1

TITLE:

STUDENT NAME: AZIM MOHAMMED

STUDENT ID: 1722448

UNIT CODE: BSS060-6

UNIT TITLE: PROJECT MANAGEMENT

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TABLE OF CONTENTS

Executive Summary page 3

Introduction page 4
PRINCE2 Overview page 5
Business Justification page 6
Roles and Responsibilities page 7
Managing Risks page 9
Manage By Exception page 10
Conclusion page 11
Recommendation page 12
References page 13
Bibliography page 15
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EXECUTIVE SUMMARY

This research paper will evaluate the application of the PRINCE2 methodology within the
Tesco project. It gives an overview of the PRINCE2 methodology.PRINCE2 is a structured
product based methodology that consist of seven themes, seven processes and seven
principles. In this paper I explore those principles which are unique to PRINCE2 and not
found in other methodologies. The seven principles of PRINCE2 are the foundation upon
which the entire methodology is based and what makes this methodology special and sets it
apart. Secondly, this paper outlines strengths and weaknesses of its principles; business
justification, roles and responsibilities, managing risk, managing by exception. Lastly the
conclusion presents practicability of the PRINCE2 methodology and gives recommendations
to address its limitations.
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INTRODUCTION

Project management provides best practice methods of utilizing resources efficiently,

mitigating risks, decreasing time and cost output and improving stakeholder engagement thus
increasing project success rates and organizational competitive advantage. (Project
Management Institute, 2010). During periods of economic downturn, the practice of this
discipline was increased as a means of ensuring the survival of an organization.
Project management is categorized into four main areas;- planning, delegating, monitoring
and controlling and further employs a scope of knowledge from ten areas;- integration, scope,
time, cost, quality, procurement, human resources, communication, risk management and
stakeholder engagement. (Project Management Institute, 2010)
Various project management methodologies are used to achieve business objectives. A
project management methodology is a defined as a structured system of processes and
principles used to guide persons employed within the field.
The case study gives an overview of the Tesco Contactless Clubcard. Supermarket Tesco and
Thames Card Technology successfully launched the new Contactless Clubcard Loyalty Card
Programme. The upgrading of the Clubcard provides a host of new features in addition to
making shopping simpler for customers. The project required the synthesis of numerous
technological processes to be completed within an allocated timeframe.
Information Technology (I.T) is pivotal to project management, and this is illustrated in the
Tesco Clubcard project. Considering this fact, the project management methodology,
PRINCE2 (Projects in Controlled Environment) would be the ideal methodology for the
Tesco project. Tesco Clubcard is an I.T based project and large scale project intended to
target millions of customers PRINCE2 is a globally recognized and has proven to be
effectively applied and successful in managing small and large projects within the I.T sector
however its application spans the construction, transport and infrastructure, oil and gas,
banking, engineering, operations management and marketing sector.
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PRINCE2 OVERVIEW

One of the most popular and widely used methodologies is PRINCE2. PRINCE2 (Projects in
Controlled Environments) is a structured management methodology used considerably
throughout the United Kingdom (U.K.) and internationally within both the public and private
sectors. PRINCE2 is the second edition of the PRINCE methodology which was developed in
1989 by a U.K. agency CCTA (The Central Computer and Telecommunications Agency).
PRINCE defined standards for Information Technology (I.T.) management however it proved
to be effective in managing projects outside the I.T. sector. In 1996 the second edition
PRINCE2 was released and has since undergone numerous updates.
Although, this methodology is mainly used in the I.T. sector, its application spans the
construction, transport and infrastructure, oil and gas, banking, engineering, operations
management, and marketing sectors.
PRINCE2 is defined by seven principles, processes and themes which can be applied to any
project. A list of these key elements are presented in the following table.

