# Organisational Planning & Structures ## What is an Organisation? > Definition - In a business context, an organisation is a unit of people that is structured to meet collective goals on a continued basis. A key part of every organisation is the management structure which determines roles and responsibilities and how they are delegated and controlled. ### Where do projects fit in? Directly or indirectly, projects serve strategic goals. This is because projects are a means of achieving the outcomes of strategic plans. As strategic plans are often drivers for change, often they cannot be effectively implemented by ‘normal operations management’. Therefore, to be considered successful, all projects must ultimately serve one or more of the organisation’s strategic objectives. ## Organisational Planning ### Planning and Goal Setting In order to decide which strategic goals are most important to the organisation and how they will be obtained, organisational planning is required. Planning and goal setting should occur at all levels of the organisation. The following model illustrates planning within five-level organisational hierarchy. - Level 1: Corporate Management - Level 2: Divisional Management - Level 3: Departmental Plans - Level 4: Team Management - Level 5: Individual Planning Self-Management ### Level 1: Corporate Management ![[Corporate Management.jpg]] - 5-10 year plans aligned with vision and mission - Development of strategic business directions, organisational goals and objectives Oversight of major programs - Oversight if major programs **These 3 elements are generic in that they can apply to any organisation:** - Mission – the reason for being - Vision – defines the field of endeavour for the organisation - Strategic Plan – identifies how the organisation is going to achieve the vision given the objectives defined in the mission ### Level 2: Divisional Management ![[Divisional Management.jpg]] - 3-5 year plans aligned with Strategic Plan objectives - Goals, strategies & actions, with significant budget and resource allocation - Major programs with multiple start and end dates ### Level 3: Departmental Planning ![[Departmental Planning.jpg]] - 1-3 year plans aligned with financial cycles - Goals, actions, broad resource & time constraints - Complex Projects with moderate impact - Minor programs with multiple start and end dates ### Level 4: Team Management ![[Team Management.jpg]] - 12-month plans aligned to financial year - Tasks and actions with identified resource & time constraints - Some mini-projects with defined start and end dates #### Level 5: Individual Planning (Self-Management) ![[Individual Planning (Self-Management).jpg]] - Tasks and short-term personal goals - Engaged in ongoing processes EXAMPLE: 5-Level Strategic Plan for a commercial property developer ![[5-Level Strategic Plan 1.jpg]] ![[5-Level Strategic Plan.jpg]] ## Organisational Structure Definition: The hierarchy and reporting structure in every organisation forms a framework which can be considered the organisational structure. This structure determines how roles and responsibilities are delegated and managed within the organisation and how information flows between levels of management. ### Common Organisational Structures Most organisations can be categorised into to three types of structures: - Functional (or Traditional - Matrix - Projectised ![[Matrix Organisational Structure.jpg]] `Functional or ‘Traditional’ Organisational Structure` ![[Functional or ‘Traditional’ Organisational Structure 1.jpg]] ![[Functional or ‘Traditional’ Organisational Structure.jpg]] `Matrix Organisational Structure` ![[Matrix Organisational Structure.jpg]] `Projectised Organisational Structure` ![[Projectised Organisational Structure.jpg]] # Project Management Maturity ## Maturity Levels **5-Level Example Model for an Organisation** ![[5-Level Example Model for an Organisation.jpg]] The project management processes in an organisation can be considered to align with one of five levels on a scale of maturity: ### Level 1: Common Language - Token acknowledgement of project management - Little or no executive level support - Ad-hoc interest in project management - “Do it my way” attitude to managing projects - No investment in project management training/education ### Level 2: Common Processes - Recognition of benefits of project management - Organisational support at all levels - Recognition of need for processes / methodologies - Recognition of the need for cost control - Development of a project management training curriculum ### Level 3: Integrated Methodology - Integrated processes - Cultural support - Management support at all levels - Informal project management - Return on investment for project management training dollars - Behavioral excellence ### Level 4: Continuous Improvement - Lessons learned files - Cultural support - Knowledge transfer - Formal mentoring program - Strategic planning for project management best practice ### Level 5: Benchmarking - Establishment of project office - Dedication to benchmarking - Looking at project management across industries - Benchmarking against processes, methodologies and cultures # Project Management Methodologies ### What is a Project Management Methodology? A Project Management Methodology is a prescribed sequence of interrelated phases, activities and tasks which constitutes the end-to-end process of a project. Examples - A Guide to the Project Management Body of Knowledge (PMBOK® Guide - Critical Chain Project Management (CCPM) - Event Chain Methodology - PRINCE®2 (Projects in Controlled Environments) ## PMBOK® Guide `A Guide to the Project Management Body of Knowledge` The predominant