​PRINCE2 Projects In Context

In addition, projects may be wholly managed within the commissioning organization or be part of a commercial relationship.
Projects in the context of portfolios and programmes
 
Stand-alone projects
Projects can exist as stand-alone entities within an organization and outside the governance structures introduced by programmes or portfolios, or where an organization has been set up solely for undertaking the project

Projects within programmes

Defining a programme
A programme is a temporary, flexible organization structure created to coordinate, direct and oversee the implementation of a set of related projects and activities in order to deliver outcomes and benefits related to the organization's strategic objectives. A programme is likely to have a life that spans several years.

A project may be part of a programme, and the programme manager may commission a project to enable or deliver products or outputs that contribute to some of the programme's expected outcomes.

The project will be impacted by the programme's approach to governance, its structure and its reporting requirements.

PRINCE2 defines the term 'sponsor' as the role that is the main driving force behind a programme or project. The guidance uses the term 'commission' for the activity or authority to request the project. The organization commissioning the project will usually provide the project sponsor.

Projects within a portfolio

Defining a portfolio
The totality of an organization's investment (or a segment of it) in the changes required to achieve its strategic objectives.

Corporate organizational structures can vary from 'traditional' functional structures to project-focused corporate organizations. In the 'traditional' functional structure, staff are organized by type of work (e.g. marketing, finance and sales) and there are clear reporting lines.

In contrast, the standard practice in project-focused corporate organizations is to work with project teams.

Organizations may have corporate structures in which projects are commissioned to deliver products or outputs that contribute to the strategic objectives of the organization, and are managed within portfolios.

A portfolio may comprise programmes, projects and other work that may not necessarily be interdependent or directly related but must all contribute to achieving the strategic objectives.

Projects in a commercial environment

If the project is being run to deliver to a specific set of customer requirements, the customer may have entered a commercial relationship with a supplier following a formal tender.

The organization delivering the project (the supplier) will do so to satisfy a particular need identified by the customer.

The contract between the parties sets out how the customer and supplier will work together to deliver the project, but the rights and duties covered by the agreement may constrain how a project manager manages the project.

The customer may break the work down into one or more elements. The number of elements is that which is necessary to deliver the customer's business case. Some of those elements may then be used to procure suppliers to deliver that work, while others may form the basis of work to be delivered by the customer itself.

For a supplier, the work to be delivered may be the subject of a legally binding contract resulting from the procurement process. To deliver this work, the supplier may itself procure subcontractors by further breaking down its work into additional elements.

In a commercial environment, sometimes there may be hierarchies of commercial relationships between suppliers. Rather than a simple customer/supplier relationship involving two organizations, projects often involve multiple organizations constrained by multiple contracts.

There may be a primary commissioning organization (or one prime contractor), but there may be several customers and/or several supplier organizations, each of which may have its own business case for undertaking the project.

Examples include:

When managing projects in a commercial environment, consider that there may be multiple sets of: