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For Portfolio, Programme, Project,
     Risk and Service Management




  Using PRINCE2™ to Manage US Federal
         Government IT Projects
Applying the PRINCE2 project management method to support
       Capital Planning and Investment Control (CPIC)
                                      Richard Tucker, PMP
                                       ICOR Partners, LLC




                                                            White Paper
                                                            September 2009
2   Using PRINCE2 to Manage US Federal Government IT Projects




Abstract                                        each agency to institute effective and
                                                efficient capital planning processes for
This paper shows how the PRINCE2 project        selecting, controlling, and evaluating their
management method supports US Federal           investments in IT projects. These projects
government project managers as they             represent the strategic investment in IT
deliver IT investments while satisfying         capital assets that define an agency’s               Select             Control
requirements of the Clinger-Cohen Act and       IT portfolio.
Capital Planning and Investment Control.
                                                OMB requires each agency to institute
Since enactment of the Clinger-Cohen Act        effective capital planning.
(CCA) in 1996, the US Federal government                                                                      Evaluate
requires its agencies to improve their
                                                The CCA references use of a three-phase
management, oversight and control of
                                                cycle for capital asset management to
investments in information technology.
                                                provide oversight of investment budgeting
Central to the CCA is an obligation for
                                                and spending. First, by selecting IT capital
agencies to select, control, and evaluate
                                                asset investments that will support core
                                                                                               IT Investment Management Cycle
their portfolio of IT projects in accordance
                                                mission functions performed by the Federal
with the principles of Capital Planning and
                                                Government; Next, through controlling
Investment Control (CPIC), an approach to                                                      The Control phase is an ongoing
                                                their projects effectively through the
IT investment management referenced in                                                         investment management process designed
                                                application of best practices in project and
the CCA.                                                                                       to monitor the progress of IT projects
                                                performance management; And then, by
                                                                                               against budgeted cost, schedule,
In the same year the CCA was signed into        evaluating investment results through a
                                                                                               performance goals, and expected mission
effect, the UK government released              demonstration that the return on
                                                                                               benefits. The Control Phase helps to ensure
PRINCE2™, a principles and themes based         investment is supporting initial business
                                                                                               that each investment is properly managed
project management method designed to           case objectives. CPIC links the strategic
                                                                                               toward the intended objectives defined by
provide direction and oversight of              planning of mission attainment to the
                                                                                               the investment’s business case. However,
government/contractor projects. Project         tactical performance of project delivery
                                                                                               the Control process does not manage the
managers can find it difficult to meet the      and IT systems operations. The three
                                                                                               investment project. The responsibility to
requirements of CPIC while running a project.   phases of CCA’s IT Investment
                                                                                               define a project management governance
Industry leading project management             Management process are performed
                                                                                               model is left to the agency and the project
guides suggest one approach, contractors        annually, and applied to IT investments
                                                                                               manager. It is not defined by CPIC.
have another, while investment oversight        continuously, throughout the life of an
groups within the agency reinforce the          asset’s existence within the agency’s          In the Evaluate phase, project outcomes
additional requirements of CCA onto the         IT portfolio.                                  are measured, and systems are determined
project team.                                                                                  to be fit for purpose. Performance results
                                                                                               are assessed to: (1) identify needed
                                                Select, Control                                changes to products or systems to maintain

Capital Planning                                and Evaluate
                                                                                               optimal business operations; (2) measure
                                                                                               the project’s effect on mission and strategic

and Investment                                  During the Select phase, the agency
                                                                                               goals; and (3) continuously improve the
                                                                                               agency’s investment management

Control                                         determines investment priorities according
                                                to their mission needs, and makes decisions
                                                                                               processes based on lessons learned,
                                                                                               self-assessments and benchmarking.
The Information Technology Management           about which technology initiatives (new
Reform Act of 1996, commonly referred to        and ongoing) they will fund for the next
as the CCA, requires US Federal agencies
to “identify and collect information
                                                fiscal year. The Select Phase determines
                                                which projects are to be included in the       The Challenges
regarding best practices” for managing IT
related projects. The CCA identifies the
                                                agency’s IT portfolio for the coming year.
                                                Projects identified as significant to the      of CPIC
government’s approach to information            mission (a major investment) must include      Interpretation of the CCA and CPIC has
technology investment management as             a comprehensive business case that             led to conflicting and competing solutions
Capital Planning and Investment Control         supports the IT portfolio selection process.   to satisfy its many requirements. OMB
(CPIC). Specifically, the CCA, through                                                         continues to amend their supporting
oversight from the President’s Office of                                                       Circular A-11, which keeps agencies’
Management and Budget (OMB), requires                                                          reporting requirements a moving target.
Using PRINCE2 to Manage US Federal Government IT Projects      3




Agency responses to these changes are             when CPIC reporting is a pre-defined             of CPIC while controlling and delivering the
often seen as adjustments in the project          output designed into the project method,         project. You must use a method that defines
management processes and tools used to            CPIC becomes integral with the other daily       how and when to apply project management
control the investment. Such a response           management and decision-making                   processes and techniques. The method
weakens an agency’s ability to mature their       activities of project management.                must be scalable to the size of the
project management practices. Instead,                                                             investment, and it must define governance,
agencies should continue to develop and           Additional challenges face government            tools and techniques that can balance the
mature their project methods and tools,           project managers. The goals of CPIC are          pulling forces that may exist between
while adjusting reporting output to match         focused on budget management, not                government and contractor. PRINCE2 is a
the OMB A-11 annual requirements.                 project management, which creates conflict       de facto standard project management
                                                  in tactical management objectives. IT            method from the UK government. It is
Practitioners often confuse the cyclical phases   Investment Management support offices            public domain, available for anyone to use
of the CCA’s Select–Control–Evaluate as a         within the agencies are tasked with collecting   to manage a project, it can support the
project management lifecycle, for example,        and reporting financial information from         many requirements of CCA and CPIC, and
thinking that a project is in development         the agency’s projects, while project             it can be tailored to fit most any size project.
activities only during the Control phase.         managers focus on performance to cost
This is inaccurate. The three phases of the       and schedule milestones, earned value
CPIC IT Investment Management lifecycle
define the sequence of when budget and
                                                  management, risk and issue status, and
                                                  baseline change control logs. Too often,         What is PRINCE2?
investment management activities occur to         the data and information that reports            PRINCE2 is a structured project
plan, monitor and report the progress of IT       project status is gathered using tools and       management method recommended for
investment dollars. The “project” lifecycle       techniques that are in contrast with the         use on all projects commissioned by the UK
of CPIC has a linear progression, from            investment management reporting                  government. In 1989, the Central Computer
Planning and Acquisition, to Management           requirements of the CCA, CPIC and OMB.           and Telecommunications Agency (CCTA) of
In-Use and Disposition. It starts when a                                                           the UK government first established PRINCE
business need is first defined and IT systems                                                      (PRojects IN Controlled Environments) for
planning activities warrant a new project
initiative, then continues to product
                                                  Finding a Solution                               controlling information systems projects,
                                                                                                   but the method soon realized a greater
acquisition/development, systems operation
(production), and then asset retirement. In
                                                  to CPIC                                          following. The UK Office of Government
                                                                                                   Commerce (OGC), continued development
response to this, agencies should define          Project managers are searching for a             of the method into what is now PRINCE2
and operate an enterprise lifecycle               governance model that can support both           (2009). Improvements include greater
management framework that integrates              the day-to-day needs of project delivery         clarity of seven principles that guide
governance, processes and information into        and the requirements of CPIC investment          behavior of the project team as they perform,
a decision model that includes the                management reporting. While the PMI’s            streamlining of the processes defined
requirements of investment and acquisition        Guide to the Project Management Body             within the method, and instruction on how
management, enterprise architecture               of Knowledge® is clear in identifying            to tailor PRINCE2 to suit most any project’s
planning, project management office               tools and techniques for performing              needs. PRINCE2 has gained wide acceptance
(PMO), IT systems operations and                  project management activities, it is by its      throughout Europe and Africa, and is
maintenance, and capital asset control.           own admission “a guide rather than a             quickly gaining popularity in North America.
                                                  methodology”, and it is not designed to
 CPIC defines the activities of budget            address compliance requirements, such
 and investment management.                       as those defined by CCA. To operate
                                                  a project in a way that will achieve the                                                       ™
Project managers react to the oversight           needs of CPIC, project managers must
and governance of CPIC as a set of tasks          utilize a method that supports sustainment
and requirements that are in addition to          of an investment business case, clearly
their effort to running the project. This has     identifies a governance process, and lends
led to frustration while project mangers          itself to regular reviews for “Go/No-Go”
work to deliver their projects. Project           decisions, as required by US government IT
managers sometimes view CPIC reporting            investment management budget cycles.
as a “check the box” activity. Maintaining
compliance to CPIC reporting can take             Satisfying the requirements and objectives
considerable effort if it is not integrated to    of CPIC is not easy. However, with the right
the project governance approach. However,         project management method the project
                                                  manager can easily achieve the requirements
4      Using PRINCE2 to Manage US Federal Government IT Projects




                                                                              Subsequent                            Final
             Pre Project                        Initiation
                                                                               Delivery                            Delivery
                                                  Stage
                                                                               Stage(s)                             Stage
PRINCE2 Stage-Gates for Controlling Project Delivery
© Crown copyright 2007. Reproduced under licence from OGC. Figure 4.2 The development path of the business case – Section 4



Principles of PRINCE2                             team managers, suppliers, and change
                                                  control authority is clearly identified
                                                                                                   Learn from Experience
                                                                                                   PRINCE2 is an experiential process.
PRINCE2 is a scalable method that you             throughout the PRINCE2 method. The               Performing regular lessons learned reviews
can apply to projects of varying sizes and        activities necessary for sponsoring,             is a key activity to success with PRINCE2.
types. The seven principles of PRINCE2 are        directing and managing the project are           While a project is, by definition, a unique
universal in nature, they are self-validating     not left to chance.                              endeavor, the approach to running a
due to the many thousands of projects that                                                         project is based on repeatable themes,
have used the method, and they empower            Manage by Stages                                 processes, and reusable tools. When
the project management practitioner by            A PRINCE2 project is managed in stages,          starting a project, the project manager
providing a confident approach to directing       providing control points throughout the          leverages the experiences of past projects,
a project.                                        project lifecycle. The project manager           including reuse of approaches, performance
                                                  plans, controls and progresses the project       data for benchmarking metrics and targets,
Business Justification                            using a stage-gate approach. A high-level        defining work plans, and estimating cost
PRINCE2 projects perform continuous               project plan is supported by detailed stage      and schedule milestones.
justification of the investment’s objectives.     plans. Tranches that extend beyond the
Project goals are tied to the requirements        horizon remain at a high level until             Tailored to fit, PRINCE2 can best serve
within the business case to validate that         near-term work is completed to a degree          and support a project regardless of size,
the project continues to serve the needs          of certainty that improves likelihood of the     type, organization or culture. Adapting the
of the organization. This guides a project        investment achieving its goals and objectives.   PRINCE2 project management approach
team through the decision-making process                                                           to the situation ensures alignment of
throughout the life of the project, which         Management by Exception                          processes, tools and techniques, to best
keeps progress moving toward defined              Deviations experienced during a PRINCE2          support and govern the project, while
business objectives. Even compulsory              project are managed by exception by              avoiding success through heroics or forced
projects driven by legislative mandate            developing plans to identify variance from       compliance to process. PRINCE2 can be
require justification of the alternative          baseline. Tolerances for cost, schedule,         right-sized to the complexity and nature of
selected. PRINCE2 provides a governance           quality, scope, risk and benefit are delegated   the project environment.
model for guiding an organization toward          to the project management team, providing
an effective solution.                            an efficient use of resources to deliver with     PRINCE2’s use of principles based
                                                  fewer interruptions. Decisions are made at        project management directs the decision
                                                  the right level, while issues outside of          making process.
    The continued business justification of
                                                  tolerance are escalated only when necessary.
    high-risk UK Government projects is
    scrutinized by the OGC using a peer
                                                  Product Focused
    review Gateway™ process that is
    aligned to the way PRINCE2 supports
                                                  A project exists to produce output, not          The PRINCE2 Stages
                                                  to perform activities. PRINCE2 focuses on
    the development and management of
    the business case.
                                                  defining and delivering only those products      and Process Areas
                                                  that are within the scope of the project
                                                                                                   PRINCE2 is a process-based method
                                                  mandate (charter). PRINCE2 uses a product
Roles and Responsibilities                        breakdown structure to clarify the purpose,
                                                                                                   designed to direct, manage and deliver a
PRINCE2 defines the roles and                                                                      project to plan. The project team performs
                                                  composition, source, type, and quality
responsibilities of all stakeholders at all                                                        across seven defined process areas to
                                                  expectations of a final solution that will
stages and processes of the method.                                                                perform the many activities for delivering
                                                  fulfill the business case, defined to satisfy
Participation from investment oversight                                                            the objectives of the business case. PRINCE2’s
                                                  the organization’s mission.
board members, executive sponsors, the                                                             seven processes integrate with one another
project board (team), the project manager,                                                         by following a stage-gate lifecycle framework.
Using PRINCE2 to Manage US Federal Government IT Projects     5