Principles Processes Themes

Business Justification Starting a Project Business Case
Learning from Experience Directing a Project Progress
Defined Roles and Responsibilities Initiating a Project Organization
Manage by Stages Controlling a Stage Risk
Manage by Exception Managing Product Delivery Change
Focus on Products Managing a Stage Boundary Quality
Tailor to suit the project environment Closing a Project Plans
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BUSINESS JUSTIFICATION

According to Cicmil (1997) research into primary sources of failing projects indicated that
lack of understanding and the inability to identify the client/customer needs was one of the
main reasons of failure. It is because of this fact that preparation of the Business case
beforehand will greatly benefit the project manager and affect the project positively. A
successful project is dependent upon a solid business case which is a vital Project
Management tool and lies at the heart of PRINCE2. The business case is significant for many
reasons; prevents wastage of project resources, determines which projects are important,
delivers on achieving project objectives/results and lessons are learnt from each project .In
contrast the business case outlines guidelines to assess the viability of a project, but it does
not specify the approach the board should pursue in order to align business processes with
project objectives. Furthermore, the project team heavily focuses on planning and
documentation throughout the project’s life rather than dedicating time and resources to
achieving project objectives (Kruger & Rudeman, 2013).
Bentley (2015) highlights the significance of the business case and explains that it assesses
the viability of a project; linking business justification and organizational benefits.
Organizational benefits are determined by the outcome of a project and weighed against
project cost. Therefore, the benefits of a successful project are greater than cost (Priyanka,
2016).
Business justification defines the plan of the scope of a project’s processes based on three
constraints of cost, quality and time. For instance, the Tesco Clubcard project proves to be a
viable project undertaken by Tesco Supermarket and Thames Card Technology .A business
case would have been prepared by Simon Pepperdine, the Project Manager of the Tesco
Clubcard Project which would have illustrated the most crucial information in order to
initiate the project. Although, the loyalty card programme is not a new service provided by
Tesco, the upgrade provides new technological features that make shopping easier for
Customers.
. Continued Business Justification is a PRINCE2 principle and this demands that the business
justification is reviewed frequently and updated as new occurrences arise. In the Tesco
Clubcard project, the business case and continued business justification is of extreme
importance as a project of this magnitude could easily plummet into failure due to poor
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management of stakeholders, poor estimating, conflict, poor communication/negotiation,

scope creep and several other factors. Poor communication results from roles and
responsibilities not being clearly defined and this would be further elaborated upon in the
following section.

ROLES AND RESPONSIBILITIES

The major strength of PRINCE2 is that the roles and responsibilities are clearly defined
(Pawar & Mahajan, 2017).Within any project the roles and responsibilities must be clearly
designated if the project is to be successful. Bentley (2015) asserted that the roles and
responsibilities in any project can be categorized into one of three groups; business, user,
supplier.
PRINCE2 provides an organizational structure which reflects the different levels of
management within the project environment (Reid, 2006).Furthermore, Siegelaub (2004)
highlights the importance of assembling a project board to represent the interests of the senior
user, business and senior supplier. PRINCE2 specifies that the board has the ‘authority’ in the
project however the project manager is held accountable for the success or failure of the
project. Kruger and Rudeman (2013) highlights that although PRINCE2 clearly defines each
team members roles and responsibilities, it fails to address the necessary competencies of
carrying out projects task. Other downfalls of PRINCE2 is that it doesn’t address the
likelihood of conflict among team members, a lack of emphasis on motivation interpersonal
and leadership skills.
Within the organizational structure1, the team manager reports to the project manager, and the
project manager reports to the board. Although the organizational structure illustrates a
managerial hierarchy, the different management levels support one another to accomplish the
project objectives .Clearly defining roles and responsibilities promotes cohesion amongst
team members and allows the team to function efficiently, thus greater chance of project
success. Maylor (2010) suggested the use of a responsibility matrix2 in order to simplify the
allocation of tasks.

1
See Organizational Structure chart Fig 1.1
2
See responsibility matrix Fig 1.2
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By applying these tools and principles in the Tesco project, the project manager, would first
clearly categorize the roles and responsibilities and then delegate these tasks to the necessary
persons and/or team. As past experiences show, when roles are not properly defined, the
entire project is at risk because of something so trivial as difference of opinion or personal
opinion on some matter. A task as simple as this can save a project exorbitant sums of time
and money and be the striking difference between project success or failure .Conflict within
the project team or board is inevitable at some point and may result in ‘foot dragging’ and
this simple method can restrain it (Meredith & Mantel Jr, 2003).

