed PRINCE2 - to quote from [3] page 184, if I may: ‘the embedding of the new capability into the business such that it becomes ‘business-as-usual’ is where benefits realisation occurs’. This is the task at hand – put in place the capability to embed PRINCE2 and see it through so that PRINCE2 becomes the ‘norm’ for managing projects. So, what is the required capability we desire? Certainly a method, templates and knowledgeable individuals, but what else? Here a maturity model can be used to help us identify the capability gaps in the organizational processes. A ‘maturity model’ is a hierarchical approach that enables organizations to assess their current capabilities in Portfolio and/or Programme and/or Project Management to allow diagnosis of areas for improvement that will make the biggest impact on performance. The PRINCE2 Maturity Model is referenced in [9] and looks at just the organizational capacity to use PRINCE2. To ‘throw the net wider’, and consider the inherent maturity in portfolio and programme management, organizations can look to use P3M3® - Portfolio, Programme and Project Management Maturity Model (see [10]). We first met both P2MM™ and P3M3® in Figure 1 and just as only ATOs can provide training events that lead to PRINCE2 qualifications, only Accredited Consulting Organizations (ACOs) can undertake P2MM and P3M3 assessments. More information on ACOs and who offers P2MM and/or P3M3, or how to become an ACO can be found through the APM Group – www.apmgroup.co.uk, +44 (0)1494 452450. Details of specific events can be found by contacting the individual ACOs directly. For P3M3 a questionnaire is available for download (from: http://www.p3m3-officialsite.com/home/home.asp) for organizations to undertake a P3M3 assessment themselves, but it should be noted that this will, naturally, not be as effective as doing any assessment with an accredited and experienced consultant working for an ACO. As an aside, the equation in Section 5.4 on PRINCE2 competence can be modified for P2MM and P3M3 and the argument still holds. This is all well and good and maturity modelling can help identify what needs to be done. But, as stated, organizations must know what outcome they want to achieve (i.e. what level of maturity they wish to achieve) as if the capability gap is too great, and organizations wish to ‘fix’ too much too soon, embedding may not be as effective as originally anticipated. Any recommendations must also include capability for an infrastructure to ensure that PRINCE2 is supported in business-as-usual. [5] is the UK Office of Government Commerce guidance for setting up a Portfolio, Programme and Project Office (P3O). This will give PRINCE2 a ‘home’ in the organization and a P3O could take on accountability for the continual process improvement and competency development of staff in PRINCE2 and project management. The final part of ‘cultural legacy’, and perhaps the most important part, is that organizations must want to change. The business benefits of adopting PRINCE2 may look good on ‘paper’, but if there is no desire or drive from the organization to change, all the individual talent and hard work will be ‘fruitless’. Please don’t neglect the human aspects of all this – your staff are your best assets and, ultimately, they will be the ones who determine whether the business benefits of your decision to embed PRINCE2 will actually be realized. 7 Conclusions So that’s it - a detailed treatise on the PRINCE2 Business Benefits for the commercial, public and voluntary sectors, and also the individual! Except that this white paper has discussed more than the title suggests. It was necessary to contextualise the title by defining what PRINCE2 is, why there is a need for project management (and, indeed, a structured method) and what is actually meant by the term ‘business benefit’. After discussing how better project delivery through consistent use of PRINCE2 can lead to a measurable improvement in business performance, and (hopefully) ‘whetting an organizations’ appetite’ to strive to achieve such benefits, this white paper concluded by providing some practical advice as to how to embed PRINCE2 into a company – as this is what is required to be successful in this endeavour. PRINCE2® Business Benefits © The Stationery Office 2010 13 In today’s ever changing world, risk is inherent in everything we do. Who knows what the future holds? There is, however, only one thing we know to be true – the world will not be the same as it is now! Projects are