This provides cadence to project                    quality, and product configuration             stage plan is completed. The SB process is
management activities, directing results            management are all supported by PRINCE2.       again used to report and close the stage,
toward pre-defined goals, and success.              Techniques from other industry-popular         and then subsequent Delivery Stages in
                                                    project management guides easily integrate     the project plan repeat the CS and MP
In the Pre-project Stage, the investment’s          with the processes of PRINCE2 to monitor       processes to continue solution fulfillment.
business objectives are determined by               and control the investment.
performing the activities in the Starting up                                                       The Final Delivery Stage completes
a Project (SU) process. The business                As the Initiation Stage completes, the         activities from the CS and MP processes
justifications for the investment are determined,   Managing a Stage Boundary (SB) process         during this last phase of the project. Then,
scope is defined, and alternatives are              calls for the project manager to plan the      using the Closing a Project (CP) process,
analyzed. Through performance of the SU             next stage of the project. The project         the project manager performs final product
process, the business case is established,          manager performs a business case review,       acceptance testing, resolves or retires open
readying the project team to obtain                 updates the project plan, and reports          risks and issues, reviews the investment’s
authority to proceed with the investment.           status of the investment to the project        performance to baseline, conducts a
                                                    board.                                         benefits realization review, and then
In the Directing a Project (DP) process,                                                           recommends the project for closure to the
the project is reviewed and approved by             Subsequent Delivery Stages follow              executive investment review board.
an executive review board to place the              the Controlling a Stage (CS) process. CS
investment in the IT portfolio. DP processes        provides guidance to the project manager
manage the business case for the duration
of the project lifecycle by providing senior-
                                                    to authorize work to the project resources,
                                                    monitor and report progress, manage risks      Seven Themes of
level oversight of the investment’s progress.       and issues, then take corrective action on
                                                    variances to the plan. The project board       PRINCE2
The Initiation Stage continues the DP               delegates day-to-day team activities and       Project management provides little value
process to provide regular oversight and ad         decisions to progress the project on a         unless it is performed with predefined
hoc direction of project activities. Upon           stage-by-stage basis. Activities of the CS     intent. PRINCE2 identifies seven themes
approval to proceed with the investment, the        process assigns work to team members           that are linked to project management.
Initiating a Project (IP) process establishes a     to ensure that they remain focused on          Each of the seven themes in the PRINCE2
solid foundation for achieving project              delivering the products and goals of the       method remains in effect during the entire
success through the identification of project       project plan. The Managing Product (MP)        project lifecycle. They are referenced
objectives and business benefits. IP also           Delivery process provides direction to the     according to a predetermined workflow
instructs the team to tailor project plans          team members. As products are delivered,       of the method to minimize risk, and to
and invoke governance over project                  achievement to design specification is         heighten the quality of team performance
activities. Plans to control communications,        assured; the business case is reviewed         and results.
scope, cost and schedule, risks and issues,         for relevance to mission, and then the


                                                                                        Subsequent                     Final
                                     Pre Project                  Initiation
                                                                                         Delivery                     Delivery
                                                                    Stage
                                                                                         Stage(s)                      Stage


     Directing                                                                        DP
                                   SU
                                                                            SB                        SB                        CP
    Managing
                                                                     IP                       CS                        CS


    Delivering                                                                               MP                         MP


The PRINCE2 Stage-Gate Management Model
© Crown copyright 2007. Reproduced under licence from OGC. Figure 11.1 The PRINCE2 Processes – Section 11
6   Using PRINCE2 to Manage US Federal Government IT Projects




Business Case                                  Quality                                       Risk
A project initiates with a need to drive       The criteria under which project products     Risk management is a key tenet of
transformation through an organization         are verified and accepted must be             PRINCE2. It identifies, assesses, and
to fulfill new or evolving mission             established early in the project lifecycle.   controls uncertainty that may affect project
requirements. The business case defines        PRINCE2 applies the tenets of quality         outcome. Risk planning starts early in the
why a project exists. PRINCE2 uses the         management at the start, where they           PRINCE2 method, where it is first used to
business case to carry requirements            are central to project delivery, making       mitigate project threats while initiating the
through to fulfillment, while maintaining      the final product fit for purpose. This       project. Where other project management
the project team’s focus on objectives.        supports achievement of desired benefits      standards offer a model for managing risk,
                                               defined by the business case. A robust        PRINCE2 defines the procedures, tools, and
Organization                                   quality management approach reduces           techniques for performing the risk process.
The PRINCE2 method defines roles and           the likelihood of discovering product
responsibilities at multiple levels for        performance issues when it is too late.       Change
directing, managing and delivering a                                                         Since change is inevitable for almost any
project. A PRINCE2 project’s organization      Plans                                         project, controlling variance to plan must
structure includes the executive oversight,    A plan is not just a schedule, but also a     be included in the management approach
project board, program sponsorship, senior     holistic approach to governance. PRINCE2      for maintaining the project baseline.
users, suppliers, team managers, support       projects follow defined and approved          PRINCE2 identifies an approach to change
staff, and project assurance personnel.        plans that integrate requirements, cost,      control that addresses issues that enter
Projects must often share resources with       schedule, quality, risk, roles, resources,    the project plan. PRINCE2 integrates
other parts of an organization. Clear          and communications. Performance to plan       change control of the project lifecycle
identification of the extended project         is measured in each stage of the project.     phase to configuration management of the
team reduces confusion and minimizes           Exception Plans define deviation from         operations and maintenance phase.
conflicting demands on staff as they serve     baseline, which are integrated into the
multiple requirements across the business.     master plan to steer performance back         Progress
                                               toward cost, schedule and quality goals.      The PRINCE2 method establishes
                                                                                             mechanisms to monitor, compare, review,
                                                                                             and report actual performance to baseline
                                                                                             objectives. Risks are mitigated, while
                                      Business                                               quality issues and problems are addressed
                                                                                             and corrected. Upon successful completion
                                       Case                                                  of scheduled goals, the next stage plan is
                                                                                             authorized, progressing the project toward
                                                                                             completion. Numerous reporting templates
                                                                                             are defined by PRINCE2, that include
          Progress                                              Organization                 definitions of each report’s contents and
                                                                                             use, all supported by the various processes
                                                                                             within the method.



                                    PRINCE2                                                  The Capital
    Change                         Processes                             Quality             Planning Lifecycle
                                                                                             of CPIC
                                                                                             So, let’s go back. The Clinger-Cohen Act
                                                                                             directs agencies to manage their IT budgets
                                                                                             by measuring the return on investment
                      Risk                                      Plans                        using a Select-Control-Evaluate process.
                                                                                             CCA also directs OMB to perform oversight
                                                                                             of agency IT spending. In response to CCA,
                                                                                             OMB recommends that agencies apply
                                                                                             planning, acquisition, management, and
                                                                                             disposition lifecycle controls to their major
The PRINCE2 Themes Support Performance
Using PRINCE2 to Manage US Federal Government IT Projects     7




                                                        Integrated Project Team




    Business                 Planning                                     Management                                          IT System
                                                      Acquisition                                 Disposition
  Requirement              & Budgeting                                      In-use                                           Retirement




