ABSTRACT

This coursework is a requisite for the course Managing Systems Implementations. The
main objective of this coursework is to check the efficiency of PRINCE2 as project
management methods. In order to do that, emphasizes are given mainly on the benefits as
well as problems that may arise from implementing PRINCE2, and comparison of PRINCE2
with other project methods. Besides, some recommendation has been provided to get better
results from PRINCE2.

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TABLE OF CONTENTS PAGE NUMBER

1. INTRODUCTION 5

2. HISTORY OF PRINCE2 6

3. OVERVIEW OF THE MEHTOD 7-10

3. A. Starting up a project 7

3. B. Planning 7

3. C. Initiating a Project 8

3. D. Directing a Project 9

3. E. Controlling a Stage 9

3. F. Managing product delivery 9

3. G. Managing Stage boundaries 10

3. H. Closing a Project 10

4. BENEFITS OF PRINCE2 11-12

4. A. Benefits to project managers 11

4. A. I. Standard Structure of projects 11

4. A. II. Accurate Planning 11

4. A. II. Communication 11

4. B. Benefits to directors, executives & senior responsible owners 11

4. B. I. Implementing management by exception 11

4. B. II. Savings time and money 11

4. C. Benefits to organization 12

4. C. I. Controlled management 12

4. C. II. Involvement of managers and stakeholders 12

4. C. III. Scalability 12

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 4. C. IV. Availability 12

5. PROBLEMS WITH PRINCE2 13

5. A. Problems with “One size fits all” approach 13

5. B. Problems with Staged approach 13

5. C. Little added Value 13

5. D. Too formal and bureaucratic 13

5. E. Expensive 13

5. F. Ignoring product delivery mechanism 13

5. G. Agile Mindset 13

6. PRINCE2 VS. PMBOK 14

7. RECOMMENDATION 15-16

8. CONCLUSION 16

9. REFERENCES 17-19

10. APPENDIX 20

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1. INTRODUCTION

After the development of IT, different companies use different types of project management
methods according to their needs. A survey of CIO (2008) shows that in total around 62% of
IT project failed and 25% of IT project get cancelled before completion. In investigating the
reasons behind failure of project management, inefficient co-ordination between time and
budget, unexpected increase in maintenance cost, failure to deliver business values are
identified as common reason (Asay, 2008). “Alvarez (2003) identified seven major reasons
behind project failure. Those are lack of user involvement, organizational structure/lack of
management support, lack of clear vision, unable to manage team, unable to cope with
project size, lack of training, lack of resources. Failure in project management may cause
significant looses to the company. Large British companies are wasting more than £13m a
year each by not scrapping failing IT projects (Antony, 2004).”

A good combination of resources, skills, technology and ideas is the most important driver
behind the success of a project management method (The Office of Government Commerce,
2009). PRINCE2 method of project management proved its efficiency in combining those
skills. “In this crucial stage of IT project failure, PRINCE methods of project management
has been identified as one of the best adaptable approach for the management of almost all
project (OGC, 2002). Though it was developed for the IT project management for Central
Government in 1989, later it has been adopted by many other public and private firms which
were influenced by the statistics of the PRINCE2 method’s efficiency. PRINCE2 embodies
several years of good practices in project management.”

The main aim and objective of this coursework is to find out whether the PRINCE2 method is
the best approach of project management method.’ It would be done by comparing the
benefits and problems that may arise from implementation of PRINCE2. Besides, PRINCE2
should also be compared with some other project management methods to checks its
efficiency over them. ‘

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2. HISTORY OF PRINCE2

“PRINCE2 means PRojects IN Controlled Environment (PRINCE2, 2002). PRINCE2 is a

registered trademark of The Office of Government Commerce (OGC, 2002)”. Though,
PRINCE2 was first introduced in 1996, it had its root at 1975. OGC (2002) published the
following steps regarding the development stages of PRINCE2:

1975: Simpact Systems Ltd created a project management method known as PROMPT.

