PRINCE2 Management Stages
When running my PRINCE2 training courses a very common question is ‘how many management stages should my project have?’ My first response is to remind the delegates that there are two types of stages; technical stages and management stages.
Technical stages described what was often called phases; that is the way in which the technical work is broken down. Examples here are designed phrase, development phase, testing phase, and so on. Since projects have several specialist teams and specialist individuals involved, technical phrase work can often occur in parallel.
Management stages however are entirely different and must be managed in a different manner.
Choosing the most appropriate number of management stages, their duration, and where the end stage assessment occurs, is a factor of control within a PRINCE2 project.
It is worth reminding you that the first management stage in any PRINCE2 project is the initiation stage, which is where the project plan is created (amongst other key documentation contained within the Project Initiation Documentation – the PID).
The project plan lays down the number of management stages and their timing as mentioned above. Every PRINCE2 project has at least two management stages; the initiation stage plus one delivery stage. Most projects require several management stages for specialist product delivery.
The project board are given a plan for each next management stage and this is reviewed at each end stage assessment before proceeding to the next stage. Into this way the project manager is given authority to deliver the project one management stage at a time.
During each management stage the project will receive a regular highlight report to advise them of progress, because they are managing by exception. Tolerance is also set at each end stage assessment, so that the project board can be confident that should the project deviate beyond tolerance, that the project manager will bring this to me to lead to their attention via an exception report during the management stages.
It is clear that the number of management stages, their duration, and at the end stage assessment points set the amount of management control within a project. Since a typical stage plan contains resources and hence costs, the project board must think carefully about the application of management stages to the project.
The number of management stages within a project is clearly a balance between risk and cost as well as other factors. For example a high risk project would tend to have shorter management stages since the project board would want to review progress and the overall project status more often.
Since project board members are usually senior managers, the amount of time and effort they spend on the project needs to be kept to a minimum, still having a project with many short management stages is not a good idea.
You can clearly see that there must be many factors that influence the number of management stages within a given project, and here are some that are worth considering:
Stage cost
If, for a particular organisation, the project is seen as high cost, increasing the project down into management stages may be helpful in committing money to the project. Although the total project budget maybe agreed, the release of funds can be limited to that needed for each stage at the time each stage is authorized by the project board.
Another cost aspect is the maximum amount of money that an organization feels comfortable with when allocating each stage. If an expensive stage requires too much money, then it may be split into two stages in order to control cash flow.
There will naturally be points within the project where a significant spend is expected, for example letting a contract for project equipment or resources. It makes sense to ensure that an end stage assessment takes place prior to such a spend.
The value of this approach, is that the project board gets the opportunity to review the status of the project at the end stage assessment, and only when it make sense for a project to continue, is the next stage (with the significant expense) authorized.
Project manager and team experience in management stages
If a project manager is not very experienced, and the specialist team have not worked together before, this would suggest that the project board may need to set shorter and more regular management stages so that they can exercise a reasonable amount of control.
The shorter management stages mean that the project board will have more opportunity to review the project status at stage boundaries so that they can make better informed choices and hence reduce the risk to the project.
The reverse situation is also true; for example if a project manager is known to be experienced, then the project board may be happy for less, and longer, management stages.
Management Stages risk and complexity
As already mentioned, high risk projects need shorter management stages and more of them. It should be clear that in a typical project each stage has different characteristics depending upon what products need to be created.
The risk register is created during the initiation stage and contains all the known risks. Each risk has various data within risk register. Some of this data includes; the risk probability, the risk impact, the risk proximity (when the risk may occur), and the risk severity.
By observing which risks may occur in which of the management stages, decisions can be made about end stage assessment points and stage duration.
Turning to complexity, this by its very nature, leads to increased risk. In a similar manner to above, the project board will want to break the project down into several short management stages in order to exercise greater control within such a complex project.
Product creation points
When looking at of the project schedule (normally in the form of a Gantt Chart), it is easy to see where key products must be completed. It makes good sense to harmonise and end stage assessment at the point when a key product completed.
This ties back to cost as well, since the completion of a major product will typically represent a major spent within a stage, and for the reasons given above, it would make good sense to schedule an end stage assessment.
Another factor which influences where the boundary of management stages occur, can be driven by the need for a decision point. An example might be the placement of a contract or a key acceptance meeting.
You can see that these management stages within a project are a powerful control point for the project board.
Duration of Management Stages
Management stages are normally different in time duration the work within each stage is different; indeed, it would be very unusual if a project had stages of identical duration. If this did occur, I would suspect that the project board did not understand the purpose and application of PRINCE2 management stages.
Business points
Organizations often set departmental fiscal budgets at the start of a business fiscal year. Although this makes for good fiscal control, it can give a problem to the project funding. If the time-frame of my particulate project traverses this fiscal boundary, then it may be necessary to align an end stage assessment of one or more management stage with the end of the fiscal year.
There may be other key business points within an organization, for example a departmental audit or a major review, and these too, may need to be harmonized with an end stage boundary of management stage.
PRINCE2 defines management stages as partitions of the project with management decision points, they also equate to the commitment of resources and authority to spend. A management stage therefore is a collection of activities and products whose delivery is managed as a unit.
Every project using PRINCE2 will have a minimum of two management stages: the initiation stage where the Project Initiation Documentation is created, and at least one delivery stage, so-called, because a delivery stage is where the specialist products are created and approved.
Therefore management stages only occur one at a time; they do not overlap. There are many advantages of splitting a project into a series of management stages:
Providing at the end of the stage, an end stage assessment, to allow review and decision points for the project board to assess the project viability at regular intervals rather than letting it run on in an uncontrolled manner.
Another advantage is that stages give the ability to make key decisions prior to investing in the detailed work and cost of the following stage. Management stages also facilitate the management by exception principle by delegating authority to the project manager on a stage by stage basis.
The project board will release the project to the project manager one stage at a time, and only after considering the business case, project plan, next stage plan, and End-Stage Report. The next stage will only be authorised if there is sufficient business justification for the project to continue.
With management by Exception implemented, there is no need for “regular progress meetings”. Don’t’ get confused, the end stage assessment is fundamentally a business review (although progress information is gathered and presented).
The project manager will have the authority for day to day management and control of a stage as long as the agreed tolerances are forecast not to be exceeded. By virtue of this, the project board can manage by exception while reducing the administrative overhead of being involved while still keeping in control
When considering how many management stages within a project, there are several key questions that need to be asked to help define this number. For example, how far ahead in the project is it sensible to plan? Where do key decision points need to be?
In addition, if the project is a risky one then management stages will tend to be shorter in duration. The confidence of the project board and project manager in the project, will also determine how many stages and how long particular stages needs to be.
There is clearly a balance between many short stages with an increase in overhead, versus few long stages resulting in less control. The number of stages in a project should be chosen by asking the question “ where do the end stage assessments need to be so that project viability can be checked?”
It is important that management stages are not confused with technical stages. These are often called phases, and refer to sensible groupings of products and techniques. Technical stages of the overlap, whereas management stages do not. Technical stages are typified by the use of a particular set of specialist skills.
Whenever a technical stage spends beyond a management stage boundary, the technical stage should be broken down so that each management stage contains a whole number of specialist products.
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