                                                  IT Investment Management Cycle

                                             Select               Control                  Evaluate

The Capital Planning Lifecycle


IT projects. Simply put, each agency must        assurance and control, and other project       proposed budget to OMB during the Select
have a defined plan for buying, building,        management techniques. However, these          phase. Approved through the President’s
operating and retiring their IT assets, and      are only broad brushstrokes of guidance for    budget, the initiative receives funding from
they are accountable to report project           the project manager. The CPG does not          Congress to become a sanctioned project
status timely and accurately.                    define a project management method that        ready for acquisition.
                                                 must exist beneath these phases. So then,
OMB annually releases Circular A-11,             how can project managers lead their            Quality and risk management are central to
a budget management directive that               projects toward success while meeting the      PRINCE2, initiated during the Starting up a
requires agencies to report their annual         requirements of CPIC?                          Project and the Directing a Project
IT budget (using the Exhibit 53 form) and                                                       processes of the Pre-project stage. The
report progress toward goals within the          Planning and Budgeting                         PRINCE2 method supports the CPIC
business case of each major IT project           The CPG’s objectives of the Planning and       Planning and Budgeting phase through
(using the Exhibit 300 form). However,           Budgeting phase are designed to support IT     development of the project business case.
A-11 does not define, nor prescribe,             investment decision-making. Alignment of       The project manager justifies the business
a project management method or                   strategic planning to project performance      case to ensure that the investment is
approach for tactically controlling and          goals is determined by utilizing an agency-    planning to build the right product, is
delivering the project. Circular A-11 is         level enterprise architecture plan. An         fulfilling the right business need, and that the
only a process for reporting status of the       Integrated Project Team (IPT) is established   final products will serve the organization’s
budgeted and funded investments.                 to manage the project. The IPT formulates      mission. Once the business case is reviewed
                                                 a clear definition of system functional        and accepted by the investment board, the
OMB provides agencies additional                                                                project is authorized to proceed to the
                                                 requirements, performs an analysis of
direction in their A-11, Part 7 Supplement:                                                     Initiation Stage.
                                                 alternatives to select the best technology
Capital Programming Guide (CPG). The
                                                 solution, and establishes operating and
objective of the CPG is to show agencies
                                                 reporting baselines. They must apply            PRINCE2 keeps a focus on the business
how project management activities relate
                                                 risk management techniques to reduce            case to maintain IT business value.
to IT investment management. It helps to
                                                 the chance for incurring costs associated
answer the question, “Will this
                                                 with delivery failure, and integrate earned    CPIC’s requirement for EVM necessitates
investment drive transformation of the
                                                 value management (EVM) into the                a “deliverables-based” work breakdown
business toward the agency’s mission?”
                                                 contract acquisition strategies. The agency    structure to define project scope. During
The CPG defines a Capital Planning
                                                 implements an executive review process         the PRINCE2 Initiation stage, the product
Lifecycle: a four-phased approach to IT
                                                 to oversee investment performance and          breakdown structure becomes the
investment management. The lifecycle
                                                 adjust the investment as the needs of the      framework for managing solution delivery.
identifies strategies to achieve greater
                                                 mission change over time.                      Activities of the PRINCE2 Directing a
service delivery and move program
effectiveness toward mission goals. The                                                         Project process establish oversight and
                                                 Upon completion of a comprehensive             governance to lead investment plans
CPG recommends use of risk management,           planning effort to define an integrated
earned value management, quality                                                                toward mission goals.
                                                 project plan, the agency presents its
8   Using PRINCE2 to Manage US Federal Government IT Projects




                                     PRINCE2 Stage-Gate Project Management
                                                                         Subsequent                   Final
                        Pre Project                Initiation
                                                                          Delivery                   Delivery
                                                     Stage
                                                                          Stage(s)                    Stage




                                                   Integrated Project Team




                 Planning                                                 Management                     Disposition
                                                Acquisition
               & Budgeting                                                  In-use




                                           IT Investment Management Cycle

                                   Select                       Control                        Evaluate

PRINCE2 Project Management for CPIC


Acquisition                                     and actual results of both government          decision. The ERC recommends corrective
In the Acquisition phase of the Capital         and contractor resources applied toward        action plans where necessary to keep
Planning Lifecycle, the project team            development activities. Once the integrated    the project moving toward its strategic
validates decisions and objectives from the     project plan is approved by the ERC, a         and mission goals. Solution acceptance
Planning and Budgeting phase. The team          baseline is recorded as the project plan.      activities of the Acquisition phase include
re-examines the mission needs to affirm                                                        a complete review of delivered products
                                                The Control phase of CPIC is used to measure   to affirm that they meet all requirements
investment justifications in the business
                                                and improve investment performance. It         and objectives defined by the business
case to determine a “build versus buy”
                                                instructs project managers to perform          case. Product quality reviews, system
acquisition strategy. The IPT addresses
                                                regular monitoring of product development      testing, and recording IT assets into a
acquisition risks, and then the project is
                                                progress, cost, schedule and performance       configuration management baseline also
initiated. Teams are established, contract
                                                variance, review of scope within the work      happen. Any product deviations discovered
support secured, and then development
                                                breakdown structure, and assessment of         during solution acceptance are addressed
activities of the Acquisition phase commence.
                                                risk to the investment. Change control must    through rework or an accepted variance to
An Executive Review Committee (ERC)             be applied to maintain progress toward         plan. Additionally, contract performance
assesses the project team’s plan for            contractual scope. Investment control and      requirements are assessed to determine the
solution delivery. Following a successful       oversight is in the hands of the project       contractor’s success to the cost, schedule
procurement, the IPT operates project           manager during the Control phase. Periodic     and performance goals of the contract.
governance that integrates scope, cost,         status reports are brought to the ERC.
schedule and quality into a comprehensive                                                       PRINCE2 uses a stage-gated approach to
                                                As part of the CPIC Evaluate Phase, the
project management approach. EVM                                                                controlling project progress.
                                                IPT and ERC conduct reviews of project
is used to monitor and control planned
                                                progress to reaffirm the acquisition
Using PRINCE2 to Manage US Federal Government IT Projects    9




The PRINCE2 Controlling a Stage process
                                                  In Summary
continues to provide justification of
Acquisition phase activities performed            Since introduction of the Clinger-Cohen
                                                                                                    Author
during Subsequent Delivery Stages. The            Act in 1996, agency CIOs and project              Richard Tucker is a management
PRINCE2 processes provide oversight of            managers across the US Federal                    consultant with more than 20 years of
product development activities, guiding           government have been working to improve           experience in IT project management
the project team as they fulfill business         their IT investment management practices.         and Federal capital investment
case requirements. The project manager            The OMB A-11, Part 7 Supplement: Capital          management. He provides practical
conducts a review of the investment’s             Programming Guide provides project                knowledge and advice to US Federal
status to the detailed business case. Impact      managers guidance on the four phases of           agencies and departments. He is a
assessments are performed on any new              the Capital Planning Lifecycle, while             certified PRINCE2 Practitioner and
or existing risks and issues. The project         oversight performed using Capital Planning        a Project Management Professional
manager assesses progress towards cost,           and Investment Control monitors the value         (PMP). He is an active member of the
time, quality and benefit goals. Exception        returned from the dollars invested in IT          Federal CPIC Forum and contributor to
plans are introduced to address and correct       assets. However, without a project delivery       numerous online communities where
variances to baselines. The project manager       method that supports the control and              he shares his interest and experiences in
reviews completed work packages against           reporting requirements of CCA and CPIC,           project management methodology and
defined specifications. Configuration             teams continue to struggle to operate             tools implementation.
records and stage plans are updated upon          projects that exhibit best practices that         Richard Tucker, PMP
acceptance. Then, following the Managing          produce the right measures required by OMB.       Certified PRINCE2 Practitioner
a Stage Boundary process at the end of            Best practices defined in commercially            ICOR Partners, LLC
each Delivery Stage, the Project Board            driven project management guides fail to          www.icorpartners.com
authorizes continuation to the next stage         provide an approach that connects project
plan for the project.                             management methods to the IT portfolio
                                                  results defined by CPIC business cases.          Trademarks and
Management In Use                                                                                  Acknowledgements
and Disposition                                   In contrast PRINCE2 is a scalable and proven     •	 PRINCE2™ is a Trade Mark of the Office
Once the IT system goes into production,          project management method, having                   of Government Commerce.
the Evaluate Phase of CPIC prescribes that        supported government and commercial
                                                                                                   •	 The swirl logo™ is a Trade Mark of the
the project manager performs regular              projects for more than two decades. It
                                                                                                      Office of Government Commerce.
Operational Analysis (OA) to measure              supports continuous justification of the IT
                                                  investment by focusing on sustainment of         •	 PRINCE2 content, diagrams and logo’s
investment performance to predefined
                                                  the business case, driving results to the           are correct at time of going to press but
goals, and to determine, measure and
                                                  organization’s mission.                             may be subject to change without notice.
report on the return on investment.
Operational Analysis requires regular                                                              •	 PRINCE® is a Registered Trade Mark of
monitoring of achievement toward original          PRINCE2 is scalable to the enterprise, has no      the Office of Government Commerce in
business objectives. Performance goal              cost to use and supports US government             the United Kingdom and other countries
baselines are defined, thresholds set and          IT Investment Management controls.
                                                                                                   For Further Information:
measurements taken to improve service over
time while driving operational costs down.        The processes of PRINCE2 are scalable to         www.ogc.gov.uk
This continues until the asset is taken out of    suit various sized projects, ranging from        www.best-management-practice.com
service (retired) during the Disposition Phase.   only thousands of dollars to those that are      www.usergroup.org.uk
                                                  tens of millions in scope. Project team          www.apmgroup.co.uk
Management in Use involves post project
                                                  performance is governed through stage-
operations of the IT system. To enter this                                                         Our White Paper series should not be taken
                                                  gated project plans, measuring progress of
phase of the Capital Planning lifecycle, the                                                       as constituting advice of any sort and no
                                                  product delivery, not activities. Most
delivered IT solution must meet the defined                                                        liability is accepted for any loss resulting
                                                  important, PRINCE2 defines the roles of
requirements of PRINCE2’s Product                                                                  from use of or reliance on its content.
                                                  stakeholders, the project board and
Descriptions. The IT solution must also                                                            While every effort is made to ensure the
                                                  delivery teams. It establishes governance,
perform to the objectives of the business                                                          accuracy and reliability of the information,
                                                  process and controls to bring the
case. The PRINCE2 Managing Product                                                                 TSO cannot accept responsibility for errors,
                                                  investment from concept to fulfillment of
Delivery (MP) and Closing a Project (CP)                                                           omissions or inaccuracies.
                                                  the mission objectives, all the while
processes ensure that the project has met
                                                  improving the project management
its requirements and is ready to enter the                                                         Content, diagrams, logos and jackets are
                                                  practices of the agency.
final phases of the Capital Planning lifecycle.                                                    correct at time of going to press but may
                                                                                                   be subject to change without notice.

