IT Project Governance And PRINCE2

How can we keep major IT investments on track?

In today’s fast-changing information business world, IT project governance has emerged as one of the most vital corporate responsibilities. The relentless pressure to innovate, whilst simultaneously driving down costs, means that organisations are increasingly ‘betting the farm’ on the successful development and deployment of new IT systems. However, the business environment now evolves so quickly that the original assumptions on which projects were based can often become fatally undermined prior to the projects’ completion. With technology at the heart of most businesses, the ability to maintain tight executive and board control over such projects throughout their lifecycle has become a deciding factor in determining which businesses thrive and which founder. In response to this challenge, PRINCE2 project management has emerged as the world’s leading methodology for ensuring that IT projects (and other projects for that matter), stay on track and deliver real value.

No large scale or business critical project should ever be managed on a standalone basis. The need to involve and secure buy-in from functions right across the organisation means that a project governance approach is essential. While project management is the key discipline within this, project governance is broader in scope and has six interlinked objectives:

  1. Ensuring real business value through project and business alignment.
  2. Controlling costs through centralisation.
  3. Maximising resource allocation, particularly of high value resources.
  4. Risk management through portfolio balancing.
  5. Uniform application of best practice.
  6. Organisational coherence.

IT decisions expose an organisation to significant risks – financial, operational and competitive – so it is essential that project governance be a concern for the board as a whole, rather than any one individual. The board must insist that project risks are assessed within the organisation’s strategic planning and risk management framework and ensure that the right investment and management decisions are made, so that competitive advantage can be enhanced and measurable business value delivered.

The board’s project governance responsibilities can be summarised as follows:

  • To approve product initiation, manage the project portfolio and pull the plug on any under-performing projects.
  • To make one or more non-executive board members specifically responsible for overseeing project governance. They must have independent and informed oversight of progress on all business IT projects – including attending programme (or large project) board meetings.
  • To ensure clear accountability at all levels, with detailed, rigorously tested project plans based on a critical path analysis, with clearly identified critical success factors, regular milestones and ‘go / no-go’ checkpoints.
  • To ensure that every project proposal contains a full business case with a fully costed estimate that can stand up to independent audit, with clearly stated assumptions that can withstand rigorous analysis.
  • To manage all IT related projects as part of a portfolio.
  • To adopt and deploy a recognised project management methodology.
  • To adopt a clearly defined risk management plan at programme and project level, that reflects corporate level risk treatment requirements.
  • To institute a monitoring framework to inform the board of progress and to provide an early alert of divergence or slippage in any of the critical success factors.
  • To commit funding only on a phased basis.
  • To ensure that internal audit is capable and accountable directly to the board for providing regular, timely and unambiguous reports on project progress, slippage, budget, requirements specification and quality requirements. Where there is project divergence the board should not release further funds until the cause of the divergence has been fully dealt with.

In selecting a project management methodology the organisation needs to choose an approach that is appropriate to its project objectives and development environment. By far the most popular methodology is PRINCE2, the successor to PRINCE (‘Projects in Controlled Environments’), which was developed by the UK Government. While PRINCE was originally developed for IT projects, PRINCE2 project management has incorporated substantial feedback and is now a generic, best-practice approach for all types of projects. Since its introduction in 1989, PRINCE project management has become widely used in both the public and private sectors and is now a de facto global standard.

The current PRINCE2 project management guidance is known as PRINCE2: 2009. This uses a structured methodology, which means managing a project in a logical and organized way, following clearly defined steps and well-understood roles and responsibilities. It perfectly matches the requirements of a project governance regime by delivering the following attributes to any project:

  • A controlled and organised start, middle and end.
  • Regular reviews of progress against plan and against the business case.
  • Flexible decision points.
  • Automatic management control of any deviations from the plan.
  • The involvement of management and stakeholders at the right time and in the right place during the project.
  • Good communications channels between the project, project management, and the rest of the organisation.

The effectiveness of PRINCE2 project management in relation to project governance stems partly from its four-level approach to management:

  1. Corporate or programme management commission project work.
  2. Project Board direct the project.
  3. Project Manager manages the project on a day-to-day basis.
  4. Team Manager delivers the product or output.

PRINCE2 separates the direction and management of the project from the delivery of the products by using the principle of management by exception. It has also traditionally used four cornerstones, which define what a successfully managed project should be:

Planned: PRINCE2 has a series of processes that cover all of the activities needed on a project from starting up to closing down. This process-based approach provides an easily tailored and scaleable method for the management of all types of project. Each process is defined with its key inputs and outputs together with the specific objectives to be achieved and activities to be carried out.

Controlled: PRINCE2 project management divides a project into manageable stages, enabling efficient control of resources and regular progress monitoring throughout. The various roles and responsibilities for managing a project are fully described and are adaptable to suit the size and complexity of the project, and the skills of the organisation.

Results-driven: Project planning using PRINCE2 is product-based, which means the project plans are actually focused on delivering results and are not simply about planning when the various activities on the project will be done.

Measured: Any project using PRINCE2 is driven by the business case, which describes the organisation’s justification, commitment and rationale for the deliverables or outcome. The business case is regularly reviewed during the project to ensure the business objectives, which often change during the lifecycle of the project, are still being met.

These cornerstones are now addressed through four integrated elements: principles, themes, processes and by tailoring the project environment.

There are clear reasons why PRINCE2 project management has become the world’s leading methodology. In addition to its best practice approach for the management of all project types, there is currently a 20% year-on-year growth in the number of candidates taking PRINCE2 project management examinations; all training is carried out by accredited organisations. It is widely used and popular in both public and private sectors, and can easily be tailored to all varieties of projects in many different markets and businesses. For any organization serious about managing its IT investment, PRINCE2 project management is a natural choice.

PRINCE2: In Summary

What is PRINCE2?

PRojects IN Controlled Environments is a structured project management methodology which was originally conceived in 1989. Since being re-launched in 1996 as PRINCE2, it has gone from strength to strength, becoming the UK de-facto standard for project management. Originally branded for the management of IT projects, the second version brought PRINCE away from IT into the general project management arena.

The UK is the main user of the methodology; it was originally developed by the UK Government for use in the public sector. Since then it has been adopted by the private sector and has now spread beyond these shores and is used in more than 150 countries around the world.

In 2006, the PRINCE2 methodology was updated and is now branded as PRINCE2: 2009 (not PRINCE3), as the revision remained true to the PRINCE2 principles rather than being a complete rewrite.

PRINCE2 provides us with a project management methodology for managing projects within a clearly defined framework. This is achieved by focusing on key principles, themes and processes. It is a flexible methodology so can be adapted to project work in any arena; it can also be scaled down or scaled up to meet individual project requirements.

With organisations realising the importance of project management, it is perhaps not surprising that in the UK more and more people are taking the PRINCE2 Foundation and Practitioner exams. In fact, the number of people taking PRINCE2 qualifications increases by around 20% every year. This may be partly attributed to the fact that it is easier to adopt an existing project management methodology than to create your own, with all the cost and time that involves. It also reflects the increasing value and respect that people have for the qualification.

The good news for business is that it has never been easier for staff to learn PRINCE2 and to become certified; there are a whole host of APM Group accredited training companies providing support services.

What are BIG’s tips for studying PRINCE2?

The best way to learn PRINCE2 is by attending one of the many accredited courses being run throughout the UK. This will enable you to study, learn and network with like-minded people who share your goal of becoming recognised a professional project manager.

PRINCE2 Methodology

How should we manage projects to ensure success?

PRINCE2™ (or PRojects IN Controlled Environments) is the methodogy used extensively throughout more than 150 countries around the world, to deliver successful projects. The guidance was developed by the UK Office of Government Commerce (OGC) and is aimed at helping organizations and individuals manage their projects, programmes and services consistently, efficiently and effectively.

The methodology concentrates on a number of defined principles, themes and processes.

The PRINCE2 principles can be summarized as:

  1. Continued business justification – documented in a Business Case.
  2. Learn from experience – throughout the each project stage.
  3. Defined roles and responsibilities – split within business, user and supplier stakeholder interests.
  4. Manage by stages – allows the project status to be evaluated at the end of each stage.
  5. Manage by exception – governance defines responsibilities for directing, managing and delivering the project.
  6. Focus on products – these define the scope of the project; a successful project is output-orientated.
  7. Tailor to suit the project environment – in terms of environment, size, complexity, importance, capability and risk.

In addition to focusing on these seven principles, the project manager should also be aware of a number of themes that must be continually addressed:

  1. Business Case – outlines why the work is being done.
  2. Organization – describes who is responsible for different aspects of work within the project team.
  3. Quality – explains what is being done as part of the project delivery so all participants understand the attributes of the products to be delivered.
  4. Plans – describe how, how much and when steps need to be done in order to keep the delivery of work on schedule; they are an essential tool in the monitoring and control of project delivery.
  5. Risk – addresses the management of uncertainties and outlines scenaries relating to the ‘what if‘, before rather than after, any trouble strikes.
  6. Change – involves identifying, accessing and acting upon the occurrence of issues as they impact the project delivery.
  7. Progress – addresses the ongoing viability of the plans in terms of where we are, where we are going and accesses whether we should carry on.

As PRINCE2 is a process-based approach to project management, it includes a structured set of activities (or processes) which are designed to accomplish specific objectives throughout the stages of project delivery.

The project stages are:

  1. Pre-Project
  2. Initiation Stage
  3. Subsequent Delivery Stage(s)
  4. Final Delivery Stage

Throughout these stages, whilst focusing on directing, managing and delivering the project, the following processes are shared; responsibility for implementation being allocated between the team members:

  1. Starting up a project
  2. Initiating a project
  3. Directing a project
  4. Controlling a stage
  5. Managing a stage boundary
  6. Managing product delivery
  7. Closing a project

These are the key principles, themes and processes that make up the PRINCE2 methodology. Look out for a more advanced and in-depth analysis of project delivery or go straight to the official PRINCE2™ website at: APMG INTERNATIONAL


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