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PRINCE2™ Revealed
This page intentionally left blank
PRINCE2™ Revealed
Second edition

Colin Bentley

AMSTERDAM • BOSTON • HEIDELBERG • LONDON • NEW YORK • OXFORD

PARIS • SAN DIEGO • SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO
Butterworth-Heinemann is an imprint of Elsevier
Butterworth-Heinemann is an imprint of Elsevier
Linacre House, Jordan Hill, Oxford OX2 8DP, UK
30 Corporate Drive, Suite 400, Burlington, MA 01803, USA
First Edition 2006
Second Edition 2010
Copyright © 2010 Colin Bentley. Published by Elsevier Ltd. All rights reserved
The right of Colin Bentley to be identified as the author of this work has been
asserted in accordance with the Copyright, Designs and Patents Act 1988
© Crown copyright material is reproduced with the permission of the Controller
of HMSO and Queen’s Printer for Scotland.
Copyright of cartoons © 2006 Elsevier Ltd. Quoted/PRINCE2 text/etc is
from Managing Successful Projects with PRINCE2 © Crown copyright 2009
Reproduced under licence from OGC.
PRINCE2™ is a Trade Mark of the office of Government Commerce.
No part of this publication may be reproduced, stored in a retrieval system or
transmitted in any form or by any means electronic, mechanical, photocopying,
recording or otherwise without the prior written permission of the publisher
Permissions may be sought directly from Elsevier’s Science & Technology Rights
Department in Oxford, UK: phone (⫹44) (0) 1865 843830; fax: (⫹44) (0) 1865
853333; email: [email protected]. Alternatively you can submit your
request online by visiting the Elsevier web site at http://elsevier.com/locate/
permissions, and selecting Obtaining permission to use Elsevier material
Notice
No responsibility is assumed by the publisher for any injury and/or damage to
persons or property as a matter of products liability, negligence or otherwise,
or from any use or operation of any methods, products, instructions or ideas
contained in the material herein.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
A catalog record for this book is available from the Library of Congress
ISBN: 978-1-85617-813-6

For information on all Butterworth-Heinemann

publications visit our website at books.elsevier.com

Printed and bound in Great Britain

10 11 10 9 8 7 6 5 4 3 2
 Contents

Preface vii

1. Introduction 1
2. An Overview of PRINCE2 7
3. Starting Up a Project (SU) 23
4. Initiating a Project (IP) 33
5. Directing a Project (DP) 43
6. Controlling a Stage (CS) 51
7. Managing Product Delivery (MP) 61
8. Managing a Stage Boundary (SB) 65
9. Closing a Project (CP) 73
10. Business Case 81
11. Organization 89
12. Plans 99
13. Progress 113
14. Quality 121
15. Risk 131
16. Change 145
17. Tailoring PRINCE2 to the Project Environment 153
Appendix A Product Descriptions 157
Appendix B PRINCE2 Foundation Exam 205
Index 291

v
This page intentionally left blank
 Preface

THE METHOD
This book presents the 2009 revision of PRINCE2, a structured
project management method based on the experience of scores of
project managers who have contributed to its development, some
from their mistakes or omissions, others from their success. It can
be applied to any kind of project, however big or small; the basic
philosophy is always the same. The method should be tailored to
suit the size, importance and environment of the project.
Those who are starting a project for the first time should not have
to reinvent the wheel. They should be able to build on the expe-
riences of previous project managers and these experiences show
us why a good project management method such as PRINCE2 is
needed if our projects are to be well managed and controlled.

vii
This page intentionally left blank
 Chapter 1

Introduction

PRINCE2™ is a Trade Mark of the Office of Government Commerce

(OGC).
This book is based on the PRINCE2 project management method.
This method is owned by the OGC, an agency of the British gov-
ernment, and has been put into the public domain by them, so
there is no fee to be paid for its use. (If you want to make money
from the method, e.g. by offering training, products or consultancy,
you need to get approval from OGC or the APM Group, contacta-
ble through [email protected]).
This book is an overview of PRINCE2 for those readers who want an
introduction to the method. It covers the whole method and aims
to provide an understandable, end-to-end overview of the basics
rather than a detailed exploration of the complexitites of PRINCE2.

1.1 WHAT IS A PROJECT?

Here are a few definitions of a project from Wikipedia. Each one
adds something unique to a common thread.
“A project is a management environment created for the purpose of
delivering one or more business products according to a specified
business case.”
“A project is a temporary structure created to achieve a specified
business benefit or objective. When the work has been completed,
the project team is disbanded.”

1
2 PRINCE2 Revealed

“A project is a finite endeavor (having specific start and comple-

tion dates) undertaken to create a unique product or service which
brings about beneficial change or added value.”

Project management is the discipline of planning, organizing and

managing resources to bring about the successful completion of
specific project goals and objectives.

1.2 BENEFITS OF THE PRINCE2 PROJECT

MANAGEMENT METHOD
Organizations are becoming increasingly aware of the opportu-
nities for adopting a ‘project’ approach to the way in which they
address the creation and delivery of new business products or
implement any change. They are also increasingly aware of the
benefits which a single, common, structured approach to project
management – as is provided through PRINCE2 – can bring.