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Prince2 us fed_pro_sept09

  • 1. For Portfolio, Programme, Project, Risk and Service Management Using PRINCE2™ to Manage US Federal Government IT Projects Applying the PRINCE2 project management method to support Capital Planning and Investment Control (CPIC) Richard Tucker, PMP ICOR Partners, LLC White Paper September 2009
  • 2. 2 Using PRINCE2 to Manage US Federal Government IT Projects Abstract each agency to institute effective and efficient capital planning processes for This paper shows how the PRINCE2 project selecting, controlling, and evaluating their management method supports US Federal investments in IT projects. These projects government project managers as they represent the strategic investment in IT deliver IT investments while satisfying capital assets that define an agency’s Select Control requirements of the Clinger-Cohen Act and IT portfolio. Capital Planning and Investment Control. OMB requires each agency to institute Since enactment of the Clinger-Cohen Act effective capital planning. (CCA) in 1996, the US Federal government Evaluate requires its agencies to improve their The CCA references use of a three-phase management, oversight and control of cycle for capital asset management to investments in information technology. provide oversight of investment budgeting Central to the CCA is an obligation for and spending. First, by selecting IT capital agencies to select, control, and evaluate asset investments that will support core IT Investment Management Cycle their portfolio of IT projects in accordance mission functions performed by the Federal with the principles of Capital Planning and Government; Next, through controlling Investment Control (CPIC), an approach to The Control phase is an ongoing their projects effectively through the IT investment management referenced in investment management process designed application of best practices in project and the CCA. to monitor the progress of IT projects performance management; And then, by against budgeted cost, schedule, In the same year the CCA was signed into evaluating investment results through a performance goals, and expected mission effect, the UK government released demonstration that the return on benefits. The Control Phase helps to ensure PRINCE2™, a principles and themes based investment is supporting initial business that each investment is properly managed project management method designed to case objectives. CPIC links the strategic toward the intended objectives defined by provide direction and oversight of planning of mission attainment to the the investment’s business case. However, government/contractor projects. Project tactical performance of project delivery the Control process does not manage the managers can find it difficult to meet the and IT systems operations. The three investment project. The responsibility to requirements of CPIC while running a project. phases of CCA’s IT Investment define a project management governance Industry leading project management Management process are performed model is left to the agency and the project guides suggest one approach, contractors annually, and applied to IT investments manager. It is not defined by CPIC. have another, while investment oversight continuously, throughout the life of an groups within the agency reinforce the asset’s existence within the agency’s In the Evaluate phase, project outcomes additional requirements of CCA onto the IT portfolio. are measured, and systems are determined project team. to be fit for purpose. Performance results are assessed to: (1) identify needed Select, Control changes to products or systems to maintain Capital Planning and Evaluate optimal business operations; (2) measure the project’s effect on mission and strategic and Investment During the Select phase, the agency goals; and (3) continuously improve the agency’s investment management Control determines investment priorities according to their mission needs, and makes decisions processes based on lessons learned, self-assessments and benchmarking. The Information Technology Management about which technology initiatives (new Reform Act of 1996, commonly referred to and ongoing) they will fund for the next as the CCA, requires US Federal agencies to “identify and collect information fiscal year. The Select Phase determines which projects are to be included in the The Challenges regarding best practices” for managing IT related projects. The CCA identifies the agency’s IT portfolio for the coming year. Projects identified as significant to the of CPIC government’s approach to information mission (a major investment) must include Interpretation of the CCA and CPIC has technology investment management as a comprehensive business case that led to conflicting and competing solutions Capital Planning and Investment Control supports the IT portfolio selection process. to satisfy its many requirements. OMB (CPIC). Specifically, the CCA, through continues to amend their supporting oversight from the President’s Office of Circular A-11, which keeps agencies’ Management and Budget (OMB), requires reporting requirements a moving target.
  • 3. Using PRINCE2 to Manage US Federal Government IT Projects 3 Agency responses to these changes are when CPIC reporting is a pre-defined of CPIC while controlling and delivering the often seen as adjustments in the project output designed into the project method, project. You must use a method that defines management processes and tools used to CPIC becomes integral with the other daily how and when to apply project management control the investment. Such a response management and decision-making processes and techniques. The method weakens an agency’s ability to mature their activities of project management. must be scalable to the size of the project management practices. Instead, investment, and it must define governance, agencies should continue to develop and Additional challenges face government tools and techniques that can balance the mature their project methods and tools, project managers. The goals of CPIC are pulling forces that may exist between while adjusting reporting output to match focused on budget management, not government and contractor. PRINCE2 is a the OMB A-11 annual requirements. project management, which creates conflict de facto standard project management in tactical management objectives. IT method from the UK government. It is Practitioners often confuse the cyclical phases Investment Management support offices public domain, available for anyone to use of the CCA’s Select–Control–Evaluate as a within the agencies are tasked with collecting to manage a project, it can support the project management lifecycle, for example, and reporting financial information from many requirements of CCA and CPIC, and thinking that a project is in development the agency’s projects, while project it can be tailored to fit most any size project. activities only during the Control phase. managers focus on performance to cost This is inaccurate. The three phases of the and schedule milestones, earned value CPIC IT Investment Management lifecycle define the sequence of when budget and management, risk and issue status, and baseline change control logs. Too often, What is PRINCE2? investment management activities occur to the data and information that reports PRINCE2 is a structured project plan, monitor and report the progress of IT project status is gathered using tools and management method recommended for investment dollars. The “project” lifecycle techniques that are in contrast with the use on all projects commissioned by the UK of CPIC has a linear progression, from investment management reporting government. In 1989, the Central Computer Planning and Acquisition, to Management requirements of the CCA, CPIC and OMB. and Telecommunications Agency (CCTA) of In-Use and Disposition. It starts when a the UK government first established PRINCE business need is first defined and IT systems (PRojects IN Controlled Environments) for planning activities warrant a new project initiative, then continues to product Finding a Solution controlling information systems projects, but the method soon realized a greater acquisition/development, systems operation (production), and then asset retirement. In to CPIC following. The UK Office of Government Commerce (OGC), continued development response to this, agencies should define Project managers are searching for a of the method into what is now PRINCE2 and operate an enterprise lifecycle governance model that can support both (2009). Improvements include greater management framework that integrates the day-to-day needs of project delivery clarity of seven principles that guide governance, processes and information into and the requirements of CPIC investment behavior of the project team as they perform, a decision model that includes the management reporting. While the PMI’s streamlining of the