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Introduction to Themes

9. Theme No 4 Plans

A plan is a detailed proposal for doing or achieving something that specifies the what, why, and how it will be accomplished, as well as by whom it will be accomplished. In Princeton, there are only the following types of plans: project plan, stage plan, team plan, and exception. Plans provide the backbone of the management information required for any project. Without a plan, there can be no control. Many people believe that a plan is simply a chart with timescales. Prince 2 takes a more comprehensive and flexible approach to planning.

A principal plan must describe not only the time scales but also what will be delivered, how, and by whom. Permanent-plan projects cause frustration, waste, and rework; it is therefore essential to allocate sufficient time for planning to take place. A plan enables the project team to understand what products need to be delivered and the risks—both opportunities and threats. There are issues with the definition of scope, how many people, specialised equipment, and resources are required when activities and events take place, and whether time, cost, quality, scope, benefits, and risk targets are available. A plan provides a baseline against which progress can be measured and is the basis for securing support for the project, agreeing on the scope, and gaining commitment to provide the required resources. In the early days of project management, the belief was that a project could be planned in detail right from the very start.

So a scope statement would be written in detail, and then it would be set in stone. And the project manager, whether Maidensfer or Foul, would directly deliver the scope as close to the original deadline as was humanly possible or as close as was inhumanly possible. because project managers were seen as monsters who bullied people and didn't listen to the client. But the problem with that approach was that projects tend to be a learning experience for all concerned, especially the customer. And the customer would watch on in dismay as a product that they had indeed described and even signed off on gradually took shape but was not at all what they actually wanted. But the only reason they skipped it in detail at the start of the project and signed off on it was because they were effectively bullied into it. But not only is a project a learning experience, but in many ways it is like a research project. It is only as the product develops that the customer begins to realise what they want. That is why Prince 2 breaks a project into stages, and then you can work within your planning horizon, which means you work only as far as you can see ahead.

Clearly, this is efficient because if you try to plan beyond your planning horizon, you will simply have to redo the work later. In addition to detailed plans for each stage print, Two necessitates high-level plans to keep you on track. Both the high-level plan and the detail plan need to be maintained in parallel. On page 95 of the Principal Guide, the Two Levels of Planning a Project Plan for the Project as a Whole This will usually be a high-level plan, providing indicative time skills, milestones, and cost and resource requirements based on estimates. A detailed plan for the current management stage that is aligned with the overall project plan time skills; this plan is created before the stage begins and must not extend beyond the planning horizon. principally uses product-based planning. As you can see from the principle "Focus on Products," the products are identified and described before the activities and resources to produce them have been defined as usual. The generic nature of principles means that they are not prescriptive when it comes to specific details of reports. However, chapter Nine Three of the Principal Guide provides guidance for effective planning, and chapter Nine Four suggests techniques for prioritization, estimation, and scheduling.

Figure Nine depicts how Prince2 plans interact with one another. Appendix A Prince 2 guide is where you will find a single product for all plans. The initiation stage plan is shown on its own because it exists before the project plan is created. In fact, it's created before we even know whether or not we're going to initiate a project. Then, once the project has been initiated, you can see a clear hierarchy. The subsequent stage plans are derived from the project plan, then the team plans are derived from the stage plans. If the stage is forecast to exceed the stage tolerances, then a project manager will be required to produce an exception plan, which in most cases is a revised stage plan. But in extreme circumstances, the project manager may be asked to develop an exception plan for the entire project project. Please take time to study Chapter 9 because it has many examples of reports and techniques that you may be able to use in your own projects and that may well appear in the exam.