PRINCE2 is a scalable, flexible project management method,

derived from the experience of professional project managers and
refined over years of use in a wide variety of contexts. It is owned
by a stable public authority, OGC is part of the Treasury. The OGC
has an ongoing commitment to maintaining the currency of the
method and the tools which go with it, together with the informa-
tion, books and manuals used to define the method.

● The method is repeatable.

● It is teachable.
● It builds on experience.
● It can be applied to any type or size of project.
● It insists that there should be a viable business case for a project
before it begins and continues.
● It focuses on quality throughout the project life cycle.
● It clearly identifies project responsibilities.
● Everyone knows what to expect.
● It defines a thorough but economical structure of reports.
Chapter | 1 Introduction 3

● It is based on management by exception, which gives efficient

and effective use of management time.
● It ensures good communications with all stakeholders through-
out the project.
● There is early warning of problems.
● If you take over a project in the middle, you know what docu-
ments to look for and where to find them.
● It is proactive not reactive (but has to be prepared to be reactive
to events – illness, pregnancy, accident, external events).

1.3 FINANCE
Use of this method is free. There is no purchase price and no
annual licence fee for users.

1.4 SUPPORT
● The owner of the method, the OGC, has made a commitment to
support its continuing evolution.
● The method was and is developed and enhanced by practising,
professional project managers.
● There is a strong user group (in the UK, The Netherlands,
Germany and Australia at present).
● PRINCE2 can be used for all types and sizes of projects, encour-
aging its spread throughout organizations.
● The method is supported by over 20 specialist books.
● There is increasing software tool support for the method.
● There are regular examinations for project managers and also
for project support personnel and those on the periphery of
projects, such as auditors and quality assurance personnel.
● The foundation and practitioner exam certificates, issued on
behalf of OGC, are recognized world-wide.
● Over 1 million candidates have taken the practitioner exam in
the UK so far. There are thousands more who have taken the
exams in The Netherlands, Australia and the U.S.A.
4 PRINCE2 Revealed

● A number of UK companies have included PRINCE2 certifica-

tion in their project management career path.
● Many UK project management advertisements in the national
press ask for PRINCE2 knowledge or certification.

1.5 INTERNATIONAL SPREAD

● The method and exams are recognized and used in many coun-
tries, including the UK, The Netherlands, Denmark, Scandinavia,
Poland, Hungary, Switzerland, Australia, North and South
America, South Africa, China, Hong Kong, Singapore, Italy,
Bulgaria and Indonesia.
● The method has public and private sector users.
● Books on the method are available in many other languages,
such as Dutch, German, French, Italian, Polish, Danish, Chinese
and Spanish.

1.6 QUALITY CONTROL

● In order for any firm to be able to offer training or consultancy
in the method to other organizations, the APM Group has to first
formally accredit it. This accreditation has the following three
parts:
1. The company has to show that it has the procedures and
administrative capacity to provide and support courses.
2. The training material and course timetable are checked
against the method and the syllabus.
3. Each trainer in the method must have passed both founda-
tion and practitioner examinations, and scored well in the
practitioner examination. The trainer must have a CV that
shows solid project management experience. Each trainer is
observed by the APM Group representative actually giving
one or more sessions, and is then quizzed on their under-
standing of the method in general.
● All course delegates are asked to complete a feedback form,
which is sent to the APM Group. A check is kept for any quality
Chapter | 1 Introduction 5

problems that may be voiced. If any arise, these are taken up

with the management of the training organization.
● Every trainer is subject to continuous accreditation. Where a
trainer cannot provide evidence of regular presentation experi-
ence in the method, he or she may be asked to go through the
initial accreditation process again.
● Exam setting and marking is done by the APM Group, com-
pletely independently of the training organizations.
● Representatives of the APM Group may make ad-hoc visits to
any PRINCE2 course.
● When the manual has been revised, each training organization’s
material is reviewed. Training organizations are given advanced
warning of the manual changes to allow them to time the intro-
duction of the new material with the publication of the revised
manual.

1.7 PUBLICITY
The APM Group has two well-established Web sites, http://www.
prince2.org.uk and http://www.apmgroup.co.uk.

● These contain details of all accredited training organizations and

consultants, as well as a bookshop and a list of all those who
have passed the exams. A future Web site will carry in-depth
articles on the method to encourage regular visits by users.
● Magazine articles are regularly written for UK project manage-
ment magazines.
This page intentionally left blank
 Chapter 2

An Overview of PRINCE2

2.1 PROJECT CHARACTERISTICS

The finite characteristic of projects stands in contrast to processes,
or operations, which are permanent or semi-permanent functional
work to repetitively produce the same product or service (Business
as Usual or BAU for short). In practice, the management of these
two types of work is often found to be quite different, and as such
requires the development of distinct technical skills and the adop-
tion of separate management.
There are at least five characteristics of project work that separate it
from BAU:

● Change: We use projects to introduce change to a business.