methodology used in Australia and the United States, the PMBOK® Guide provides guidelines for managing individual projects and defines project management related concepts. #### The PMBOK® Guide: - Identifies that subset of the project management body of knowledge that is generally recognised as good practice - Provides and promotes a common vocabulary within the project management profession for using applying project management concepts > `A Guide to the Project Management Body of Knowledge` The PMBOK® Guide establishes several constructs within which to manage a project, namely: - Project Lifecycle Phases - Project Process Groups - Project Management Knowledge Areas ## PRINCE2® #### Projects in Controlled Environments 2 PRINCE2® is a structured method for effective project management with the following attributes: - Focused on the business case which describes the rationale and business justification for the project - The business case drives all the project management processes from initial project set-up through to the finish of the project. Thus it is mainly there to ensure that the project has a sound basis for starting, there is sufficient governance, is planned and that there is a means of checking it has met its objectives - Focused on the management of the project rather than delivery of products\ # ORGANISATION STRUCTURES ### Corporate Structures - Projects contribute to an organisations strategic goals - Organisations have a decision making hierarchy - Strategic decisions are made by the board and or executive - Strategies for achieving corporate goals are business unit decisions made by the individual business units - A program is developed by the business unit to contribute a specific group of deliverables to meet business unit goals - A project contributes an individual deliverable as part of a program - Operations support the ongoing activities of the total organisation ### Organising for Project Management Organisations can be structured in the following ways: #### Projectised The first type was probably the pure project organisation. The project manager has total authority and all questions regarding the project are directed to him or her as the ultimate authority – the project manager makes all the decisions. In this type of organisation, the focus of the project team is clear and the project goals are in sight. There is a clear relationship with the client and communications with the client and the project team are usually good. Example – Pyramid construction. #### Traditional The traditional organisation has been the dominant form of organisation for over a hundred years. It was set up primarily based on organising people with similar skills into the same groupings. These groups of people have a manager who is similarly skilled. In the traditional organisation people become specialists in their jobs and become very good at what they do. Companies like these are not easily changed when market demands and new technologies enter their business areas. Examples – Automotive industry. Public sector #### Matrix This structure came into being in the 1970s. This was an attempt to put the best of the projectised and the traditional organisations together. In the matrix organisation, all employees report to a functional manager much like the traditional organisation. In the matrix organisation employees are organised strictly by skills. For example in a traditional organisation, all engineers could be grouped together. In a matrix organisation this does not happen. All staff with the same skill report to the same functional manager. The functional manager is responsible for staffing the project and the administrative work. The project managers direct the bulk of the work done by the employee. There is an organisation for project managers as well. The project managers are responsible for the work that is done by the individuals who do it. The project managers are not responsible for the administrative work, which must be done for the employees. This allows the project team to concentrate on the project and not be bogged down by administrative work. It allows the project team to focus on the stakeholders and the project much like a projectised organisation. There are several difficulties with this kind of organisation. There needs to be a balance between the project managers and the functional managers, otherwise one group will dominate the other. Balance can be achieved by deciding when the project team should do the work and when the work should be assigned to the functional departments. The type of organisation where there is a balance of power between functional managers and the project managers is called a balanced matrix organisation. # Strategic Project Context #### Why “Strategic” ? Projects need to be implemented as a means of achieving the outcomes of the organisation’s strategic plans. Operations and projects differ primarily in that operations are ongoing and repetitive while projects are temporary and unique. Projects need to be seen as a means to respond to the strategic objectives that cannot be addressed within the organisation’s normal operational limits. In the diagram below, hierarchical layers in the organisation develop plans at their respective levels, such that all plans are ultimately subordinate to the organisation’s strategic plan. Each plan comprises a number of objectives, which are implemented using Project Management methods. ![[Strategic Project .png]] #### Strategic Management Terms: `Mission` Overriding premise in line with the values or expectations of major stakeholders - concerned with overall purpose of the organisation, its scope and boundaries. Questions asked are: ‘What business are we in?’, and ‘What is our reason for being?’ `Vision` Defines the field of endeavour for the organisation. The question asked is: ‘Where do we want to be x years from now?’ `Goal(s)` General statement of aim or purpose in line with mission; may be qualitative. `Objective(s)` Quantification, if possible, or a more precise statement of the goal `Strategies` Fairly broad statements of intent which show the types of action required to achieve the objectives `Actions/tasks` Individual steps to implement strategies - link broad direction to specific operational issues and individuals #### A Thought on Change Management From: The Prince, by Niccolo Machiavelli (1469 – 1527) “It must be considered that there is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things. For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order, this lukewarmness arising partly from fear of their adversaries, who have the laws in their favour; and partly from the incredulity of mankind, who do not truly believe in anything new until they have actual experience of it. Thus it arises that on every opportunity for attacking the reformer, his opponents do so with the zeal of partisans; the others only defend him half-heartedly, so that between them he runs great danger. It is necessary, however, in order to investigate thoroughly this question, to examine whether these innovations are independent, or whether they depend upon others, that is to say, whether in order to carry out their designs they have to entreat or are capable to compel. In the first case they will invariably succeed ill and accomplish nothing; but when they can depend on their own strength and are able to use force, they rarely fail.“ --- # The Yin and Yang of Project Management: Comparing PMBoK and PRINCE2 (again) The US-based Project Management Institute’s Project Management Body of Knowledge (PMBoK) [1] is the most widely acknowledged assembly of the underlying principles of good project management in the world. The current third version of the PMBoK was released in 2004, and the number of people who have achieved the associated Project Management Professional (PMP) accreditation worldwide is approaching 250,000. The PMBoK presents a significant collection of project management knowledge in an accessible package. It is clearly an important element of a professional Project Manager’s toolkit. The UK-based Office of Government Commerce’s PRINCE2 method [2] is the mandated or de facto standard project management method in the UK, many parts of Europe and increasingly in Australia. The current fourth edition was released in 2005. The number of people acquiring PRINCE2 qualifications continues to increase exponentially. The take-up of PRINCE2 in the USA, India and China has begun, with significant growth rates already in each country. PRINCE2 supports organisational needs for effective governance of projects. The remaining differences between the PMBoK and PRINCE2 perhaps reflect their differing origins. The PMBoK was compiled at a time when project failure rates were much higher than today, and it may have been felt that a ‘project manager’ problem needed to be addressed. PRINCE2 arose somewhat later in a public sector environment probably having project managers with PMPs or at least knowledge of the PMBoK, but still experiencing significant project failures. Here it was felt that a ‘governance’ problem needed to be addressed. There is a distinct polarisation of views in the project management profession as to which is the true way, PMBoK or PRINCE2, as though these methods are mutually exclusive. Some organisations require their senior project managers to be PMP qualified; others mandate PRINCE2 Practitioner status. Most organisational project management methods are currently based on either the PMBoK or on PRINCE2. With the recent release of new versions of each method, there is an opportunity to compare them again, and reflect on their usefulness in the broader context in which project management occurs. ### Method of Comparison This paper compares the two methods in three ways: 1. A direct comparison of the major features of each method, where possible: - Enterprise environmental factors - Organisational process assets - Knowledge areas - Process groups - Roles and responsibilities - Key project management products 1. A comparison of the impact of each method on various stakeholders: - those governing projects - those managing projects - those working in project teams - those monitoring projects in PMOs 3. A comparison of the approaches each method takes to: - the authority of the project manager - planning - breaking the project into smaller, more manageable phases - review and update of key project management documents over the life of a project - scaling to method to suit the needs of different projects A worksheet containing the detailed side by side comparison of the two methods is available for download from www.goalgroup.com.au. ### Comparison of Features `Enterprise environmental factors` Both methods identify organisational culture, and the portfolio context in which a particular project is to be commissioned, as critical factors to be examined and understood. PMBoK identifies that knowledge of the available human resources pool and individual’s availabilities will be important. PRINCE2 considers these factors with inits process model, when the project management team is being designed, and when resources need to be assigned to specific tasks during detailed planning. `Organisational process assets` Both methods identify a range of organisational process assets that can be used by the project manager, including