1979: ‘PROMPT was adopted by the Central Computer and Telecommunications Agency
(CCTA) as the standard to be used for all Government information system projects.’

1989: “CCTA established PRINCE based on their previous project management method
known as PROMPT. After the establishment, PRINCE effectively superseded PROMPT
within Government projects. PRINCE remains in the public domain and copyright is retained
by the Crown.”

1996: Having been contributed to by a consortium of some 150 European organisations,

PRINCE2 published.

Murray (2009) figures the following information regarding the progress of PRINCE2 during
the period of 1996 to 2008:

World-wide practitioners of PRINCE2 more than 250000

World-wide user groups of PRINCE2 more than 20
Accredited training & consulting
organisations more than 120
Software tools supporting PRINCE2 more than 50
PRINCE2 Training course languages More than 17
Number of continent used PRINCE2 7

Apart from those progresses, PRINCE2 is being used by private sectors as well as public
sectors and its’ being used for almost all types of project like construction, change,
technology (Murray, 2009).

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3. OVERVIEW OF THE MEHTOD

PRINCE2 is process driven methods of project management. The PRINCE2 process is

divided into eight processes. Those are:

Source: OCG, 2002.

3. A. Starting up a project

“Before starting any project, it is extremely important to ensure that all perquisite of initiating
the project are on place. ‘As PRINCE2 is a controlled management technique, this step of
PRINCE2 enables a controlled start of the project. The six key activities of this stages (OCG,
2002) are:

 Design and appointment of the project management team.

 Ensuring information of the project brief.

 Establish project approach

 Establish customer’s quality expectations

 Set up a risk log

 Create the initiation stage plan”

3. B. Planning

Planning is a repeatable process and plays an important role in other seven processes of
PRINCE2.’ Planning provides all personnel involved in the project with information on
requirement, how the requirement will be fulfilled, what equipment and resources would be
use to achieve those equipment and the predicting time of events happening’(OGC, 2002).

5
The key activities of Planning process are shown in the following graph:

Source: ASSIST, 2007

3. C. Initiating a Project

“This stage deals with how the required product quality will be achieved. The main
objectives of this stage are documenting and confirming an acceptable business case, to
establish plan and estimated cost of the project. The following graph represents the process
involved in initiating a project.”

Source: ASSIST, 2007

3. D. Directing a Project

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This ‘section mainly deals with the rules and regulations that will be followed by project
management team to control the overall project. The objectives of this stage are ensuring
success of the project by providing overall direction and guidance, risk management,
authorizing a stage or exception plan, giving ad-hoc direction’ etc (OCG, 2002).

3. E. Controlling a Stage

In PRINCE2, projects are broken into stages and those sub-processes dictate how each
individual stage should be controlled. The following cycle is followed to during this stage to
have efficient control to the project:

Source: ASSIST, 2007

3. F. Managing product delivery

‘The objectives of this stage is to ensure that planned products are created and delivery. Sub-
processes and key activities of this stage are shown in the following graph:’

Source: ASSIST, 2007

3. G. Managing Stage boundaries

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Managing Stage boundaries deal with the works that has to be done at the end of the
particular stage. It also deals with the actions that have to be taken if the stage goes outside of
its tolerance level. The following process is followed for managing stage boundaries:

Source: ASSIST, 2007.

3. H. Closing a Project

‘The purpose of this stage is to execute a controlled close to the project. Key activities of this
stage are decommissioning a project; identifying follow-on actions; and project evaluation
review (OGC, 2002). OGC (2002) outlined the following objectives of this process:

• Check the difference between the prediction of the projects outcome

and actual results of the projects.

• Ensure the acceptance of products by the customer and find out to what
extend the product is accepted by the customer.

• Confirm that maintenance and operation arrangements are in place

• Arranging relevant training if needed.

• Make recommendation for future works on the base of recent results.

• Prepare an end project report and archive it in project files for future
use.’

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4. BENEFITS OF PRINCE2

The Office of Government Commerce (2009) described the benefits for PRINCE2 from three
perspectives. Project managers, directors or executives of projects and the organization itself
would be benefited from PRINCE 2.