• Corporate or Programme Management (All levels of

Corporate management)

• Senior Management
Stakeholder • Senior User (Customer), Business, Senior Supplier

• Project Manager
Management

• Team Managers/Leaders
Delivery

FIGURE 1.1: ORGANIZATIONAL CHART

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Figure1.1https.<://www.google.com/search?q=responsibility+matrix&source=lnms&tbm=isch&sa=X&ved=2ahUKEwjq2-a-
rOvaAhXxp1kKHQ0uB3kQ_AUoAXoECAAQAw&biw=1366&bih=613#imgrc=XufXgYDp8xX7mM>.

MANAGING RISKS

All projects confront uncertainty in trying to achieve their objectives that can originate from
external of the organization or it can be an internal factor .Risk can be either positive or
negative,PRINCE2 refers to those with a negative impact as ‘Threats’ and those which
influence the project positively are termed as ‘Opportunity’ (Bennett, et al.,
2017).Insufficient risk management can be detrimental in project management as can be seen
from past experiences such as the $600 million dollar Denver Airport incident. According to
Meredith and Mantel Jr (2003) there are six sub processes in managing risk which will be
expanded upon.
Risk Management Planning – occurs before the project is initiated and involves deciding how
to approach risk management activities for a project.
Risk Identification – This involves determining the types of risks that the project may face
and documenting them.
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Qualitative Risk analysis- This involves performing a qualitative analysis of risks and
conditions to prioritize their effects on the objectives of the project.
Quantitative Risk Analysis- This includes measuring probability and consequences of risks
for project implications.
Risk Response Planning- developing strategies to enhance opportunities and reduce threats to
the projects objective.
Risk Monitoring and Control-identifying new risks, executing risk reduction plans and
analysing the effectiveness of this procedure throughout the duration of the project.
(Meredith & Mantel Jr, 2003)
It is evident that whist managing risk the six steps ‘work into’ each other and are not
independent of each other. However the ‘environment’ is another major factor that impacts
projects greatly. Note that ‘environment’ refers to anything external to the project that can or
can be affected by it.
However, Turley (2010) highlighted five steps in the risk management procedure associated
with PRINCE2. It is clear that the PRINCE2 does not carry out risk management early in the
project and this is a major risk or limitation when utilizing this methodology (Pawar &
Mahajan, 2017).
PRINCE2 does not have a good risk management system this a proper risk management
system such as the aforementioned should be adopted.
In the Tesco case the Project Manager would have formulated a risk management plan at the
time the business case was written and a risk management fund would have been prepared for
the project. The project manager would regularly receive feedback in order to properly
perform risk monitoring and control .Moreover, in a project as large as this he would
constantly ensure that the projects are not open to any ‘ threats’ and persistently try to exploit
and/or enhance ‘opportunities’ that may arise.

MANAGE BY EXCEPTION

This principle is closely related to and of great importance to the progress theme (Bennett, et
al., 2017). Managing by Exception is used at each level of the organization to manage the
lower level. Bennett et al (2017) outlined that an ‘exception’ refers to a situation where it can
be estimated that there will be a deviation beyond agreed tolerance levels. Tolerances are the
permissible deviation from without escalating the deviation to the next level of management
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(PRINCE2, 2018). PRINCE2 advises that two specific funds; the risk budget and change
budget be created for the duration of the project. Managing by Exception principle is an
extremely important principle that is used in PRINCE2 to manage the layer below. The
change budget is only to be used to fund changes whereas the risk budget is only to be
utilized in actions dealing where risk become a factor and will only be available to the risk
management team. If it is not used then it is returned upon completion of the project. Team
managers/leaders are responsible for managing their assigned tasks without direct supervision
from upper level management. Therefore, they are accountable for the success or failure of
their respective project task. However, if they are faced with an issue that they are unable to
address, it must be reported to higher management. This ascertains the exact source of the
problem and how it should be resolved to mitigate risks in projects life. Some disadvantages
of management by exception are; since this discourages communication, an incompetent
person may not recognize a potentially serious issue and thus not bring it to the attention of
the management team. This principle also provides senior management with efficient use of
their time.