● Uncertainty: A project changes one or more things or develops
something new. These are steps into the unknown, introducing
uncertainty in what will be ahead of us in the project.
● Temporary: A team comes together for a project, does a job and
is then disbanded.
● Unique: In some major or minor ways each project is unique. It
may be completely unlike anything we have done before, or we
may have repeated the same job several times, but at a different
location or with different people.
● Cross-functional: A project needs different people with differ-
ent skills; some to define what is required, others to develop the
required products. Another problem is that they probably work

7
8 PRINCE2 Revealed

for several different line managers, maybe even different com-

panies. So managing these resources is another problem for the
Project Manager.

2.2 PROJECT PERFORMANCE ASPECTS

There are six aspects of project performance that always need to be
managed:
● Costs: Always a problem; estimating how much it will cost, then
controlling efficiency and effectiveness to ensure that this cost is
not exceeded.
● Timescales: How long will the project take? How effective will
resources be? Have you made allowances for meetings, training,
learning cycles?
● Quality: More important than getting cost and time right is get-
ting the quality right. Do you know what quality the customer
wants? Have you allowed enough time and resources to achieve
that quality?
● Scope: How precisely are the requirements known? Have you
got an agreed cut-off of finalizing requirements? Have you got
a change control procedure in place to avoid ‘scope creep’?
Does the customer understand that any changes to the specifi-
cation after you have agreed on a price and timeframe must be
paid for?
● Risk: Have we reviewed the project for risks at the outset? Are
we regularly reviewing risks? Have we a risk management pro-
cedure in place? Do we know what level of risk the customer is
willing to take?
● Benefits: Are there valid reasons for doing the project? Does the
outcome fit with company strategy? Are the claimed benefits
realistic? Do we have measurements of the situation before the
outcome is delivered in order to measure the achievement of
benefits?
PRINCE2 contains the processes and themes that will keep these
aspects under control.
Chapter | 2 An Overview of PRINCE2 9

2.3 PRINCIPLES OF PRINCE2

There are seven principles on which PRINCE2 is founded (Figure
2.1). This set of principles is unique to the PRINCE2 method.
The principles are characterized as:

● Universal: They apply to every project.

● Self-validating: They have been proved by use over many years.
● Empowering: They give users of the method the ability to shape
the management of the project.

The seven PRINCE2 principles are:

● Continued business justification;

● Learn from experience;
● Defined roles and responsibilities;
● Manage by stages;
● Manage by exception;
● Focus on products;
● Tailored to suit the project environment.

Continued business Defined roles and

justification responsibilities

Manage by Learn from

PRINCE2
stages experience

Focus on Manage by
products exception

Tailored to suit the project

environment
FIGURE 2.1 The seven PRINCE2 Principles.
10 PRINCE2 Revealed

2.3.1 Continued Business Justification

(A project should be driven by its Business Case)
PRINCE2 emphasizes that a viable Business Case should drive
a project. Its existence should be proved before the project is
given the go-ahead and it should be confirmed at all major deci-
sion points during the project. It should also be documented. (If a
product fails to deliver all the expected benefits, those who origi-
nally claimed that the benefits would be there may suffer from
amnesia.)
So,
● You should not start a project unless there is a sound Business
Case for it.
● At regular intervals in the project you should check to see that
the project is still viable.
● Stop the project if the justification has disappeared.
The Business Case:
● Is documented and approved;
● Drives the decision-making processes;
● Ensures the project remains aligned to the business objectives
and benefits being sought.

Even projects that are compulsory require justification – there may

be several options available that yield different costs, benefits and
risks.
Justification may change, but must remain valid.

2.3.2 Learn from Experience

Project management should never be ‘re-inventing the wheel’.
Those involved in the project may have previous experience; there
will be earlier projects in the company from which lessons can be
learned and there are other sources (e.g. the web, suppliers, sister
companies) of valuable lessons that can be used in the project.
Chapter | 2 An Overview of PRINCE2 11

Lessons should be sought at the beginning of a project (in the proc-

ess Starting up a Project), learned as the project progresses and
passed on to other projects after the close.

2.3.3 Defined Roles and Responsibilities

Project management is different from line management.
Projects require a temporary organization for a finite timescale for
a specific business purpose. Managing the project staff can be a
headache for a Project Manager. A project is temporary and may
include staff who report to different line managers or even work for
other organizations. A project may require a mixture of full-time
and part-time resources. So how do we have everyone know who
is responsible for what?
An explicit project management team structure is required. People
must know what their and other people’s responsibilities are. Good
communication depends on this.
The roles and responsibilities are divided into three groups, the
interests of which must be represented in any project (Figure 2.2).
These are:

● Business;
● User;
● Supplier.

PRINCE2 provides an organization structure that engages every-

one involved: the business, user and supplier stakeholder interests.

U S

FIGURE 2.2 Business, user and supplier interests.

12 PRINCE2 Revealed

Within the structure there are defined roles and responsibilities for
every member of the project management team. The chosen peo-
ple agree to a role description and sign their acceptance of that
role. (Depending on the size of the project, roles can be split or
combined.)