4. A. Benefits to project managers

4. A. I. Standard Structure of projects

PRINCE2 enables project managers to use a defined structure for delegation, authority and
communication. In 1998, a survey in Systems Integration Management Office (SIMO) had
done by French computer manufacturer and systems integrator shows that 75% of project
managers blame inefficient structure of their company for their failure in accomplishing
project on time (Alvarez, 2003). It represents the importance of a good structure in business.

4. A. II. Accurate Planning

Lack of good planning is one of the major causes behind the failure of project management.
In order to make the planning more accurate, PRINCE2 divide the whole projects into some
manageable stages (OGC, 2002).

4. A. II. Communication

Around 57% of the project fails because of weak communication between the relevant parties
of a project (Alvarez, 2003). In order to remove this problem, PRINCE2 established regular
reporting system within the organization and manage meeting at any vital stage of the project
(OGC, 2002).

4. B. Benefits to directors, executives and senior responsible owners

4. B. I. Implementing management by exception

PRINCE2 use management by exception for the senior management of a project (OGC,
2002). If the senior management doesn’t forecast any problem regarding the project, they
allow the project manager to get into the project (Project Management, 2005). PRINCE2
allows senior management to initiate projects confidently and delegate some of the
responsibility and authority for their management. (University of Glasgow, 2008).

4. B. II. Savings time and money

Implementation of PRINCE2 enables senior management to get frequent information about

the project status without arranging time & money consuming meeting (OGC, 2002).

9
4. C. Benefits to organization

4. C. I. Controlled management

The name PRINCE2 itself informs that it’s a project in control environment. Change control
technique of PRINCE2 ensures controlled management of a project. University of Glasgow
(2008) identifies four important conditions which have been insured by PRINCE2 in order to
maintain control management. Those are clarity of purpose, credible planning, commitment
and control. According to OGC (2002), PRINCE2 describes the following procedures to
ensure control management:

1) How to coordinate people and activities in a project.

2) How to supervise the project
3) What steps should be taken if there is variation between the actual results and
predicted results.

PRINCE2 specified each of the above process with its key inputs and outputs and with
specific goals and activities to be carried out, which gives an automatic control of any
deviations from the plan (OGC, 2002). There are eight main processes and 45 sub-processes
of PRINCE2 which ensures the controlled and organized start, middle and end part of a
project (OGC, 2005). Besides, PRINCE2 fits into ISO 9000 Quality Management System
(SIEGELAUB, 2004).

4. C. II. Involvement of managers and stakeholders

A Standish Group survey (2001) identified involvement of stakeholders as the most important
driver behind the success of the project (Alvarez, 2003). According to Cane (2006) absence
of all the stakeholders in the aims and objectives of a project is frequently quoted as a cause
of project failure. PRINCE2 provides the organization with active involvement of users and
stakeholders throughout the project to ensure that the product(s) will meet the business,
functional, environmental, service and management requirements (OGC, 2005).

4. C. III. Scalability

Every aspects of PRINCE2 may not be applicable to the every projects of an organization. To
help organization with this problems, very process of PRINCE2 has a note on scalability
which enables organization to understand up to what extent they should use PRINCE2 (APM
Group, 2008).

4. C. IV. Availability

The PRINCE2 methodology is in public domain and available of the shelf (APT, 2009).
There are more than 1.6 million pages on World Wide Web related to PRINCE2 (Murray,
2009). Besides there is an existing body of experience and PRINCE user community which

10
always available to support organization regarding any problem with PRINCE2 use (APT,
2009).

5. PROBLEMS WITH PRINCE2

Advanced Projects Techniques (2004) identified five problems of PRINCE2 for which
PRINCE2 still is not widely used in private sectors. Those problems are described below:

5. A. Problems with “One size fits all” approach

In modern globalized economy, projects are extremely diversified. It would be really

unrealistic to predict that one standardized project management method like PRINCE2 can be
used for every project. Though the scalability options of PRINCE2 reduce the problem to
certain extent, but the problem can’t be ignored completely.

