PRINCE2 theme: Organization

The Organization theme is intended to help ensure a clearly defined structure for the accountability and responsibility of individuals working on a project. This includes not only the project team and the project manager, but also corporate or programme management and stakeholders.

There are three basic types of stakeholders whose interests are crucial to the success of a project: business, user, and supplier.Every project should meet a business need, which is represented within the PRINCE2 framework by the business stakeholder, who provides business justification for the project. The executive, who is also chairs the project board, is responsible for the business interests.The project products will be used to create specific outcomes, which are in turn used to generate the expected benefits of the project. On a PRINCE2 project, the stakeholder responsibility for the use, operation, and support of products is termed user, and is assigned on the project board to the role of senior user.In order to supply specialist products, a supplier is necessary, and will provide the required competencies, knowledge, and resources. On the project board the supplier interest is represented by the senior supplier role.As indicated earlier, PRINCE2 is based upon the assumption of a customer-supplier environment. As the terminology suggests, this sometimes entails a commercial relationship, where the “customer” organization means both the business and the user interests. In other cases, for example “internal” projects, the customer organization is the same organization as the supplier organization.This theme also entails the engagement with stakeholders, which are people or organizations with an interest in the outcome of the project. Stakeholders beyond the project team can have a significant impact on the way a project is run, and it is therefore crucial for the project manager to maintain an understanding of who the project stakeholders are, and how to construct a strategy for stakeholder engagement appropriate to the kind of engagement necessary at project level. PRINCE2 does not provide specific guidance for a specific stakeholder engagement procedure.There are four management “levels” identified by PRINCE2, three of which are within the project management team, and one of which sits above it.

Corporate/programme management

Corporate or programme management is the level of management that exists outside of the project, either at organizational or programme level. Ultimate responsibility for commissioning and setting project-level tolerances rests with this management level.Directing is the highest level of management within the project management team. The project board directs the project according to the project-level constraints set by corporate or programme management.As the ‘directing’ level of management, the project board is accountable for the success of the project, but is not responsible for day-to-day project management, which is delegated to the project manager. In this way, the project board performs ‘management by exception’, i.e. only involving itself in high-level decisions, including starting/closing a project, authorizing each new management stage, and committing resources to the project.

Directing

Reporting to corporate or programme management is the highest level of management within the project – known as the directing level. The directing level is represented by the project board.

Project board roles

The project board combines the three primary stakeholder interests, as defined above: executive (business interest), senior user (user interest), and senior supplier (supplier interest). The executive role is appointed by corporate or programme management. Within the Project Board, the executive is the only individual with the authority to make decisions; the senior user and senior supplier carry purely advisory functions.

Executive

The key responsibility associated with the executive is making sure that the project remains focused toward its objectives, ultimately delivering the outputs (or products) necessary for generating the outcomes that will enable the expected benefits to be realized.As well as this, the executive is responsible for assuring value for money on the project, by implementing an approach that is cost-conscious, weighing the demands of the business, user, and supplier against one another. This role is ultimately accountable for the success of the project.

Senior User

As well as being responsible for specifying the products and outcomes expected, the senior user has a responsibility for articulating and realizing the benefits expected from a project.The senior user must therefore be able to demonstrate to higher levels of management (i.e. corporate or programme management) that the project benefits (used to justify the project in the first place) are indeed being fulfilled.

Senior supplier

It is vital that those who design, build and deliver the products requested by the user should also be represented on the project board. The senior supplier role has been defined to represent these groups. It is the senior supplier’s responsibility to ensure that products are delivered in conformance with the user’s specification, and the senior supplier must therefore have the authority to commit the required supplier resources to the project.

Other project board responsibilities

Project assurance

Project assurance is a responsibility of the project board, with individual responsibilities associated with each of the three main roles.Understood as monitoring the performance and products of a project independently of the project manager, project assurance can by its very definition not be delegated (like other project board responsibilities) to the project manager, although it may be delegated to others who are independent of the project manager.To illustrate the scope of project assurance activities, here are a few examples of the kinds of things for which assurance is required:

• Appropriate management of risks
• Product specifications drawn up through consultation with appropriate individuals
• Quality inspections carried out by the right people at the right time
• Adequate training and implementation of quality methods
• The solution developed through the project is suitable
• Avoidance of scope creep
• Clear communication between stakeholders
• Recognition of appropriate standards

Change authority

Finally, the project board has the responsibility for decisions to authorize requests for changes to baseline products. This responsibility may be transferred to a change authority, especially if a high frequency of change is expected on a project. The individuals who comprise the change authority are decided by the project board during project initiation.

Managing

Managing is the middle layer of management within the project management team and is performed by the project manager.Within the tolerance levels set by the project board, the project manager has the authority to manage the project on a day-to-day basis. It is only if the project (of stage) is expected to deviate from the tolerance levels (i.e. go into exception) that the project manager should refer the matter to the project board for a decision.

Project manager

The project manager is usually part of the customer organization, and submits the required reports (e.g. the end stage reports, highlight reports) to the project board.Their specific responsibilities include ensuring that all the products required by the user are constructed according to the specified level of quality, without exceeding the budget of cost and time required. This entails assigning tasks to individuals who have the appropriate capabilities to design and create the project products.The project manager also draws up the communication management approach, which eases communication with stakeholders, by defining the methods and schedule of communication within and outside of the project, and so ensuring a controlled, mutually beneficial flow of information.

Project Support

Project managers are sometimes supported by administrative staff, secretaries, and accountants. Also known as project support, these staff are not available on all projects, and project managers often have to fulfil these functions themselves.

Delivering

According to the size, specialization, and geographical scope of the project, the project manager may also have team managers to manage the work of teams within the overall project team. These relationships are mediated through work packages, which specify the work that must be done by a team, and through checkpoint reports, which the team manager uses to report on the progress of the team’s work to the project manager.Team managers represent the lowest level of the project management team, known as the delivering level.

Summary

Excluding corporate or programme management, the levels of project management described here (directing, managing, delivering) constitute the PRINCE2 project management team structure.While high-level decisions about the project are taken by the project board, which is composed of roles representing key stakeholder interests, it is the project manager who takes responsibility for everyday project management activities. PRINCE2 refers to this as ‘management by exception’ (one of the PRINCE2 project management principles.It is important that agreed and authorized role descriptions are used to support all project management team roles, so that everybody is clear what is expected of them, and what to expect of each other.