FOCUS ON PRODUCTS

The focus on products principle of PRINCE2 is related to all of the themes and processes of
PRINCE2.If quality, risk management, scope, are not prioritized at all throughout the project,
then failure is guaranteed (Bennett, et al., 2017). Heavy emphasis should not be placed on
product delivery. Business Justification outlines the focus of the business cause which is to
ensure that the product’s focus is on the realized outcome of the stakeholder benefits and
product usability. Product must be aligned to outcome and project objectives. Although, the
business specifies stakeholder benefits this is subject to the predictability of change. As
stakeholder benefits change, the scope of the project changes as well, therefore the project
will have to be closed. The Focus on Product principle also prevents the discontent of the
users by agreeing at the beginning what will be produced by the project (Bennett, et al.,
2017).This principle is mainly concerned with quality. The focus on principle also advises
that a product description should be agreed upon so all stakeholders know what to expect. By
performing this task the stakeholders are given a timeline and the project manager and project
team begin to plan the process to commence the project.
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CONCLUSION
In order to utilize the PRINCE2 methodology on a project like the Tesco project, some
principles should be altered. It is important to know the project on all levels so a thorough
study should be done when formulating the business case.PRINCE2 should be modified
according to the organization and the ’environment’ bringing all other positive and negative
factors into the equation whilst formulating the business case so to be able to properly
understand and identify the risks present in the project. Risk management should be added to
the PRINCE2 methodology along with a method of providing motivation to teams. In
conclusion PRINCE2 is a methodology that can be applied to any project with some
innovation and minor modification.

RECOMMENDATIONS
PRINCE2 has many advantages and can be tailored to any project regardless of project size.
Since the PRINCE2 methodology does have multiple limitations I would suggest regular
meetings with the executive board and/or stakeholders to assess the project’s progression
during the process stages in addition to risk management and risk response planning with a
risk management fund allocated. Corporate management and supplier needs to acquire an
integrated software to ensure that both parties use the same methodology. Training programs
to ensure that all project members are competent in performing tasks .Project goals need to be
aligned to business objectives in order to prevent misplaced focus on planning. Encourage an
environment of motivation and cohesion through team building activities. Cross train team
members so that they would appreciate and have a better understanding of the ideas of the
roles and responsibilities of each team member. The project manager should have a
communication management strategy document formulated which states the formal and
informal modes of communication between all stakeholders involved in the project. Using the
PRINCE2 methodology in conjunction with PMBOK or agile will produce much better
results than using PRINCE2 as a stand-alone methodology.
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References
Associate for Project Management, 2018. Association for Project Management. [Online]
Available at: www.apm.org.uk
[Accessed 26/04/2018 April 2018].
Bennett, N. et al., 2017. Managing Successful Projects with PRINCE2. 6th ed. Norwich: Axelos
Limited.
Bentley, C., 2015. The PRINCE2 Practitioner :From Practitioner to Professional. 3rd ed. New York:
Butterworth- Heinemann.
Besner, C. & Hobbs, B., 2012. The paradox of risk management;a project management practice
perspective. International Journal of Managing Projects in Business, 5(2).
Bradley, K., 1997. Understanding PRINCE2. Dorset: SPOCE Project Management Limited.
Cicmil, S. J., 1997. Critical Factors of Effective Project Management. The TQM Magazine, 9(6).
Hillson, D., 2003. Assessing organisational project management capability. Journal of Facilities
Management, 2(3).
Kruger, W. & Rudeman, R., 2013. Strategic Alignment of Application Software Packages and Business
Processes using PRINCE2. International Business and Economics Research Journal, 12(10).
Laszlo, G. P., 1999. Project Management:A quality management approach. The TQM Magazine,
11(3).
Lewis, J. P., 2002. Fundamentals of Project management. 2nd ed. New York: American Management
Association.
Madhuri, L. K. & Suma, V., n.d. Influence of Scope Creep on Project Success:A Comparative study
between conventional approach versus agile approach. Research and Industry Incubation Centre.
Maylor, H., 2010. Project Management. 4th ed. Great Britain: Pearson Education limited.
Meredith, J. & Mantel Jr, S. J., 2003. Project Management , A Managerial Approach. 5th ed. New
York: John Wiley and sons,Inc.
Nelson, R. R., 2007. IT Project Management:Infamous failures,Classic Mistakes, and Best Practices.
MIS Quarterly Executive, 6(2).
 14