5. B. Problems with Staged approach

The staged approach of PRINCE2 requires activities to perform sequentially. This approach
is best for the projects which involve Research and Development or technology development
contents as phase-gates are negotiated their step by step. But those types of project are small
percentages compare to those projects whose don’t need step by step checking. According to
Tang (2008) PRINCE2 don’t give enough focus on the softer side of project management,
particularly when it comes to the people involved in the project.

5. C. Little added Value

Some of the processes of PRINCE2 provided little added value to most of the companies.
Directing a project is a good example of those types of processes.

5. D. Too formal and bureaucratic

Implementation of PRINCE2 may create problems for the management with unnecessary
levels of formality and excessive bureaucracy. The smaller the size of a project, the higher
the formality and bureaucracy problem it would face if it implement PRINCE2.

5. E. Expensive

If an organization wants to change its existing project management method for implementing
PRINCE2 it may be disruptive and expensive. In recent credit crunch most of the companies
are trying to minimize their cost. But PRINCE2 will not be a suitable choice for those
organization who wish achieve earlier practical results at lower cost and in shorter time scale
(Dale, 2005).

Best Management Practice (2007) identifies following two limitations of PRINCE2:

5. F. Ignoring product delivery mechanism

PRINCE2 deliberately does not encompass the mechanics of product delivery.

11
5. G. Agile Mindset

It is classically built around the time, cost and quality (TQC) triangle which does not quite
line up with the agile mindset.

6. PRINCE2 VS. PMBOK

Many people assume PMBOK and PRINCE2 are competitors, but in reality PMBOK and
PRINCE2 are complementary and can be used in conjunction for effective project
management (Copland, 2007). PMBOK refers to Project Management Body of Knowledge
(Project Management Partners, 2007). PMBOK identifies and describes the subset of project
management which is accepted generally (PMP, 2007). Because of the difference in
abstraction level it’s very hard to do comparison between PRINCE2 and PMBOK. PMBOK
and PRINCE2 really serve different purposes and are therefore not directly comparable
(Vancouver, 2002).However, some competitive advantages of PRINCE2 and PMBOK can be
identified.

Jucan (2005) defines PMBOK as a guide and PRINCE2 as methodology. PMBOK is a

collection of recommendations and standards which are US standard. For business
organization, PMBOK is like a highway from where they can choose their own comfortable
way (Jucan, 2005). In a word PMBOK deals with various procedures of doing a thing,
whereas PRINCE deals with unique, clear and step by step process.

PMBOK provides information on procurement, earned value management, time management,

communication management, HR management, whereas PRINCE2 doesn’t cover those topics
(Copland, 2007). Unlike PMBOK, PRINCE2 offers several techniques and it emphasize
mainly on product based planning, change control and quality review technique (Siegelaub,
2004). While PRINCE2 is designed for a variety of customer/supplier situations PMBOK has
been written on the assumption that the project will be run for a customer with a single
(prime) supplier involved throughout (Vancouver, 2002).

Project Management Partners (2007) view PMBOK as a foundation enriched by the

PRINCE2 method. Copland (2007) seen PMBOK and PRINCE2 as complementary, but they
are not in complete and not mutually exclusive.

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7. RECOMMENDATION

Siegelaub (2004) recommend ‘using both PMBOK and PRINCE2 to get best result. After
knowing about PMBOK, it can use PRINCE2 to structure their methodology (Siegelaub,
2004). Company can use key components and techniques like product descriptions, quality
review, configuration management, change control, work packages from PRINCE2 and they
can use PMBOK for depth, techniques, plus HR and procurement as needed. There is another
project management method named as Information Technology Infrastructure Library (ITIL)
which is also marked as best practice approach to information services after it combines with
PRINCE2 project management tools (Cane, 2007).