10. Theme No 5 Risk Part 1

But first, we must answer the question: What is a risk? The Prince 2 guide defines risk as an uncertain event or set of events that, should they occur, will have an effect on the achievement of objectives. A risk is measured by a combination of the probability of a perceived threat or opportunity occurring and the magnitude of its impact on objectives. Business as usual is routine and relatively predictable. There are risks, of course, in everyday work. But because of the regularity of process work, many of the risks have been foreseen or encountered before, and so there are already management strategies in place for most things that can happen. Projects, on the other hand, usually involve an organisation taking on familiar tasks with staff performing unfamiliar duties. And so there's a distinct element of uncertainty. It is unacceptable to simply wait for risks to occur as if everything is beyond our control. Consider an everyday situation as an example. On an overcast day, there is a risk of rain, but you really want to go for a walk. You could simply go outside and accept the risk of getting wet. Or you could take an umbrella to reduce the likelihood of getting wet. And even if it's not 100% effective, especially on a windy day, it will reduce the impact of the rain on you. If you don't want to carry an umbrella, you could plan a route where there are many places where you can shelter from time to time. Or you may just avoid the risk completely by staying indoors. When people in an organisation talk about risk, almost always they are referring to negative risks or threats that they are attempting to avoid. As a result, it may appear that they are unaware of positive risks. The truth is that they are aware; it's just that they call them opportunities instead. I think it is because almost everyone thinks of disasters when they hear the word "risk." So therefore, if it's positive, they have to have another word for it. In this video, when I mention "risk," I mean "threats." Unless I tell you otherwise, The next question to answer is: what is at risk? But now you should be able to remember the six variables on any project they are. That's correct. It would be really nice if there were seven because there are seven principles, seven themes, and seven processes. But we just have six. So we have six to work with. And just in case you can't remember what they are but you should, they are cost, time, quality, scope, benefits, and risk. And so any project objectives related to these are at risk. Now we need to think about what we are going to do to manage risk on the project. And once again, we look to the principal guide for a definition of risk management. It is the systematic application of principles, approaches, and processes to the task of identifying and assessing risks, planning and implementing risk responses, and communicating risk management activities for stakeholders.

As we see, this is mainly a four-step process. One is to identify the risks. This means trying to think of all the things that could go wrong to assess the risks. Now that you know what could go wrong, you should try to estimate how likely they are to occur, the impact on achieving objectives, and how much damage they will cause if they do occur. Number three is to plan risk responses, which means deciding what you're going to do to reduce the likelihood that the risks will occur or reduce the impact if they do happen. Four implement risk responses. And please note that this is not a one-off activity. You need to repeat these cycles a number of times throughout your project and throughout the process. You need to make sure your stakeholders are kept informed about the risks and issues. It's important to remember that while you can do a lot to reduce the risks on your project and the impact, you can never completely eliminate them.

Prince 2's Requirements for Risk Management As usual, we need to know what Prince 2 expects as a minimum from a risk management system. It's on Page 121, in Section 10.2. To be followed by Prince 2, a project must, at a minimum, define its risk management approach, which must cover how risks are identified and assessed, how risk management responses are planned and implemented, and how the management of risk is communicated throughout the project lifecycle. Assessing whether identified risks might have a material impact on the business justification of the project, which is Princeton's continued business justification principle, Roles and responsibilities for risk management principals Defined Roles and Responsibilities Principles dictate that they intend some form of risk register to record identified risks and decisions relating to their analysis, management, and review. Ensure that project risks are identified, assessed, managed, and reviewed throughout the project lifecycle.

Use lessons to help you identify and manage risks. Princeton's "learned from experience" principle states that two products must be produced and maintained. The risk management approach describes how risk will be managed on the project. This includes the specific processes, procedures, techniques, standards, and responsibilities to be applied. The risk register, which provides a record of identified risks related to the project, including their status and history, is useful to capture and maintain information on all the identified threats and opportunities related to the project. Both of these products should be created during the process of initiating a project process. The risk management approach should be reviewed and possibly updated at the end of each management stage. The risk management approach will define how and when the risk register is reviewed and updated. Appendix A, sections 824 and 825, provides product descriptions and suggested content for these products. Print Two recommends an approach to risk management based on the management of risk. Guidance for practitioners Office of Government Commerce, 2010. But please note that while it's important to read the book, You should also understand that this book is not required for the exam. Everything that you need to know for the exam and risk management is contained in the principle guide and on the scores.

11. Theme No 5 Risk Part 2

You will need to know these for the exam. As you may recall, when we studied the theme "three qualities," I said that a project is a temporary organisation within the main organization, and you will need to adopt the overarching quality management system of the main organization. In the case of a project, there may be a quality management system, especially for programme management, in which case your project will work within that.

In a similar way, your project will need to adopt the overarching risk management system of the organization. Or in the case of a project, there may be a risk management system specifically for programme management, in which case your project will work within that. In a previous video, Risk Management Part One, we saw that before identifying risks, you need to define the project's risk management approach, which must at least cover how risks are identified and assessed, how risk management responses are planned and implemented, and how the management of risk is communicated throughout the project lifecycle.

Assessing whether identified risks might have a material impact on the business justification of the project Prince 2's continued business justifies the principles, roles, and responsibilities for risk management. Prince Two are defined as roles and responsibilities. Principle 2, page 121, you will also need to understand the organization's attitude toward risk, i.e., how much risk are they willing to bear? This is often called the "risk appetite." It's important to know this because one organisation may consider the risk of losing $1 million as acceptable, while a smaller organisation may view losing $10 million as a disaster.

