In PRINCE2, a project is defined as “a temporary organization that is created for the purpose of delivering one or more business products according to an agreed Business Case.”
Organizations set up and invest in projects in order to introduce change into their day to day “business as usual” activities. For example, out of date IT systems may be replaced by more modern, up to date systems and a project will be set up to define what is required, to design and build a solution and then finally to test that the solution meets the requirements specified by the users. Once the new IT system has been shown that it meets these requirements, it is delivered to the users, and is operated and maintained on an ongoing basis by the operational and support staff.
The system will then be used by the staff performing their business as usual activities, so enabling benefits to be realized by the organization. The delivery of the new system will result in changes to the day to day business as usual activities. The improvements which result from these changes are measured in PRINCE2 in the form of benefits.
Projects can be distinguished from the everyday business as usual activities in five main ways.
Firstly, as just described, projects are the means by which changes are introduced into the business.
Secondly, a project is a temporary organization with a defined start and end date.
Thirdly, because projects often bring together people with different skills from different departments and even different organizations, the project environment is often cross-functional in nature.
Fourthly, every project is unique in what it delivers. In other words, no two projects, even IT projects are the same.
Lastly, projects have a greater level of uncertainty than business as usual activities. This is because the routine day to day business as usual activities are often performed according to well defined procedures. The same activities are often repeated on a daily basis. Over a period of years the organization has often developed well established procedures which govern how this work is conducted. Therefore the level of uncertainty of business as usual work is reduced.
On the other hand, project work often entails doing something that has never been done before by the organization, and therefore by its very nature carries a higher level of uncertainty. This uncertainty in PRINCE2 is referred to as risk. Therefore projects carry more risk than business as usual work.