corporate processes and lessons learned from previous projects. PMBoK generally regards procurement and contract administration as being aspects of project management, so corporate procedures regarding these processes are highlighted here. PRINCE2 regards these activities as specialist rather than project management activities, and so doesn’t provide any guidance in these areas. In reality, most large organisations, particularly in the public sector, have standard procurement processes which would have priority over anything PMBoK may provide. So the PRINCE2 approach simply reflects its origin in the public sector. `Knowledge areas` The PMBoK provides nine ‘knowledge areas’; PRINCE2 provides eight ‘components’. These features provide the knowledge that is to be applied during all or most of each method’s process models. There are major overlaps, and several differences. Both methods recognise risk and quality as major knowledge areas. PMBoK provides more support in the area of risk, but in Australia most organisations will conform to AS4360 in any case. In PMBoK, certain quality aspects such as acceptance criteria appear in the Project Scope Statement, whereas in PRINCE2 they appear in a Project Quality Plan. Both methods recognise that scope, time, cost and quality are related, and can be traded off against each other if needed, but they approach this in different ways. These aspects are all recognised as knowledge areas by PMBoK, whereas PRINCE2 deals with scope-time-cost-quality issues as integral aspects of planning and change control. The PMBoK knowledge area on integration management deals with integration of all aspects of project management. In PRINCE2, this aspect of integration is covered somewhat by the workflow though the Start-up, Initiation and Planning processes, and by the change control technique, although it could receive greater emphasis. PMBoK has a knowledge area focussed on the human resource aspects of project management, and another knowledge area dealing with project communications. PRINCE2 has a single component called ‘Organisation and Leadership’ that addresses both these aspects, although PRINCE2’s coverage of stakeholder engagement including communications is at a very high level. PMBoK has a knowledge areas on procurement, which has no equivalent in PRINCE2. PRINCE2 recognises the Business Case as a component. In the PRINCE2 approach, the Business Case provides the primary control mechanism available to those governing the project, and is to be updated with actual costs to date and better forward estimates of future costs and benefits at the end of each management stage, just as both methods say that the Project Management Plan or PID should be similarly updated. PRINCE2 also recognises Configuration Management as a component. This may be historical; perhaps the public sector organisations that were its first clients didn’t have corporate configuration management procedures, and the PRINCE2 authors thought that they needed one. Finally, PRINCE2 has a component called Controls. These are essentially controls that those governing the project can utilise. Almost every artefact in the PRINCE2 approach can be thought of as a control, such as team reports to the project manager and project reports from the project manager to the ‘sponsor’ or program management. The novel control features of PRINCE2 include the Project Board, with defined roles and responsibilities for each of its types of member, other controls to support management by exception by the Project Board such as the concept of tolerance around budgets for schedule, cost, risk, quality and so on, and an exception process to deal with breaches of tolerance. Other control features are embedded in the PRINCE2 approach, such as the linked concepts of management stages, planning horizons and stepwise refinement of plans. `Process groups` PMBoK identifies five process groups; PRINCE2 has eight main processes. Both methods say that there may be natural phases associated with specific types of projects such as IT or building construction, and that the handoff between phases is at the discretion of the project manager. Phases may overlap. Both methods say that their processes may be invoked at lower levels of detail, say within specific phases. Both methods say that the ‘sponsor’ may need to make a management decision between certain phases. In PRINCE2, these management decisions are formally recognised, and mark the end of one ‘management stage’ and the beginning of the next. Management stages may not overlap, although specialist phases may span stage boundaries. `Key project management products` PMBoK recognises three major project management products: - the Charter - the Project Scope Statement - the Project Management Plan. In PRINCE2, the major equivalent products are: - the Project Mandate (although not a mandatory document) - the Project Brief - the Project Initiation Document, or PID but PRINCE2 recognises one more major product: The three corresponding documents appear remarkably similar in intent and content. PMBoK states that the Project Charter formally authorises the project manager to expend organisational resources, and may be developed external to the project by corporate or program management. In PRINCE2, the approved Project Brief authorises the project manager to commence planning, and the approved PID authorises the project manager to commence executing the first stage plan. The Project Mandate and Project Brief may contain outline Business Cases, which will be fleshed out as part of the PID. It is the Business Case that is the major differentiator between the methods, and it arises because of PRINCE2’s support