2.3.4 Manage by Stages

This comes from two different thoughts:

1. If the Project Board is, in PRINCE2 terms, ultimately accounta-

ble for the project and PRINCE2 does not like the idea of regular
progress meetings, there must be some key points in a project
when the Project Board needs to review progress and decide if
it wants to continue with the project.
2. Very often a project will last longer and contain more detail
than can be planned with any accuracy at the outset.

Based on these thoughts, PRINCE2 divides a project into stages.

PRINCE2 has a Project Plan, an overview of the whole project,
which is often a ‘best guess’, but the Project Manager plans only the
next stage in detail – only as much as can be accurately judged –
and the Project Board approves only one stage at a time, reviewing
the status at stage end and deciding whether to continue or not.
The number of stages depends on the size, complexity and risk
content of the project.
At the end of each stage, a plan is presented, together with an
updated view of the Business Case, the Project Plan, the risks and
suggested tolerances for the next stage. Thus senior management
can review progress so far and decide from the information pre-
sented to them whether or not to authorize the next stage.

2.3.5 Manage by Exception

PRINCE2 recognizes four levels of authority in a project. Authority
is delegated from one management level to the next. Each
Chapter | 2 An Overview of PRINCE2 13

management level is allocated tolerances within which it can con-

tinue without the need to refer to the next higher level of manage-
ment. There are six tolerance limits:

1. Time: ⫹/⫺ an amount of time on the target completion dates.

2. Cost: ⫹/⫺ amounts of planned budget.
3. Quality: ⫹/⫺ degrees off a quality target, e.g. a product that
weighs a target 10 k (with an allowed –50 g to ⫹10 g tolerance).
4. Scope: Permissible variation of the plan’s products, e.g. manda-
tory requirements ⫹/⫺ desirable requirements.
5. Risk: Limits on the plan’s exposure to threats (e.g. the risk of not
meeting the target date against the risk of overspending).
6. Benefit: ⫹/⫺ degrees off an improvement goal (e.g. 30% to 40%
staff saving).

To cut down on unnecessary meetings or problem referrals, PRINCE2

has the principle of allowing a management level to continue its
work as long as there is no forecast that a tolerance will be exceeded.
Only when there is a forecast of a tolerance being exceeded does
the next higher level of authority need to be consulted.

2.3.6 Focus on Products

A PRINCE2 project focuses on the definition and delivery of prod-
ucts, in particular their quality requirements. Planning, controls
and quality needs are all product-based.

2.3.7 Tailor to Suit the Project Environment

PRINCE2 is tailored to suit the project’s environment, size, risk,
complexity, importance and capability of the people involved.
Tailoring is considered before the project begins; roles may be split
or combined, processes and documents may be combined, it may
be agreed that some reports can be oral and some decisions made
by phone or email rather than at meetings.
14 PRINCE2 Revealed

2.4 STRUCTURE OF THE PRINCE2 METHOD

There are three parts to the structure of the method itself:

● Processes;
● Key themes;
● Techniques.

The method offers a set of processes that provide a controlled start,

a controlled progress and a controlled close to any project. The
processes explain what should happen and when it should happen.
The method has a number of themes to explain its philosophy about
various project aspects, why they are needed and how they can be
used. This philosophy is implemented through the processes.
The method offers only a few techniques. The use of most of them
is optional. You may already have a technique which is covering
that need satisfactorily. The exception is the product-based planning
technique. This is a very important part of PRINCE2. Its understand-
ing and use bring major benefits and every effort should be made
to use it.

2.5 THEMES
Figure 2.3 shows the themes positioned around the central process
model.
The themes of PRINCE2 are:

Business Case PRINCE2 emphasizes that a viable Business Case should

drive a project. Its existence should be proved before the
project is given a go-ahead and it should be confirmed at all
major decision points during the project. Claimed benefits
should be defined in measurable terms, so that they can be
checked after delivery of the product.
Chapter | 2 An Overview of PRINCE2 15

Organization The structure of a project management team. A definition

of the roles, responsibilities and relationships of all staff
involved in the project. PRINCE2 describes the roles.
According to the size and complexity of a project, these
roles can be combined or shared.
Plans PRINCE2 offers a series of plan levels that can be tailored
to the size and needs of a project, and an approach to
planning based on products rather than activities.
Progress A set of controls that facilitate the provision of key decision-
making information, allowing the organization to preempt
problems and make decisions for problem resolution. For
senior management, PRINCE2 controls are based on the
concept of ‘management by exception’, i.e. if we agree on
a plan, let the manager get on with it unless something is
forecasted to go wrong.
A project is split into stages as an approach to defining
the review and commitment points of a project in order to
promote sound management control of risk and investment.
Risk Risk is a major factor to be considered during the life of
a project. PRINCE2 defines the key moments when risks
should be reviewed, outlines an approach to the analysis
and management of risk and tracks these through all the
processes.
Quality PRINCE2 recognizes the importance of quality and
incorporates a quality approach to the management and
technical processes. It begins by establishing the customer’s
quality expectations and follows these up by laying down
standards and quality inspection methods to be used, and
checking that these are being used.
Change This contains two complementary activities: managing
changes and managing the products.
PRINCE2 emphasizes the need for change control and
this is enforced with a change control technique plus
identification of the themes that apply the change control.
Tracking the components of a final product and their
versions for release is called configuration management.
There are many methods of configuration management
available. PRINCE2 does not attempt to invent a new
one, but defines the essential facilities and information
requirements for a configuration management method
and how it should link with other PRINCE2 themes and
techniques.
16 PRINCE2 Revealed

Business
case

Change Organization

Processes

Quality Progress

Risk Plans

FIGURE 2.3 PRINCE2 themes.

