Manage by stages principle
PRINCE2 is a principles-based project management method. There are 7 principles which form the foundation stones of the method. Everything in PRINCE2 is based upon one of these 7 principles.
One of the principles is known as the ‘manage by stages’ principle. If you are not applying this principle on your project, it means your project is not a PRINCE2 project.
So, what is the rationale behind this principle? Let us explain.
A PRINCE2 stage is also known as a management stage. Management stages are a way of breaking down a project into smaller, more manageable chunks. The minimum number of stages on a project is 2.
The first PRINCE2 project stage has a special name. It is the initiation stage. It occurs right at the start of the project. As its name implies, it is where the project gets initiated.
Initiation is where the project manager develops a project plan and detailed business case justifying the investment in the project. During initiation the project manager also prepares strategies for managing quality, risk, change, communication, and benefits. All this documentation is brought together into one collection known as the project initiation documentation (PID).
Planning the next stage
The project manager also prepares a more detailed plan for the next management stage. This shows all the work for the next PRINCE2 project stage, the timescales and costs, the outputs, and required resources. This is known as the next stage plan.
The project’s main decision-makers (the project board) then uses the PID and the next stage plan to decide whether to proceed to the next management stage. If the project board decides the project is worth the costs, timescales, and risks, then they can approve the PID and next stage plan and commit the resources necessary to implement the next stage.
Something similar occurs at the end of every subsequent management stage, except for the final stage. When the final management stage is reached, this is where the project will close, and so there is no need to create another stage plan because there will be no more stages.
When taking this decision, if the project is not worthwhile, the project board will stop the project. There will be no more work done except to close the project and salvage anything of value from the work done so far.
The diagram above shows the breakdown of a project into multiple PRINCE2 project stages (the red vertical lines). There is one high-level project plan covering the whole project, and more detailed stage plans – one for each stage.
The end of each PRINCE 2 stage is thus a decision gate. The project board decides either to approve the next stage and commit resources to implement it, or it decides to close the project and save the organisation the time, money and resources that was originally planned for the project.
Thus, PRINCE2 project stages are a less risky approach to taking investment decisions than one big decision taken at the start of the project. In PRINCE2, decisions to ‘go or not go’ are taken at the end of all PRINCE 2 stages.