of project governance. In PMBoK, the only reference to the Business Case is an element of the Project Charter. In PRINCE2, the Business Case, updated at the end of each management stage with actuals to date and better estimates to the end of the project, and better estimates of benefits expected, provides the Project Board with the information it requires to agree to start the project and permit the project to continue past each stage boundary. A functioning Project Board should terminate a troubled project that is unsalvageable as early as possible, to conserve organisational resources for more productive uses. ### Impact on stakeholders `Project Governance Support` The PMBoK defines a ‘sponsor’ as the person providing the project’s funding. Other roles include specification of acceptance criteria and formal acceptance of deliverables. The sponsor may specify the frequency of project review meetings. Otherwise, PMBoK appears silent in the area of governance, which reflects its historical background. For the same reason, PRINCE2 is much more prescriptive about project governance. As might be expected, since the ‘C’ in PRINCE2 stands for ‘Controlled’, the method provides a wide range of controls to those tasked with governing projects. In PRINCE2, a Project Board consists of a Project Executive representing the interests of the business funding the project, one or more Senior Suppliers representing the interests of those who will be creating the project’s specialist products, and one of more Senior Users representing the interests of those who must take the products delivered by the suppliers and deliver benefits to the organisation. The roles and responsibilities of each well specified. The Project Board’s authority derives from corporate or program management, and terminates when the Project Board agrees that the project has been completed or is no longer viable. There is only one Project Board meeting formally mandated in PRINCE2, to approve the Project Initiation Document and the first Stage Plan. Every other Project Board decision can be reached using an informal process at the discretion of the Project Board. PRINCE2 also identifies an optional Project Assurance function, to support the Project Board and provide advice independent of the project manager. In practice, a Project Board asked to make a particularly complex decision would engage one or more people through the Project Assurance function to deal with the detail and provide a brief to the Project Board. This would occur in most organisations; it’s simply formalised in the PRINCE2 method. Other controls available to the Project Board include: - the ability to provide the project manager with ad hoc advice and direction - setting of stage boundaries, which establish fire-breaks for reassessment of the project’s ongoing viability and terminate runaway projects - End Stage reviews, where progress to date and projects to the end of the project can be reviewed to ensure the ongoing viability of the project - End Project reviews, after which the Project Board may decide to close the project, if they are convinced that the project’s work has been satisfactorily completed. The project manager cannot summarily close a project - at the end of the project, any open issues and risks, outstanding activities, product defects and any other follow-on actions are passed from the project manager to relevant operational managers - setting of tolerances, giving the project manager some freedom to move around schedule or budget, while ensuring the Project Board remains in control through mandatory notification of the Project Board if a tolerance is breached - the ability to request that the Project Assurance function investigates, reviews or audits the project - the content and frequency of status reports, and whether a formal Project Board meeting is needed to review each status report. Most PRINCE2 training organisations provide training in the method itself to project managers, to whom the governance aspects may appear as a burden. Most training organisations also provide briefings on the governance aspects of the method to senior executives. The full benefit of PRINCE2 to organisations cannot be realised if their Project Board members do not act like board members. `Project Manager Support` The purpose of the PMBoK is to support project managers. The knowledge areas provide much more detail in this area than is generally provided by PRINCE2. Nevertheless, PRINCE2 provides several novel mechanisms that support the project manager, including: - the approach to step-wise refinement of plans means that a project manager does not need to create detailed plans too far into the future, with the real prospect that they will have to be rewritten closer to the time they will be needed. A Project Plan represents a high-level overview, a Stage Plan provides whatever level of detail the project manager or project board is comfortable with - the product-based planning technique, which provides a principled front-end to WBS-based planning, particularly useful in novel domains and very easily integrated into an earned-value management regime - the ‘golden thread’ supporting quality represented by the Project Quality Plan, Product Descriptions, Work Packages, the Quality Review Technique and the quality-related aspects of the issue management procedure - The Work Package concept, which essentially becomes a formal contract or tasking mechanism between the project manager and those who will be developing the specialist products identified in the Work Package, and places the onus on project team leaders to obtain client acceptance of products delivered - Project status reports, which provide a mechanism for project managers to formally escalate risks and issues to the Project Board - Team checkpoint reports, product checklists and quality logs which enable the project manager to keep project teams under control `Project Team Support` The PMBoK is silent about the needs of project team members. It’s focus is on how a project manager can manage a project team. In PRINCE2, Work Packages must be negotiated between project managers and project team leaders or the person who will be doing the work, before the work starts. The method if applied therefore prevents situations arising where teams must deliver products within unachievable timeframes or budgets. If their Work Packages are large enough, the project team may need to develop a Team Plan to increase certainty of estimates and provide role clarity. Checkpoint reports provide mechanisms for project teams to formally escalate unresolved issues to the project manager. For organisations without a formal quality review procedure, the PRINCE2 Quality Review Technique provides guidance to project team members on how to perform quality control activities, and how to document the results of such reviews. `PMO Support` Both PMBoK and PRINCE2 recognise the value of an external support function. PMBoK refers to this as a PMO, which may also be called a ‘project office’. PRINCE2 uses the term Project Office, or Project Support Office. Both methods provide a description of the role of this function in a project environment. ### Other aspects `Project Manager’s authority` In PMBoK, the Project Charter provides the project manager with authority to expend organisational resources. While PMBoK recognises that a project may be prematurely terminated, it is silent on the way in which this can formally occur. In PRINCE2, the project manager’s authority derives from the Project Executive. The project board delegates to the project manager the authority to execute a Stage Plan. This authority expires in two ways: normally and abnormally. The project manager’s authority to execute a project expires normally at a management stage boundary; this authority must be formally renewed. The project manager’s authority to continue executing the project expires abnormally whenever a project or stage breaches its allocated tolerances. In both of these cases, the project manager must convince the project board that the project remains on track, or can be brought back on track, before further work is performed. The project manager acts on behalf of the project board; the Project Board is ultimately accountable for the project’s success or failure. `Planning` PRINCE2 uses an output-based or product-based approach to planning. Planning starts by specifying the major deliverables required, then identifying other products that will have to be developed on the way. Once this process has finished, the activities required to develop those products are identified and formalised as a Work Breakdown Structure. Thereafter, the formal approach is identical to that prescribed by the PMBoK. Of course, the PMBoK provides much more detail. PRINCE2 also recognises a hierarchy of plans, providing increasing levels of details. The Project Plan will be at a high level. A Stage Plan perhaps supported by one or more Team Plans will be at whatever level of granularity is required for effective control of the stage. `Planning Horizons` In PMBoK, a WBS is created to cover the entire project. As the project progresses, the WBS will be reviewed and revised as necessary. In PRINCE2, there is a concept of a planning horizon, usually set at around three months or so, beyond which the uncertainty of the future means that the value of detailed planning decreases below the cost of developing the plan. `Phasing` The PMBoK concept of ‘phase’ and the PRINCE2 concept of ‘management stage’ are not equivalent concepts. The former relates to project management control by the project manager. The latter relates to governance control by the Project Board. Under PMBoK, a project is decomposed into phases to provide better management control of the project. A phase is not synonymous with any of the process groups. All process groups may be applied in each phase. Initiating processes are carried out at the start of subsequent phases to validate decisions made during the original Project Charter and Scope processes. A ‘phase end review’ can be held. Phases may overlap, as part of a schedule compression technique. In PRINCE2, a management stage represents a body of work large enough to be meaningful yet small enough that the Project Board remains in control. The Project Board reviews the project at the end of each stage, and makes a conscious decision to continue the project. The work within the stage may be decomposed into phases, at the discretion of the project manager, to support better management control. Progression from one phase to the next is at the discretion of the project manager, and the phases may overlap. The stage concept can then be seen as a governance control superimposed on top of what are essentially identical to the phases referred to in PMBoK. `Volatility of key project management documents` The PMBoK states that several of the Process Groups (Planning, Executing, and Monitoring and Control) may update the Project Management Plan as the project progresses. The Project Charter which includes the Business Case, may be reviewed and updated at the end of each phase. PRINCE2 states that the PID and the Business Case must be updated minimally at the end of each management stage with actual costs to date, and better estimates for future costs and benefits, and will also be updated at