the means by which organizations transform their business operations, and organizations will have to change to survive. Those that embrace this challenge will prosper - those that don’t will struggle. Given this degree of uncertainty, organizations must transform as effectively and efficiently as possible and project management is the enabler for this success. PRINCE2 is the industry standard project management method and is, therefore, a known quantity. It is generic, has a common language that crosses industry and geographical boundaries, is ‘tried and tested’, repeatable and teachable. With a wealth of experience, resources, education and consultancy available PRINCE2 is a risk management tool for organizations that wish to change/transform with efficacy. Perhaps this is the most powerful PRINCE2 Business Benefit of all. 8 References and Further Reading The following publications are referenced in the text and recommended as additional reading: [1] Managing Successful Projects with PRINCE2, Edition 5, The Stationery Office, Norwich, 2009. ISBN 978-0113310593 [2] Directing Successful Projects with PRINCE2, Edition 1, The Stationery Office, 2009. ISBN 978-0113310609 [3] Managing Successful Programmes, Edition 3, The Stationery Office, 2007. ISBN 978-0113310401 [4] Management of Risk: Guide for Practitioners, Edition 2, The Stationery Office, 2007. ISBN 978-0113310388 [5] Portfolio, Programmes and Project Offices, Edition 1, The Stationery Office, 2008. ISBN 978-0113311248 [6] Portfolio Management Guide, Final Public Consultation Draft, 2008. http://www.ogc.gov.uk/documents/PfM_Guide_OGC.pdf [7] Office of Government Commerce Gateway™ Review Process. http://www.ogc.gov.uk/what_is_ogc_gateway_review.asp [8] ITIL Publication Lifecycle Suite, Version 3, The Stationery Office, 2007. ISBN 978-0113310500 [9] PRINCE2® Maturity Model (P2MM), Version 1, 2006. http://www.ogc.gov.uk/documents/PRINCE2_ Maturity_Model_Version_1.pdf [10] Portfolio, Programme and Project Management Maturity Model (P3M3® ), Final Public Consultation Draft Version 2, 2008. http://www.p3m3-officialsite.com/home/home.asp [11] PRINCE2 Best Management Practice website, http://www.best-management-practice.com/Project- Management-PRINCE2/ [12] Official PRINCE2 website, http://www.prince-officialsite.com/home/home.asp [13] Collins Concise Dictionary (2000), Edition 4, HaperCollins Publishers Limited, Glasgow. ISBN 0 004723961 [14] Harold Kerzner (2003). Project Management: A Systems Approach to Planning, Scheduling and Controlling, Edition 8, John Wiley & Sons, Inc., New Jersey. ISBN 0 471225770 [15] Sir Peter Gershon, CBE (2004). Releasing resources to the front line. Independent Review of Public Sector Efficiency. ISBN 1 84532 032 8. © Crown copyright 2004 [16] APMG 192 – PMD Press Release, APM Group Limited, (2009) [17] Malcolm Gladwell (2008). Outliers The Story of Success, Penguin Books. ISBN 978-0141036250 14 PRINCE2® Business Benefits © The Stationery Office 2010 About the author Dr Ian Clarkson Senior Principal Lecturer Professional Best Practice QA ian.clarkson@qa.com Dr Ian Clarkson is a Senior Principal Lecturer in programme and project management within the Professional Best Practice area of QA - the UK’s leading training company. He is an experienced programme and project manager, having delivered programmes and projects in both the private and public sectors. This extensive hands-on experience coupled with a background in education has made Ian a well known and highly respected lecturer and consultant in his field. Ian has successfully undertaken accredited and non-accredited training and consultancy in all industry sectors in the UK and currently works with a team of highly experienced lecturers and consultants helping organizations excel in all aspects of programme and project management. Acknowledgments Sourced by TSO and published on www.AXELOS.com Our White Paper series should not be taken as constituting advice of any sort and no liability is accepted for any loss resulting from use of or reliance on its content. While every effort is made to ensure the accuracy and reliability of the information, TSO cannot accept responsibility for errors, omissions or inaccuracies. Content, diagrams, logos and jackets are correct at time of going to press but may be subject to change without notice. © Copyright TSO and QA Reproduction. 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No.: 85636621/0100, ID: 00216224, Tax ID: CZ00216224 PRINCE2® Foundation Course Participant Guide