2.6 THE PROCESSES

The steps of project management are described in seven processes,
which are summarized in Figure 2.4. The processes describe the
chronological flow through a project.
Any project run under PRINCE2 will need to address each of these
processes in some form. However, the key to successful use of
the process model is in tailoring it to the needs of the individual
project. Each process should be approached with the question
‘How extensively should this process be applied on this project?’
A typical flow through the processes in a project is shown in
Figure 2.5.
The ‘Directing a Project’ process has been split into its five parts to
show the points at which they are used.
Chapter | 2 An Overview of PRINCE2 17

Corporate or Programme Management

Project Project
initiation Approved Exception closure
notification PID Report notification

DP Directing a Project
project mandate

Advice Reports
End Stage Next Stage
Report Plan
Authorization

Project
Brief CS End Lessons
PID

SB Project Report
SU Controlling
Report
Starting up a Stage Managing CP
a Project
Stage Closing
IP Boundaries a Project
Initiating
a Project
Work Checkpoint Reports Follow-on action
Package Quality Register update recommendations
Completed Work Package Benefits Review Plan
Project closure
recommendation
Managing MP
Product
Delivery

FIGURE 2.4 PRINCE2 processes.

2.6.1 Directing a Project (DP)

This process is aimed at the senior management team responsible
for the project, the key decision-makers. These are usually very
busy people and should be involved in only the decision-making
process of a project. PRINCE2 helps them achieve this by adopt-
ing the principle of ‘management by exception’. The DP process
covers the activities by this senior management team (the Project
Board) throughout the project from start-up to project closure and
has five major steps:

● Authorizing the preparation of a Project Plan and Business Case

for the project;
● Approving the project go-ahead;
● Checking that the project remains justifiable at key points in the
project life cycle;
● Monitoring progress and giving advice as required;
● Ensuring that the project comes to a controlled close.
18 PRINCE2 Revealed

Starting up a
Project

Authorize
Initiation

Initiating a
Project

Authorize the
Project

Controlling a Give Ad Hoc

Stage Direction

Managing
Product Delivery

Managing a Stage
Boundary

Authorize a Stage
or Exception Plan

Closing a Project

Authorize Project
Closure

FIGURE 2.5 A typical flow through the PRINCE2 processes.

Chapter | 2 An Overview of PRINCE2 19

2.6.2 Starting Up a Project (SU)

This is intended to be a very short pre-project process with six
objectives:

● Ensure that the scope of the project is known.

● Ensure there is business justification for initiating the project.
● Design and appoint the project management team.
● Decide on the approach which will be taken within the project
to do the work.
● Agree upon the customer’s quality expectations.
● Plan the work needed to draw up the PRINCE2 ‘contract’
between the customer and the supplier.

2.6.3 Initiating a Project (IP)

This process prepares the information on whether there is sufficient
justification to proceed with the project, establishes a sound manage-
ment basis for the project and creates a detailed plan for as much of
the project as management are in a position to authorize. The mana-
gement product created is the Project Initiation Documentation,
the baseline against which project progress and success will be
measured.

2.6.4 Controlling a Stage (CS)

This process describes the monitoring and control activities of the
Project Manager involved in ensuring that a stage stays on course
and reacts to unexpected events. The process forms the core of the
Project Manager’s effort on the project, being the process that han-
dles day-to-day management of the project development activity.
Throughout a stage there will be many cycles of:

● Authorizing work to be done;

● Gathering progress information about that work;
● Monitoring and controlling changes;
● Reviewing the situation;
20 PRINCE2 Revealed

● Reporting;
● Taking any necessary corrective action.

The process covers these activities, together with the ongoing work
of risk management and change control.

2.6.5 Managing Product Delivery (MP)

The process covers:

● Making sure that work allocated to the team is authorized and

agreed upon;
● Planning the team work;
● Ensuring that the work is done;
● Ensuring that products meet the agreed quality criteria;
● Obtaining acceptance of the finished products;
● Reporting on progress and quality to the Project Manager.

The process acts as a control mechanism so that the Project Manager

and specialist teams can agree on the details of the work required.
This is particularly important when one or more teams are from third-
party suppliers not using PRINCE2. The work agreed upon between
the Project Manager and the Team Manager, including target dates,
quality and reporting requirements, is called a Work Package.

2.6.6 Managing a Stage Boundary (SB)

The objectives of this process are to:

● Plan the next stage;

● Assure the Project Board that all products of the current stage
have been completed and accepted;
● Update the Project Plan;
● Update the Business Case;
● Update the risk assessment;
● Report on the outcome and performance of the stage which has
just ended;
Chapter | 2 An Overview of PRINCE2 21

● Obtain Project Board approval to move into the next stage.