Pawar, R. P. & Mahajan, K. N., 2017. Benefits and Issuses in Managing Project By PRINCE2
Methodology. International Journal of Advanced Research in Computer Science and Software
Engineering, 7(3).
PRINCE2, 2018. PRINCE2. [Online]
Available at: www.prince2.com
[Accessed 2nd May 2018 May 2018].
Priyanka, 2016. Critical Evaluation of PRINCE2 and AGILE Project Management Methodologies For a
Complex Project. Internationl Journal of Engineering and Computer Science, 5(10), pp. 18702-18706.
Project Management Institute, 2010. The Value Of Project Management. White Papers.
Reid, K., 2006. How PRINCE2 Contributes to Sucessful Project Delivery in The Public sector-A local
Government Perspective. Johannesburg, 2006 PMSA International Conference.
Turley, F., 2010. The PRINCE2 Training Manual. 1.0h ed. s.l.:s.n.
Zafarani, E., 2011. Project Quality Management Approaches:A comparative Evaluation of
International Standards. Singapore, IACSIT Press.
 15

Bibliography
Associate for Project Management, 2018. Association for Project Management. [Online]
Available at: www.apm.org.uk
[Accessed 26/04/2018 April 2018].
Bennett, N. et al., 2017. Managing Successful Projects with PRINCE2. 6th ed. Norwich: Axelos
Limited.
Bentley, C., 2015. The PRINCE2 Practitioner :From Practitioner to Professional. 3rd ed. New York:
Butterworth- Heinemann.
Besner, C. & Hobbs, B., 2012. The paradox of risk management;a project management practice
perspective. International Journal of Managing Projects in Business, 5(2).
Bradley, K., 1997. Understanding PRINCE2. Dorset: SPOCE Project Management Limited.
Cicmil, S. J., 1997. Critical Factors of Effective Project Management. The TQM Magazine, 9(6).
Hillson, D., 2003. Assessing organisational project management capability. Journal of Facilities
Management, 2(3).
Kruger, W. & Rudeman, R., 2013. Strategic Alignment of Application Software Packages and Business
Processes using PRINCE2. International Business and Economics Research Journal, 12(10).
Laszlo, G. P., 1999. Project Management:A quality management approach. The TQM Magazine,
11(3).
Lewis, J. P., 2002. Fundamentals of Project management. 2nd ed. New York: American Management
Association.
Madhuri, L. K. & Suma, V., n.d. Influence of Scope Creep on Project Success:A Comparative study
between conventional approach versus agile approach. Research and Industry Incubation Centre.
Maylor, H., 2010. Project Management. 4th ed. Great Britain: Pearson Education limited.
Meredith, J. & Mantel Jr, S. J., 2003. Project Management , A Managerial Approach. 5th ed. New
York: John Wiley and sons,Inc.
Nelson, R. R., 2007. IT Project Management:Infamous failures,Classic Mistakes, and Best Practices.
MIS Quarterly Executive, 6(2).
Pawar, R. P. & Mahajan, K. N., 2017. Benefits and Issuses in Managing Project By PRINCE2
Methodology. International Journal of Advanced Research in Computer Science and Software
Engineering, 7(3).
PRINCE2, 2018. PRINCE2. [Online]
Available at: www.prince2.com
[Accessed 2nd May 2018 May 2018].
 16

Priyanka, 2016. Critical Evaluation of PRINCE2 and AGILE Project Management Methodologies For a
Complex Project. Internationl Journal of Engineering and Computer Science, 5(10), pp. 18702-18706.
Project Management Institute, 2010. The Value Of Project Management. White Papers.
Reid, K., 2006. How PRINCE2 Contributes to Sucessful Project Delivery in The Public sector-A local
Government Perspective. Johannesburg, 2006 PMSA International Conference.
Turley, F., 2010. The PRINCE2 Training Manual. 1.0h ed. s.l.:s.n.
Zafarani, E., 2011. Project Quality Management Approaches:A comparative Evaluation of
International Standards. Singapore, IACSIT Press.