processes defined requirements of investment and acquisition Guide to the Project Management Body within the method, and instruction on how management, enterprise architecture of Knowledge® is clear in identifying to tailor PRINCE2 to suit most any project’s planning, project management office tools and techniques for performing needs. PRINCE2 has gained wide acceptance (PMO), IT systems operations and project management activities, it is by its throughout Europe and Africa, and is maintenance, and capital asset control. own admission “a guide rather than a quickly gaining popularity in North America. methodology”, and it is not designed to CPIC defines the activities of budget address compliance requirements, such and investment management. as those defined by CCA. To operate a project in a way that will achieve the ™ Project managers react to the oversight needs of CPIC, project managers must and governance of CPIC as a set of tasks utilize a method that supports sustainment and requirements that are in addition to of an investment business case, clearly their effort to running the project. This has identifies a governance process, and lends led to frustration while project mangers itself to regular reviews for “Go/No-Go” work to deliver their projects. Project decisions, as required by US government IT managers sometimes view CPIC reporting investment management budget cycles. as a “check the box” activity. Maintaining compliance to CPIC reporting can take Satisfying the requirements and objectives considerable effort if it is not integrated to of CPIC is not easy. However, with the right the project governance approach. However, project management method the project manager can easily achieve the requirements
  • 4. 4 Using PRINCE2 to Manage US Federal Government IT Projects Subsequent Final Pre Project Initiation Delivery Delivery Stage Stage(s) Stage PRINCE2 Stage-Gates for Controlling Project Delivery © Crown copyright 2007. Reproduced under licence from OGC. Figure 4.2 The development path of the business case – Section 4 Principles of PRINCE2 team managers, suppliers, and change control authority is clearly identified Learn from Experience PRINCE2 is an experiential process. PRINCE2 is a scalable method that you throughout the PRINCE2 method. The Performing regular lessons learned reviews can apply to projects of varying sizes and activities necessary for sponsoring, is a key activity to success with PRINCE2. types. The seven principles of PRINCE2 are directing and managing the project are While a project is, by definition, a unique universal in nature, they are self-validating not left to chance. endeavor, the approach to running a due to the many thousands of projects that project is based on repeatable themes, have used the method, and they empower Manage by Stages processes, and reusable tools. When the project management practitioner by A PRINCE2 project is managed in stages, starting a project, the project manager providing a confident approach to directing providing control points throughout the leverages the experiences of past projects, a project. project lifecycle. The project manager including reuse of approaches, performance plans, controls and progresses the project data for benchmarking metrics and targets, Business Justification using a stage-gate approach. A high-level defining work plans, and estimating cost PRINCE2 projects perform continuous project plan is supported by detailed stage and schedule milestones. justification of the investment’s objectives. plans. Tranches that extend beyond the Project goals are tied to the requirements horizon remain at a high level until Tailored to fit, PRINCE2 can best serve within the business case to validate that near-term work is completed to a degree and support a project regardless of size, the project continues to serve the needs of certainty that improves likelihood of the type, organization or culture. Adapting the of the organization. This guides a project investment achieving its goals and objectives. PRINCE2 project management approach team through the decision-making process to the situation ensures alignment of throughout the life of the project, which Management by Exception processes, tools and techniques, to best keeps progress moving toward defined Deviations experienced during a PRINCE2 support and govern the project, while business objectives. Even compulsory project are managed by exception by avoiding success through heroics or forced projects driven by legislative mandate developing plans to identify variance from compliance to process. PRINCE2 can be require justification of the alternative baseline. Tolerances for cost, schedule, right-sized to the complexity and nature of selected. PRINCE2 provides a governance quality, scope, risk and benefit are delegated the project environment. model for guiding an organization toward to the project management team, providing an effective solution. an efficient use of resources to deliver with PRINCE2’s use of principles based fewer interruptions. Decisions are made at project management directs the decision the right level, while issues outside of making process. The continued business justification of tolerance are escalated only when necessary. high-risk UK Government projects is scrutinized by the OGC using a peer Product Focused review Gateway™ process that is aligned to the way PRINCE2 supports A project exists to produce output, not The PRINCE2 Stages to perform activities. PRINCE2 focuses on the development and management of the business case. defining and delivering only those products and Process Areas that are within the scope of the project PRINCE2 is a process-based method mandate (charter). PRINCE2 uses a product Roles and Responsibilities breakdown structure to clarify the purpose, designed to direct, manage and deliver a PRINCE2 defines the roles and project to plan. The project team performs composition, source, type, and quality responsibilities of all stakeholders at all across seven defined process areas to expectations of a final solution that will stages and processes of the method. perform the many activities for delivering fulfill the business case, defined to satisfy Participation from investment oversight the objectives of the business case. PRINCE2’s the organization’s mission. board members, executive sponsors, the seven processes integrate with one another project board (team), the project manager, by following a stage-gate lifecycle framework.
  • 5. Using PRINCE2 to Manage US Federal Government IT Projects 5 This provides cadence to project quality, and product configuration stage plan is completed. The SB process is management activities, directing results management are all supported by PRINCE2. again used to report and close the stage, toward pre-defined goals, and success. Techniques from other industry-popular and then subsequent Delivery Stages in project management guides easily integrate the project plan repeat the CS and MP In the Pre-project Stage, the investment’s with the processes of PRINCE2 to monitor processes to continue solution fulfillment. business objectives are determined by and control the investment. performing the activities in the Starting up The Final Delivery Stage completes a Project (SU) process. The business As the Initiation Stage completes, the activities from the CS and MP processes justifications for the investment are determined, Managing a Stage Boundary (SB) process during this last phase of the project. Then, scope is defined, and alternatives are calls for the project manager to plan the using the Closing a Project (CP) process, analyzed. Through performance of the SU next stage of the project. The project the project manager performs final product process, the business case is established, manager performs a business case review, acceptance testing, resolves or retires open readying the project team to obtain updates the project plan, and reports risks and issues, reviews the investment’s authority to proceed with the investment. status of the investment to the project performance to baseline, conducts a board. benefits realization review, and then In the Directing a Project (DP) process, recommends the project for closure to the the project is reviewed and approved by Subsequent Delivery Stages follow executive investment review board. an executive review board to place the the Controlling a Stage (CS) process. CS investment in the IT portfolio. DP processes provides guidance to the project manager manage the business case for the duration of the project lifecycle by providing senior- to authorize work to the project resources, monitor and report progress, manage risks Seven Themes of level oversight of the investment’s progress. and issues, then take corrective action on variances to the plan. The project board PRINCE2 The Initiation Stage continues the DP delegates day-to-day team activities and Project management provides little value process to provide