If the Project Board requests the Project Manager to produce an

Exception Plan (see ‘Controls’ for an explanation), this process also
covers the steps needed for that.

2.6.7 Closing a Project (CP)

The process covers the Project Manager’s work to request Project
Board permission to close the project either at its natural end or at a
premature close decided by the Project Board. The objectives are to:

● Note the extent to which the objectives set out at the start of the
project have been met;
● Confirm the customer’s satisfaction with the products;
● Confirm that maintenance and support arrangements are in
place (where appropriate);
● Make any recommendations for follow-on actions;
● Ensure that all lessons gathered during the project are annotated
for the benefit of future projects;
● Report on whether the project management activity itself has
been a success or not;
● Prepare a plan to check on achievement of the final product’s
claimed benefits.

Having gone through an introduction and overview of the method,

the section will now focus on the processes as the main link. This
will provide a project skeleton, a general project timeframe. Where
appropriate there will be links to the themes and techniques,
descriptions of which follow the processes.
This page intentionally left blank
 Chapter 3

Starting Up a Project (SU)

A PRINCE2 project is triggered by a project mandate, a request to

provide a solution to a business problem. Ideally it should have the
information required to form the Project Brief, but as it is created
before the project begins, there may be no control over its con-
tent. Part of the work of Starting up a Project is to fill in any gaps
(Figure 3.1).

3.0.1 What Does the Process Do?

● Receives a project mandate;
● Confirms the existence of (or completes) adequate terms of ref-
erence for the project;
● Creates a Daily Log;
● Appoints the project management team;
● Identifies the type of solution to be provided (the project
approach);
● Identifies the customer’s quality expectations;
● Enters into the Daily Log any risks already known or discovered
in the work of this process;
● Plans the initiation stage.

3.0.2 Why?
● To establish:
● What is to be done?
● Who will make the decisions?
● Who is funding the project?

23
24 PRINCE2 Revealed

INPUT OUTPUT

Appoint the Executive Executive

Project mandate
and the Project Manager Project Manager

Earlier projects' Capture

Lessons Log
Lessons Reports Previous Lessons

Project mandate Design and Appoint Job Descriptions

Executive the Project Project management
Project Manager Management Team team structure and names

Prepare the
Project
Outline Business Outline Business Case
mandate
Case

Select the Project Project Brief

Approach and Assemble
the Project Brief project approach

Project Brief Plan the Initiation

project approach Initiation Stage Stage Plan

FIGURE 3.1 Starting up a Project.

● Who will say what is needed?

● What quality standards will be required?
● Who will provide the resources to do the work?

3.1 APPOINT THE EXECUTIVE AND PROJECT MANAGER

3.1.1 Responsibility
Corporate or programme management.

3.1.2 What Does the Activity Do?

● It appoints the Executive and Project Manager, prepares and
signs their job descriptions.
Chapter | 3 Starting Up a Project (SU) 25

3.1.3 Why?
Every project needs a sponsor, the key decision-maker. But normally
this person is too busy to manage the project on a day-to-day basis.
So we also need a Project Manager to do the planning and control.
We need to identify these two people before anything can happen
(in a controlled manner) in a project.

3.1.4 How?
● Corporate or programme management identifies the Executive
to be responsible for the project.
● Either corporate/programme management or the Executive or
both identify a suitable Project Manager.
● The Project Manager starts with the standard PRINCE2 role
descriptions for the Executive and Project Manager positions.
These are then tailored by discussion between the Executive and
the Project Manager.
● The tailored roles are typed up; both people sign two copies
of their job descriptions. The individual keeps one; the other is
kept by the Project Manager for filing once the project filing sys-
tem has been set up.

3.2 CAPTURE PREVIOUS LESSONS

3.2.1 Responsibility
Project Manager.

3.2.2 What Does the Activity Do?

● Creates a Lessons Log;
● Looks for lessons from previous similar projects that might be
relevant to this project.

3.2.3 Why?
It would be foolish to ignore lessons that might help the project.
26 PRINCE2 Revealed

3.2.4 How?
● Such sources as quality assurance, programme management
and other experienced Project Managers may have lessons that
could avoid problems or provide good advice.
● Once PRINCE2 has been used for several projects, there will be
Lessons Reports from these projects that may be useful.

3.3 DESIGN AND APPOINT THE PROJECT

MANAGEMENT TEAM
3.3.1 Responsibility
Executive and Project Manager.

3.3.2 What Does the Activity Do?

● Proposes the other Project Board members;
● Discusses with the Project Board members whether they will
need help to carry out their assurance responsibilities;
● Designs any Project Assurance roles to be delegated;
● Identifies candidates for any Project Assurance roles to be
delegated;
● Identifies any required Team Managers; Team Manager names
may not be known at this point and can be added later;
● Identifies any Project Support requirements.

3.3.3 Why?
The complete project management team needs to reflect the inter-
ests and have the approval of:
● Corporate/programme management;
● The users of the final product, those who will specify details of
the required product;
● The supplier(s) of that product.

Project Board members must decide whether they want independ-

ent checks on their particular interests in the project as the project
Chapter | 3 Starting Up a Project (SU) 27

progresses (the Project Assurance part of the role) or whether they

can do this verification themselves.
The Project Manager has to decide if any administrative support is
needed, such as planning and control tool expertise, configuration
management, filing or help with specialist techniques.

3.3.4 How?
● Identify customer areas that will use or control the end product,
the commitment required and the level of authority and deci-
sion-making which is suitable for the criticality and size of the
project (Senior User).
● Identify who will provide the end product(s) and the level
of commitment and authority required from them (Senior
Supplier).
● Identify candidates for the roles.
● Check out their availability and provisional agreement.
● Check whether the Project Board members will carry out their
own Project Assurance responsibilities.
● Identify candidates for any Project Assurance functions which
are to be delegated.
● Check out their availability.
● Consider whether any Team Managers will be required.
● Decide if any Project Support will be required.
● Identify resources for any required support.
● The project management team design is presented to corporate/
programme management for approval.
● The Project Manager discusses and agrees upon each member’s
job description with them based on the role descriptions found
in Appendix B.

3.4 PREPARE THE OUTLINE BUSINESS CASE

3.4.1 Responsibility
Executive.
28 PRINCE2 Revealed

3.4.2 What Does the Activity Do?

● It begins the preparation of the Business Case from information
either found in the project mandate or requested from corporate
or programme management.
● At this point it may only be the reasons for the project that are
known. Full financial justification will be developed during
initiation.

3.4.3 Why?
PRINCE2 believes that a small amount of time and resource, rela-
tive to the likely cost of the project, should be spent in ensuring
that the expense of the project is justified.

3.4.4 How?
The Executive

● Creates the outline Business Case, based on what is currently

known about the project;
● Ensures understanding of the project reasons and objectives;
● Identifies how the project will contribute towards programme or
corporate objectives;
● Understands how the project will be funded;
● Learns from any previous lessons on business justification;
● Where necessary, obtains approval of the outline Business Case
from programme or corporate management.

The Project Manager

● Creates the Project Product Description;

● Identifies the customer’s quality expectations;
● Agrees with the customer(s) what the project’s acceptance crite-
ria are;
● Checks the feasibility of any target date or cost mentioned in the
project mandate or outline Business Case;
Chapter | 3 Starting Up a Project (SU) 29

● Captures any risks identified while obtaining this information in

the Daily Log;
● Summarizes any significant risks as part of the outline Business
Case.

3.5 SELECT THE PROJECT APPROACH AND

ASSEMBLE THE PROJECT BRIEF
3.5.1 Responsibility
Project Manager.

3.5.2 What Does the Activity Do?

● Project Brief
● Identify all stakeholders – those with an interest in the project.
Ensure their views are known on the following information.
● Confirm project objectives and desired outcomes.
● Confirm project scope (including any exclusions).
● Identify any interfaces required of the project’s products.
● Identify project tolerances from programme or corporate
management.
● Project Approach
● Identify the operational environment in which the solution
must work when delivered.
● Decide what kind of a solution (project approach) will be
provided to fit into that environment in order to achieve the
points made in the outline Business Case and the general
method of providing that solution.
● Identify the skills required to implement the project
approach.
● Identify any timing implications of the project approach.
The main Project Approaches to be considered are:

● Build a solution from scratch.

● Take an existing product and modify it.
30 PRINCE2 Revealed

● Give the job to another organization to do for you.

● Buy a ready-made solution ‘off the shelf’.

Finally, assemble the Project Brief.

3.5.3 Why?
The project approach will affect the timescale and cost of the
project, plus possibly its control over scope and quality. This infor-
mation should be made available to the Project Board in deciding
whether or not to initiate the project.
A check should be made that the proposed project approach is in
line with the customer’s (or programme) strategy.
The Project Brief is the basis for the Project Board decision on
whether or not to authorize initiation.

3.5.4 How?
● Identify any time, money, resource, operational support or later
product extension constraints.
● Check for any direction or guidance on project approach from
earlier documents such as the project mandate.
● Identify any security constraints.
● Check for any corporate/programme statement of direction
which might constrain the choice of project approaches.
● Consider how the product might be brought into use and whether
there are any problems that would impact the choice of the
project approach.
● Produce a range of alternative project approaches.
● Identify the training needs of the alternatives.
● Compare the alternatives against the gathered information and
constraints.
● Prepare a recommendation.
● Collate the Project Brief information (see above).
● Incorporate the outline Business Case.
Chapter | 3 Starting Up a Project (SU) 31

● Incorporate the Project Product Description.

● Incorporate the project approach.
● Incorporate the project management team structure and role
descriptions (or point to where these can be found).
● Record any new risks or issues in the Daily Log.

3.6 PLAN THE INITIATION STAGE

3.6.1 Responsibility
Project Manager.

3.6.2 What Does the Activity Do?

● It produces a plan for the initiation stage of the project.
● If the initiation stage is to be of a significant size, the Project
Manager should consider whether it would be sensible to use
the ‘Controlling a Stage’ and ‘Managing Product Delivery’
processes to control the work.

