Friday, 4 March 2016

A tour of PRINCE2 Principles - Business Justification (1)

Like Snow White, the PRINCE2 Project Management methodology is built around 7 helpers :-) There are 7 guiding Principles, 7 Project Management Themes leading to 7 Processes. In a series of posts,  I want to take you through the 7 PRINCE2 Principles, my views on them aiding Project success and relate these to other posts on the Better Sheepdog site. Let me start with Principle 1 - Business Justification.

PRINCE2 Principles

Principle 1 - Business Justification

This principle, which is an excellent one in my view, is all about there being a viable Business Case under review throughout the Project life cycle.

Firstly, an outline Business Case should be used to determine whether to actually start a particular Project as most organisations are constrained by available funds and/or in-house resources and so should choose the Project(s) which provide the maximum benefits or align to the organisational Business Plan. As I stated in a post on the subject of the Business Case, Do the Right Project before Do the Project Right

At this point, I want to be clear on what constitutes a successful Project. For me, there are two dimensions. One for the Project Team to own is about Do the Project (Delivery) Right. The other one for the Project Owner is about delivery of the stated benefits of the Project. I detailed this in a post on Project success.

So in an ideal world, the Project Manager when first engaged:
  • is handed an outline Business Case
  • is told who the Owner of the Project is - I prefer to call this role the Sponsor (PRINCE2 calls it the Executive) - an example of me tailoring the method - see Principle 7 :-)
Sadly, we don't often live in an ideal world! If no Sponsor has been defined, you need to find one. Remember Shakespeare and the quote O Sponsor, Sponsor! wherefore art thou Sponsor? as per my post on the subject.

If no Business Case has been produced, this should be a focus during Project Initiation. Even if you, as PM, have been handed an outline Business Case, this should be refreshed during Initiation as the accuracy of the Project costs should be improved by the planning and estimating that takes place. The benefits side of the Business Case will need discussion and agreement by the Sponsor as, even though the PM may assist the Sponsor in production of the document and supporting models, accountability for benefits lies with the Sponsor.

The key point about this principle is that having established the Business Case and thus agreed that the Project is viable to commence, the Business Case should NOT be thrown in a cupboard never to be seen again. It should be kept under review during the Project execution to see whether:
  • the Business Case is no longer valid (so should the Project be stopped?)
  • the Business Case is enhanced or 
  • that the Business Case has stayed broadly the same
Many Business Cases can be impacted by things external to the organisation so if this is the case, someone (Sponsor?) should be keeping their eye on the external environment in which the Project will end up delivering. For example, around 2009, did someone in the Nokia organisation assess the impact of the market rise of the Smart Phone on the Business Case for the latest Nokia phone being developed?

The problem with this lofty goal is that there is usually something "more important" to do with regard to project execution than periodically review the Business Case. But PRINCE2 suggests an answer - Principle 4 recommends management by Stages and formal Gate reviews between Stages. I have seen this approach forced by a few organisations that I have worked with. In one such organisation, at least two stages had to be built into plans and firm funding was only provided for the current stage. At the Stage Gate review, the Project had to refresh and represent the Project Business Case as part of securing the funds for the next Stage. This forced the periodic focus on Business Case in line with this principle. Have a read of PRINCE2 Principle 4 post for links to related Better Sheepdog posts when it is posted in a couple of weeks.

Lastly I aim, if possible, to go one step further with regard to this principle and look to plan for creation of a product / artifact called a Benefit Realisation Plan which details far more about the benefits than is traditionally seen in a Business Case such as:
  • each low level benefit clearly articulated including levels expected over time etc?
  • who is accountable for delivery of each low level benefit?
  • how it will be measured?
  • who will undertake the measurement
  • who will police the benefit measurement - an organisational PMO is quite useful in this regard as it lives past the close-down of individual projects

Other PRINCE2 Principles

The PRINCE2 Principles are:
  1. Business Justification - this one!
  2. Learn from Experience - from previous Projects
  3. Defined Roles and Responsibilities - so there is clear understanding of who is responsible for what
  4. Manage by Stages - breaking down the Project execution into manageable chunks with gate reviews to move from one to the next
  5. Manage by Exception - once plans are in place with the owner, no news is good news
  6. Focus on Products - a focus on what is being produced rather than activities is beneficial
  7. Tailor to suit the environment - the methodology should be tailored to the environment, organisational culture, size, complexity and risks

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