the end of the project with actual costs and better estimates of benefits, and will also be updated with the value of benefits realised by the time of a post-project review. Why? Because corporate or program management will hold the Project Board members accountable for delivery of the commitments outlined in the Business Case, both costs controlled and benefits realised. `Scaling up and down` Both methods state that the method should be scaled to suit the needs of the particular project. In addition, PRINCE2 offers specific advice in many areas on scaling, such as Project Board structure, staging and planning. ### Yin and Yang PMBoK identifies a number of Organisational Process Assets that may be available to the project manager, one of which is an organisational project management method (PMM). One of the facets of an organisational PMM is a specification of the controls that the organisation expects to be utilised for projects. And as the ‘C’ in PRINCE2 stands for ‘Controlled’, it begs the question: what if the organisational PMM was based on PRINCE2, and mandated such things as a Project Board with defined roles and responsibilities rather than a loosely-defined ‘sponsor’, management by exception supported by tolerances and a formal exception process rather than weekly meetings, update and review of the Business Case at the end of each phase, Product Based Planning as a front-end to the usual activity-based planning, the use of Work Packages to control the work of project team members, and the use of the PRINCE2 process model including mandatory Project Board approval before progression to the next management stage. Could a PMP-qualified Project Manager cope? Clearly, the answer is ‘very well’, given the significant overlaps we’ve already discussed. If an enterprise portfolio or program management function, such as a PMO, commissioned a project and wished to hand it off to a professional project manager to execute, part of the selection process in many organisations is a matching between the nature and demands of the proposed project and the competency and experience of the various candidates. For example, the Defence Materiel Organisation (DMO) introduced its Acquisition Category framework in 2004 to relate the characteristics of projects to the competency of project managers thought able to manage such projects. Other organisations use other means to size projects and identify suitably qualified or competent project managers. A small, low risk project might be handed to someone who’s been on a PMBoK-based course or read the PRINCE2 manual. A larger, riskier project might need someone with more tools in their kit bag, as demonstrated by their having a PMP or a PRINCE2 Practitioner qualification. An even larger, very risky project might need someone with one or both of those qualifications, as well as demonstrated competency in project management. This thought process is the basis of DMO’s Project Management Certification Framework introduced in 2006, which requires its project managers to gain formal accreditations (Certificates, Diplomas and Advanced Diplomas), which in Australia are based on the PMBoK and require proof of the candidate’s ability to apply their knowledge. And for a highly complex, extremely risky project? The DMO obviously feels that even more is required, hence the development and release of its Competency Standard for Complex Project Managers [4], which identifies further knowledge areas beyond the PMBoK. In Australia, many public sector organisations at Federal and State Government level, and the Australian branches of many European multi-nationals, utilise organisational project management methods based on PRINCE2. In their advertisements for project managers, if a requirement for formal accreditation is stated, it seems to be about equally balanced between PRINCE2 and PMBoK. Many organisations see value in both methods, and reasons to extend both. In fact, the author last year qualified for an Advanced Diploma, using as evidence a range of projects run under the PRINCE2 method but which provided proof of his competence in applying the PMBoK knowledge areas. A competent project manager should be at least aware of the PMBoK knowledge areas and be able to apply them well in a PRINCE2 management framework. ## Conclusion The differences between the PMBoK and PRINCE2 methods appear to have narrowed since the last release of each method. The differences that remain reflect the origins of each method. The PMBoK focuses on the needs of individual project managers. PRINCE2 provides a wide range of features to facilitate better organisational control of projects. There is no reason why an organisational project management method based on PRINCE2 and hence mandating a range of formal controls under which all projects must operate, could not be used as the foundation for a project run by a project manager with a PMP rigorously utilising the knowledge areas of the PMBoK. Such an approach would address the ‘project manager’ and ‘governance’ problem areas, if well implemented and enforced. Which then leads to the need to better align projects with organisational strategy, which is addressed by the emerging area of strategic program management. ### References [1] Project Management Institute, The Project Management Body of Knowledge version 3, 2004 [2] Office of Government Commerce, Managing Successful Projects with PRINCE2 release 4, 2005 [3] A spreadsheet containing the detailed comparison of PMBoK and PRINCE2, which is available for download at www.goalgroup.com.au. [4] Defence Materiel Organisation, Department of Defence, Competency Standard for Complex Project Management version 2, 2006