3.6.3 Why?
Investigating and establishing the foundation of a project and then
preparing a document to get an approval to start the project is
important work. It needs planning, and since initiation will consume
some resources, the Project Board should approve the plan.

3.6.4 How?
● Examine the Project Brief and decide how much work is needed
in order to produce the Project Initiation Documentation.
● Evaluate the time needed to create the Project Plan.
● Evaluate the time needed to create the next Stage Plan.
● Evaluate the time needed to refine the Business Case.
● Evaluate the time needed to perform risk analysis.
● Create a plan for the initiation stage.
● Submit the initiation Stage Plan for Project Board approval.
This page intentionally left blank
 Chapter 4

Initiating a Project (IP)

All activities are the responsibility of the Project Manager

(Figure 4.1). Some, such as the creation of Configuration Item
Records and the Issue Register, may be delegated to Project Support
if the project is large enough to staff this role separately.

4.0.1 What Does the Process Do?

● Defines a strategy to cover the quality responsibilities, quality
methods and tools to be used;

DP

Authority to
initiate the project

Prepare the Quality Prepare the Risk Prepare the

Management Management Configuration
Strategy Strategy Management Strategy

Prepare the
Communication
IP Management Strategy

Create the
Project Plan

Set up project Refine the

controls Business Case

Assemble the PID

Request to deliver
the project

FIGURE 4.1 Initiating a project.

33
34 PRINCE2 Revealed

● Defines a strategy for how risks will be managed;

● Defines a strategy for how products and any changes to them
will be controlled;
● Defines a strategy for communicating with all interested parties;
● Creates a high-level plan for the whole project;
● Identifies how the project is to be controlled;
● Expands and confirms the existence of a viable Business Case;
● Re-assesses the risks facing the project;
● Prepares documentation to ask the decision-makers to sign up
to the project;
● Prepares the next Stage Plan.

4.0.2 Why?
All stakeholders with interest in the project should reach an agree-
ment before major expenditure starts on what is to be done and
why it is being done.

4.1 PREPARE THE QUALITY MANAGEMENT STRATEGY

4.1.1 What Does the Activity Do?
● Takes the quality expectations of the customer, the quality stand-
ards of both customer and supplier and the project approach,
and defines how the quality expected by the customer will be
achieved.

4.1.2 Why?
To be successful, the project must deliver a quality product as well
as meet time and cost constraints. The means of achieving quality
must be specified before the work begins.
Quality work cannot be planned until the quality expectations of
the customer are known.
The time and cost of the project will be affected by the amount of
quality work that has to be done; therefore, quality planning must
be done before a realistic Project Plan can be produced.
Chapter | 4 Initiating a Project (IP) 35

4.1.3 How?
● Verify that the customer’s quality expectations are understood.
● Establish links to any corporate or programme quality assurance
function.
● Establish what the customer’s quality standards are.
● Establish what the supplier quality standards are.
● Decide if there is a need for an independent quality assurance
function to have representation on the project management
team.
● Identify quality responsibilities for project products of both the
customer and supplier in their job descriptions.
● Establish how quality will be achieved.
● Create the Quality Register.

4.2 PREPARE THE RISK MANAGEMENT STRATEGY

4.2.1 What Does the Activity Do?
● Describes the procedure to be used in handling risks;
● Identifies risk responsibilities;
● Defines any tools and techniques to be used in the management
of risk;
● Describes any risk-reporting requirements.

4.2.2 Why?
Projects bring change, and therefore the possibility of risk is always
present. Before a project begins, the method of identifying, analys-
ing and controlling risks must be established.

4.2.3 How?
● Find out if there are any corporate or programme risk strategies,
practices and standards that the project should use.
● Review the Lessons Log for any that relate to risk.
● Check if the Daily Log already has some risk entries.
36 PRINCE2 Revealed

● Create a Risk Management Strategy for the project, including:

● Procedures to cover identifying, evaluating, assessing, coun-
tering, monitoring and communicating;
● Risk tools and techniques to be used;
● Records to be kept;
● Risk tolerances;
● Responsibilities for risk activities.
● Check the Risk Management Strategy with Project Assurance to
confirm that it meets the Project Board’s needs.
● Create the Risk Register.
● Transfer any risks currently recorded in the Daily Log to the Risk
Register.

4.3 PREPARE THE CONFIGURATION MANAGEMENT

STRATEGY
4.3.1 What Does the Activity Do?
● Defines where and how project management and specialist
products will be stored, how they will be identified and how
access to them will be controlled;
● Defines how changes will be controlled.

4.3.2 Why?
A project must maintain control over the management and special-
ist products created and used. Time and money can be wasted if
people work from old copies that should have been withdrawn. A
product should be protected against unauthorized changes.
Changes are inevitable in any project, and can destroy plans, scope
of the project, quality, benefits, etc. unless carefully controlled.

4.3.3 How?
● Review any corporate or programme configuration management
standards that should be used.
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