regular oversight and ad decisions to progress the project on a unless it is performed with predefined hoc direction of project activities. Upon stage-by-stage basis. Activities of the CS intent. PRINCE2 identifies seven themes approval to proceed with the investment, the process assigns work to team members that are linked to project management. Initiating a Project (IP) process establishes a to ensure that they remain focused on Each of the seven themes in the PRINCE2 solid foundation for achieving project delivering the products and goals of the method remains in effect during the entire success through the identification of project project plan. The Managing Product (MP) project lifecycle. They are referenced objectives and business benefits. IP also Delivery process provides direction to the according to a predetermined workflow instructs the team to tailor project plans team members. As products are delivered, of the method to minimize risk, and to and invoke governance over project achievement to design specification is heighten the quality of team performance activities. Plans to control communications, assured; the business case is reviewed and results. scope, cost and schedule, risks and issues, for relevance to mission, and then the Subsequent Final Pre Project Initiation Delivery Delivery Stage Stage(s) Stage Directing DP SU SB SB CP Managing IP CS CS Delivering MP MP The PRINCE2 Stage-Gate Management Model © Crown copyright 2007. Reproduced under licence from OGC. Figure 11.1 The PRINCE2 Processes – Section 11
  • 6. 6 Using PRINCE2 to Manage US Federal Government IT Projects Business Case Quality Risk A project initiates with a need to drive The criteria under which project products Risk management is a key tenet of transformation through an organization are verified and accepted must be PRINCE2. It identifies, assesses, and to fulfill new or evolving mission established early in the project lifecycle. controls uncertainty that may affect project requirements. The business case defines PRINCE2 applies the tenets of quality outcome. Risk planning starts early in the why a project exists. PRINCE2 uses the management at the start, where they PRINCE2 method, where it is first used to business case to carry requirements are central to project delivery, making mitigate project threats while initiating the through to fulfillment, while maintaining the final product fit for purpose. This project. Where other project management the project team’s focus on objectives. supports achievement of desired benefits standards offer a model for managing risk, defined by the business case. A robust PRINCE2 defines the procedures, tools, and Organization quality management approach reduces techniques for performing the risk process. The PRINCE2 method defines roles and the likelihood of discovering product responsibilities at multiple levels for performance issues when it is too late. Change directing, managing and delivering a Since change is inevitable for almost any project. A PRINCE2 project’s organization Plans project, controlling variance to plan must structure includes the executive oversight, A plan is not just a schedule, but also a be included in the management approach project board, program sponsorship, senior holistic approach to governance. PRINCE2 for maintaining the project baseline. users, suppliers, team managers, support projects follow defined and approved PRINCE2 identifies an approach to change staff, and project assurance personnel. plans that integrate requirements, cost, control that addresses issues that enter Projects must often share resources with schedule, quality, risk, roles, resources, the project plan. PRINCE2 integrates other parts of an organization. Clear and communications. Performance to plan change control of the project lifecycle identification of the extended project is measured in each stage of the project. phase to configuration management of the team reduces confusion and minimizes Exception Plans define deviation from operations and maintenance phase. conflicting demands on staff as they serve baseline, which are integrated into the multiple requirements across the business. master plan to steer performance back Progress toward cost, schedule and quality goals. The PRINCE2 method establishes mechanisms to monitor, compare, review, and report actual performance to baseline objectives. Risks are mitigated, while Business quality issues and problems are addressed and corrected. Upon successful completion Case of scheduled goals, the next stage plan is authorized, progressing the project toward completion. Numerous reporting templates are defined by PRINCE2, that include Progress Organization definitions of each report’s contents and use, all supported by the various processes within the method. PRINCE2 The Capital Change Processes Quality Planning Lifecycle of CPIC So, let’s go back. The Clinger-Cohen Act directs agencies to manage their IT budgets by measuring the return on investment Risk Plans using a Select-Control-Evaluate process. CCA also directs OMB to perform oversight of agency IT spending. In response to CCA, OMB recommends that agencies apply planning, acquisition, management, and disposition lifecycle controls to their major The PRINCE2 Themes Support Performance
  • 7. Using PRINCE2 to Manage US Federal Government IT Projects 7 Integrated Project Team Business Planning Management IT System Acquisition Disposition Requirement & Budgeting In-use Retirement IT Investment Management Cycle Select Control Evaluate The Capital Planning Lifecycle IT projects. Simply put, each agency must assurance and control, and other project proposed budget to OMB during the Select have a defined plan for buying, building, management techniques. However, these phase. Approved through the President’s operating and retiring their IT assets, and are only broad brushstrokes of guidance for budget, the initiative receives funding from they are accountable to report project the project manager. The CPG does not Congress to become a sanctioned project status timely and accurately. define a project management method that ready for acquisition. must exist beneath these phases. So then, OMB annually releases Circular A-11, how can project managers lead their Quality and risk management are central to a budget management directive that projects toward success while meeting the PRINCE2, initiated during the Starting up a requires agencies to report their annual requirements of CPIC? Project and the Directing a Project IT budget (using the Exhibit 53 form) and processes of the Pre-project stage. The report progress toward goals within the Planning and Budgeting PRINCE2 method supports the CPIC business case of each major IT project The CPG’s objectives of the Planning and Planning and Budgeting phase through (using the Exhibit 300 form). However, Budgeting phase are designed to support IT development of the project business case. A-11 does not define, nor prescribe, investment decision-making. Alignment of The project manager justifies the business a project management method or strategic planning to project performance case to ensure that the investment is approach for tactically controlling and goals is determined by utilizing an agency- planning to build the right product, is delivering the project. Circular A-11 is level enterprise architecture plan. An fulfilling the right business need, and that the only a process for reporting status of the Integrated Project Team (IPT) is established final products will serve the organization’s budgeted and funded investments. to manage the project. The IPT formulates mission. Once the business case is reviewed a clear definition of system functional and accepted by the investment board, the OMB provides agencies additional project is authorized to proceed to the requirements, performs an analysis of direction in their A-11, Part 7 Supplement: Initiation Stage. alternatives to select the best technology Capital Programming Guide (CPG). The solution, and establishes operating and objective of the CPG is to show agencies reporting baselines. They must apply PRINCE2 keeps a focus on the business how project management activities relate risk management techniques to reduce case to maintain IT business value. to IT investment management. It helps to the chance for incurring costs associated answer the question, “Will this with delivery failure, and integrate earned CPIC’s requirement for EVM necessitates investment drive transformation of the value management (EVM) into the a “deliverables-based” work breakdown business toward the agency’s mission?” contract acquisition strategies. The agency structure to define project scope. During The CPG defines a Capital Planning implements an executive review process the PRINCE2 Initiation stage, the product Lifecycle: a four-phased approach to IT to oversee investment performance and breakdown structure becomes the investment management. The lifecycle adjust the investment as the needs of the framework for managing solution delivery. identifies strategies to achieve greater mission change over time. Activities of the PRINCE2 Directing a service delivery and move program effectiveness toward mission goals. The Project process establish oversight and Upon completion of a comprehensive governance to lead investment plans CPG recommends use of risk management, planning effort to define an integrated earned value management, quality toward mission goals. project plan, the agency presents its
