What is Product Based Planning in PRINCE2?

If you are trying to use the product based planning in PRINCE2 you might end up scratching your head. Perhaps you've been told that PRINCE2 is not in the real world when it comes to product based planning -- but think again!

It is helpful to first consider where in a PRINCE2 project that product based planning is used. There are three levels of plan, and four types of plan possible within a PRINCE2 project. These are:

The Exception Plan is only ever needed, should the Project Plan or stages plans causes the project manager to forecast that Tolerance of that plan is to be exceeded. In such a case, if the project board requests for it, an Exception Plan will be created, and if approved, replace the plan that would no longer finish within tolerance.

Like a 'normal plan' the Exception Plan also uses product based planning.

For each of these situations the Product Based Planning Technique is used. In PRINCE2, all plans are documents and the planning process is used to create such a document.

The planning process consists of several activity steps. It is the activity Defining and Analyzing Products, that uses product based planning.

The Product Based Planning Technique consists of four steps:

The first activity of product based planning is called design the plan and is typically only used once the project to agree the way it will be presented and used.

For a small and simple project, product based planning may only consist of one step. If the project only has one major end product, then the diagrams are not required -- maybe only the Project Product Description is needed - but this would be an extreme example...

For slightly more complex projects, there may only be a handful of products, and the two diagrams can be sketched out in a matter of minutes. However, this will still mean that product descriptions will need to be created for significant products, and hence product based planning is still used.

The guideline here is that " does the creation of a product description add any value". The key question to ask here is "would determining the product quality criteria be helpful?"

But the way that product based planning is applied to a particular project may not simply be all or nothing. For example, if the resources for the initiation stage plan are obvious and straightforward, then a simple statement of the time frame and those resources may be sufficient.

During the initiation stage, the project plan is created, and uses of course, the product based planning technique. Because of the high-level nature of the Project Plan, not all products may be known at this time, or, for those that are known, not all of the details can be determined at this point in time.

This suggests that when using product based planning on a particular stage at some point in the future for a given project, existing and incomplete product descriptions can now have the extra information added, along with the creation of new product descriptions, known for the first time at this point (which are part of the product based planning technique).

Let us now discuss how the product based planning technique may be used in the real world.

As with most planning, product based planning is best done within a team environment such as a planning workshop. This has the added advantage of using the combined knowledge skills and experience of all those present.

The best practical way of carrying out  a product based planning workshop is by doing the following:

1. Distributing a draft copy of the Project Product Description, and via a flip-chart or overhead projector, refine the information in that document.

2. Creating the product breakdown structure. This is the product based planning step, that you should take most time with. Consider splitting the participants into groups,  or facilitating them as one large group.

Give each participant a set of POST-IT Notes, and get them to name the products they believe necessary -- one name per Post-It.

Using a large sheet of paper usually mounted on a wall, get each of these post-its laid out in the form of a product breakdown structure. Be prepared for more than one opinion of the correct structure, it is important to reach a compromise during these product based planning workshops.

3. Draft copies of all major product descriptions can now be created, or you may choose to leave such creation until both of the diagrams within product based planning have been created.

4. It will be fairly straightforward to reuse the post-it notes to create the product flow diagram. Take pictures if you like with your cell-phone camera!

That completes the product based planning technique, but the plan document has not been finished yet....

NOTE. Planning is an iterative activity, and you WILL come back to one or more of the previous product based planning steps...

The remaining steps of the planning process, will now be dealt with.

Estimating. PRINCE2 gives little advice on estimating, and this is a good thing, because projects and industries will vary greatly in their use of estimating techniques. However the following points may be helpful:

Top down estimating

This is normally used when creating the project plan level.

This can be done using a flipchart with a few key people to determine the high level technical tasks that needs to be undertaken. Examples such as design, development, testing, etc, can be used here. Using the experience of the people present, a top level approach of costs and timescales for each of these activities can be estimated.

An example might be " this activity will take around four weeks, and will need on average three people working full-time". Knowing what the labour costs are, and any other non-than human resource, it is easy to arrive at a cost figure.

Drawing a simple Gantt Chart on the flip-chart will give a top level estimates of the total project duration.

PRINCE2 product based planning Tip 1

As a result of estimating, several outcomes may show that you need to return to product based planning, and here are a few examples:

The product that this activity relates to, needs a modified Product Description possible in terms of description, those working on it, or the quality criteria.

The product that this activity relates to, is now looking too complicated and may need to be split into several products

The product that this activity relates to is too expensive and needs to be de-scoped

The product that this activity relates to requires different development skills and may be subcontracted out

PRINCE2 product based planning Tip 2

As a result of modifying product descriptions as above, the product breakdown structure and product flow diagram may need to be modified in some way. Another team based product based planning workshop may need to be convened.

Bottom-Up Estimating

This is normally used when creating the stage or team plan levels.

The secret here is not to estimate the task duration, but to consider the work effort needed within each task. Making assumptions about how many people will be carrying out the work on each task, the duration and costs for each class can be estimated.

Using a planning tool and the experienced advice from the team, the tasks or activities needed to create each product can be set up in the correct sequence and showing the right dependencies between each.

PRINCE2 product based planning Tip 3

When creating Product Descriptions at Project Plan level, you just issue draft versions (several of the description fields will be annotated as 'Not Yet Known' ) because at this point in time, the team cannot know the full details until the relevant stage in which the product is being created.

Therefore, when performing stage planning the following options may need to be considered:

Scheduling

Using the name of each product in turn, get the participants to create new post-it notes, one for each activity that would be necessary to create each product. These new post-it notes can now be used directly to create a traditional network diagram.


The product post-it notes will be represented on such a diagram as a milestone.

What happens next will depend upon the complexity of the project. PRINCE2 assumes the use of a planning tool, and it is often best to bring this planning meeting to a close, and use the network diagram as an information source to enter activities directly into such a tool.

The remaining steps within scheduling can now take place, such as Critical Path analysis, resource leveling and loading, agreeing control points, and the creation of other costs and resource plans.

PRINCE2 product based planning Tip 4

Now that scheduling has been performed, it may become clear that the project time-frame is too long, and some of the following options need to be considered (note that all of them will result in returning to different steps in the product based planning steps:

PRINCE2 Risk Analysis

This consists of using the team to determine what the risks are facing this particular plan. This uses risk analysis including the selection of possible risk responses.

These actions will need to be built into the plan in the form of activities and resources -- resulting in returning to previous steps to include these resources for example within the network diagram.

It is important to take detailed notes here for inclusion within the Risk Register late - particularly allocation of each Risk Owner.

PRINCE2 product based planning Tip 5

A risk is a threat or opportunity to the project's objectives (time, cost, quality, etc...), and one or more of the risk responses MAY be to de-scope or change the quality criteria of the product and hence its product description.

Another potential outcome is that different resources are need in the activities that contribute to the product. Hence the need to return to product based planning.

Completing the Plan

This is the final step, and since in PRINCE2 all plans documents, the narrative sections of the plan can now be created -- resulting in the completed draft document.

It is advised that copies of this draft be circulated to all those involved in the planning with requests for feedback so that a second drafts can be created. Project Assurance should review all draft copies of Plans.

It can also be helpful to give copies of such draft plans to members of the project board prior at an end stage assessment, so that the meeting itself can be used to clarify, and make decisions on whether the project should proceed.

PRINCE2 product based planning Tip 6

The Plan document may contain diagrams of the product breakdown structure and product flow diagram, and this may lead to updating them. After the draft plan has been reviewed, the feedback or instructions from the project board may be to re-plan before they will authorize it.

In such a case product based planning will need to be reconvened, usually in the form of a product based planning workshop.