OGC (2002), APM Group (2007), Murray (2007) and Best Management Practice (2007)
emphasizes on combination of PRINCE2 and Dynamic Systems Development Method
(DSDM) to remove the problems of PRINC2’. The organizational structure after the
combination of PRINCE2 and DSDM would be like this:

(* DSDM roles are shown in yellow)

Source: Richard (2007)

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Having a DSDM option would allow organization using PRINCE2 to have a choice in the
way they execute a project. Combination of DSDM and PRINCE2 would enable organization
to take advantage of a more agile approach to converge on an accurate solution (Richards,
2007).

OGC (2005), Murray (2007) also recommends the use of P2MM (PRINCE2 maturity model).
It can be used for the following purposes:

• ‘To help implement PRINCE2 (first time users)

• To re-invigorate/enhance existing PRINCE2 implementations
• To help organizations improve their project performance by going
beyond training and templates
• As a benchmark to assess organizational capability, plan improvements
and measure the improvements
• For organizational accreditation’

8. CONCLUSION

From the above discussion, it has been clear that PRINCE2 methods of projects management
got some problems and those problems affects more to the small private companies compare
to public and other large size private companies. However, there are huge opportunities for
PRINCE2 to grow in future. In terms of recent period, it can be conclude that PRINCE2 may
not be an efficient methodology for all companies, but for large companies and government
sector it is efficient. There are still no records found regarding huge loss in any institute
because of failure in their PRINCE2 strategy. Besides, there is a high chance that there would
be some update on current PRINCE2 so that it can be used by small private firms also.

14
9. REFERENCES

1. The Office of Government Commerce, 2005. PRINCE2[Online] OCG. Available at:

http://www.maxwideman.com/papers/prince2-05/prince2-05.pdf [Accessed 05 May
2009]

2. White, I., 2008. Introduction to PRINCE2 ?[online] Assist. Available at:

www.assist.org.uk/Branches/Trent/resources/ASSIST%20Project%20Management
%20Lecture.PPT [Accessed 03 May 2009].

3. Richards, K., 2007. Integrating DSDM into an existing PRINCE2 environment

[Online] Best Management Practice. Available at: http://www.best-management-
practice.com/gempdf/DSDM_White_Paper_v2.pdf [Accessed 05 May 2009]

4. Gantthead, 2009. Prince2 VS PM. ?[online] Gantthead. Available at:

http://www.gantthead.com/discussions/discussionsTopicContainer.cfm?ID=7280
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5. Wideman, M., 2002. Comparing PRINCE2 with PMBoK?[online] Maxwideman.

Available at: http://www.maxwideman.com/papers/comparing/comparing.pdf
[Accessed 03 May 2009].

6. Murray, A., 2009. PRINCE2™ Now and Next [online] APM Group. Available at:
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practice.com/gempdf/Andy_Murray_PRINCE2_Presentation_Sept07.ppt [Accessed
03 May 2009].

7. Copland, T., 2007. PMI’S PM BOOK VS PRINCE2 [online] PM Partners. Available

at:http://www.pmpartners.com.au/pdf/PMPartner_%20Session_
%20Handout_PMBOK_PRINCE2V2.pdf [Accessed 03 May 2009].

8. University of Glasgow. 2008. PRINCE2 Methodology. [online] University of

Glasgow. Available at:
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9. Advanced Projects Techniques. 2004. Why PRINCE2 is not widely used in the private
sector. [Online] APT. Available at: http://apt-projects.co.uk/prince2art1e.pdf
[Accessed 03 May 2009].

10. Asay, M., 2008. 62 percent of IT projects fail. Why? [Online] CNET. Available at:
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http://bryanbarrow.com/the-other-side-of-prince2.htm [Accessed 04 May 2009].

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14. Australian Institute of Project Management. 2002. A COMPARISON OF PRINCE2
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vid=12&hid=17&sid=9552f250-94e5-4fd1-b325-
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0000779e2340.html [Accessed 03 May 2009].

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24. The Art of Service, 2008. Prince2 vs. PMP: Is One better than the other?[online] The
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APPENDIX

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