  • 8. 8 Using PRINCE2 to Manage US Federal Government IT Projects PRINCE2 Stage-Gate Project Management Subsequent Final Pre Project Initiation Delivery Delivery Stage Stage(s) Stage Integrated Project Team Planning Management Disposition Acquisition & Budgeting In-use IT Investment Management Cycle Select Control Evaluate PRINCE2 Project Management for CPIC Acquisition and actual results of both government decision. The ERC recommends corrective In the Acquisition phase of the Capital and contractor resources applied toward action plans where necessary to keep Planning Lifecycle, the project team development activities. Once the integrated the project moving toward its strategic validates decisions and objectives from the project plan is approved by the ERC, a and mission goals. Solution acceptance Planning and Budgeting phase. The team baseline is recorded as the project plan. activities of the Acquisition phase include re-examines the mission needs to affirm a complete review of delivered products The Control phase of CPIC is used to measure to affirm that they meet all requirements investment justifications in the business and improve investment performance. It and objectives defined by the business case to determine a “build versus buy” instructs project managers to perform case. Product quality reviews, system acquisition strategy. The IPT addresses regular monitoring of product development testing, and recording IT assets into a acquisition risks, and then the project is progress, cost, schedule and performance configuration management baseline also initiated. Teams are established, contract variance, review of scope within the work happen. Any product deviations discovered support secured, and then development breakdown structure, and assessment of during solution acceptance are addressed activities of the Acquisition phase commence. risk to the investment. Change control must through rework or an accepted variance to An Executive Review Committee (ERC) be applied to maintain progress toward plan. Additionally, contract performance assesses the project team’s plan for contractual scope. Investment control and requirements are assessed to determine the solution delivery. Following a successful oversight is in the hands of the project contractor’s success to the cost, schedule procurement, the IPT operates project manager during the Control phase. Periodic and performance goals of the contract. governance that integrates scope, cost, status reports are brought to the ERC. schedule and quality into a comprehensive PRINCE2 uses a stage-gated approach to As part of the CPIC Evaluate Phase, the project management approach. EVM controlling project progress. IPT and ERC conduct reviews of project is used to monitor and control planned progress to reaffirm the acquisition
  • 9. Using PRINCE2 to Manage US Federal Government IT Projects 9 The PRINCE2 Controlling a Stage process In Summary continues to provide justification of Acquisition phase activities performed Since introduction of the Clinger-Cohen Author during Subsequent Delivery Stages. The Act in 1996, agency CIOs and project Richard Tucker is a management PRINCE2 processes provide oversight of managers across the US Federal consultant with more than 20 years of product development activities, guiding government have been working to improve experience in IT project management the project team as they fulfill business their IT investment management practices. and Federal capital investment case requirements. The project manager The OMB A-11, Part 7 Supplement: Capital management. He provides practical conducts a review of the investment’s Programming Guide provides project knowledge and advice to US Federal status to the detailed business case. Impact managers guidance on the four phases of agencies and departments. He is a assessments are performed on any new the Capital Planning Lifecycle, while certified PRINCE2 Practitioner and or existing risks and issues. The project oversight performed using Capital Planning a Project Management Professional manager assesses progress towards cost, and Investment Control monitors the value (PMP). He is an active member of the time, quality and benefit goals. Exception returned from the dollars invested in IT Federal CPIC Forum and contributor to plans are introduced to address and correct assets. However, without a project delivery numerous online communities where variances to baselines. The project manager method that supports the control and he shares his interest and experiences in reviews completed work packages against reporting requirements of CCA and CPIC, project management methodology and defined specifications. Configuration teams continue to struggle to operate tools implementation. records and stage plans are updated upon projects that exhibit best practices that Richard Tucker, PMP acceptance. Then, following the Managing produce the right measures required by OMB. Certified PRINCE2 Practitioner a Stage Boundary process at the end of Best practices defined in commercially ICOR Partners, LLC each Delivery Stage, the Project Board driven project management guides fail to www.icorpartners.com authorizes continuation to the next stage provide an approach that connects project plan for the project. management methods to the IT portfolio results defined by CPIC business cases. Trademarks and Management In Use Acknowledgements and Disposition In contrast PRINCE2 is a scalable and proven • PRINCE2™ is a Trade Mark of the Office Once the IT system goes into production, project management method, having of Government Commerce. the Evaluate Phase of CPIC prescribes that supported government and commercial • The swirl logo™ is a Trade Mark of the the project manager performs regular projects for more than two decades. It Office of Government Commerce. Operational Analysis (OA) to measure supports continuous justification of the IT investment by focusing on sustainment of • PRINCE2 content, diagrams and logo’s investment performance to predefined the business case, driving results to the are correct at time of going to press but goals, and to determine, measure and organization’s mission. may be subject to change without notice. report on the return on investment. Operational Analysis requires regular • PRINCE® is a Registered Trade Mark of monitoring of achievement toward original PRINCE2 is scalable to the enterprise, has no the Office of Government Commerce in business objectives. Performance goal cost to use and supports US government the United Kingdom and other countries baselines are defined, thresholds set and IT Investment Management controls. For Further Information: measurements taken to improve service over time while driving operational costs down. The processes of PRINCE2 are scalable to www.ogc.gov.uk This continues until the asset is taken out of suit various sized projects, ranging from www.best-management-practice.com service (retired) during the Disposition Phase. only thousands of dollars to those that are www.usergroup.org.uk tens of millions in scope. Project team www.apmgroup.co.uk Management in Use involves post project performance is governed through stage- operations of the IT system. To enter this Our White Paper series should not be taken gated project plans, measuring progress of phase of the Capital Planning lifecycle, the as constituting advice of any sort and no product delivery, not activities. Most delivered IT solution must meet the defined liability is accepted for any loss resulting important, PRINCE2 defines the roles of requirements of PRINCE2’s Product from use of or reliance on its content. stakeholders, the project board and Descriptions. The IT solution must also While every effort is made to ensure the delivery teams. It establishes governance, perform to the objectives of the business accuracy and reliability of the information, process and controls to bring the case. The PRINCE2 Managing Product TSO cannot accept responsibility for errors, investment from concept to fulfillment of Delivery (MP) and Closing a Project (CP) omissions or inaccuracies. the mission objectives, all the while processes ensure that the project has met improving the project management its requirements and is ready to enter the Content, diagrams, logos and jackets are practices of the agency. final phases of the Capital Planning lifecycle. correct at time of going to press but may be subject to change without notice.