This information should be added to the risk management approach. Then we come to the risk budget. It might be appropriate to identify and set aside an explicit risk budget within the project's budget. This is a sum of money to fund specific management responses to the project's threats and opportunities, i.e., to cover the cost of any contingency plans should a risk materialize. Doing this can prevent the risk manager from becoming a runner at Ram. But please note that the risk budget is a reserved portion of the main project budget and not a separate stash of cash outside it. As I mentioned in the last video, if your organisation, programme, or customer has a risk management procedure, then you need to use that. You can use your own or use a risk management procedure that is based on the management of risk. Before we begin the risk management procedure, we must first identify the project context, which may include customer quality expectations, the number of organisations involved in the relationship between them, the needs of the stakeholders involved in the project, and, most importantly, the complexity and scale of the project.

The delivery approach being used, what assumptions have been made about the organization's own environment, e.g., Legislative or government requirements; corporate policies, standard processes, and procedures; or whether the project is part of a programme or corporate portfolio Step one is to identify the risks. Risks can and should be identified by anyone at any time during the project, but in this exercise, a number of stakeholders will get together in some form of brainstorming meeting before the project begins. This has the added benefit that it may be one of the few times when you have a number of key stakeholders together at one time, which can lead to improvements in the overall project. As you identify each risk, you will need to immediately record the details in the risk register.

Typically, you will record the "risk calls," which are situations or events that may trigger a risk. For example, team members working outdoors in high temperatures might be a risk event. This is the possibility that AG team members will suffer from dehydration or heat stroke. The risk effect is the impact on project objectives that could occur if the risk occurs, such as project delays and medical treatment costs. However, as mentioned, Princeton is not prescriptive, and so you may recall this in a different way, such as by writing it in a single sentence. It's been my experience, however, that when people record risk details in a single sentence, it simply becomes confusing.

Step Two: Part one is to assess the probability of the risk of carrying and the likely impact if it does occur. Most organisations employ a probability metric to chart the products of likelihood versus impact, similar to figure 10-3 on page one to figure 10-3 on page two. However, the usual colours are green for low, orange for medium, and red for high, rather than three shades of one color. But I think that's just to fit in with the colour scheme of the principal guide. You can use it as a three by three matrix, a four by four matrix, a five by five matrix, or whatever size suits the particular risks you're working with.

Step Two: Part two is to evaluate the risk exposure, which is the combined effect of all the risks, to make sure that the project is still within the organization's risk appetite. And if not, it's back to the drawing board so that you can maintain the principle of continued business justification. Note that risk appetite and risk exposure are different. Risk appetite is the amount of risk that your organisation is willing to accept, whereas risk exposure is the amount of risk that the project requires them to accept. By providing a definition of risk tolerance, you may be able to persuade someone to take a little more risk. Risk tolerance is the ability to tolerate levels of risk exposure that can be exceeded but, if exceeded, will result in some type of response, such as reporting the situation to senior management for action.

12. Theme No 5 Risk Part 3

Risk responses are the part of risk management that most people get wrong. And I believe that is because they rely on the everyday meanings of the words, or maybe words from the background, etc. But by now you know that Prince 2 has a special meaning for many words and phrases.

If you're familiar with the Pinball, a guide to the Project Management Board of Knowledge by PMI, then much of this will be familiar to you. But beware—there are some important differences between pinball and prints too. I have identified and assessed the risks. I've entered them into the risk log. So now I need to do something about them. Note that so far, really what we've been talking about are the threats or pure risks, the negative side of the risks, and the treatment options you can choose from or avoid. Note that 90% of our students get this one wrong. In the Pinbock guide, this treatment is the same. Avoid means removing the risk completely, usually by taking away the cause of the threat. This is usually achieved by removing part of the scope. Very important. If you apply this treatment and it still occurs, you have not avoided it. It has to be zero percent.

For example, your project is to build three explosive manufacturing plants in the United States. Location One and Location Two have been assessed as very safe locations. Location Three, however, is to be built in California, which is the unofficial earthquake capital of the US. No matter how you plan, the risk of an explosion remains high. So you avoid the risk by deciding not to build a plant in California. And therefore, with no plant, you have zero risk. The next treatment type is reduction. This means doing something to reduce the probability and/or impact of the risk. For example, the explosive that you're manufacturing will explode. If not, you can reduce the probability by having efficient air conditioning. And you can reduce the impact by having many small machines producing small amounts of explosives rather than one large machine producing large quantities. The next step is to prepare contingency plans.

This means preparing a plan to use in the event that a risk occurs but not taking any action until it does. According to the Pinball Guide, mitigating treatment is a combination of reducing and planning for contingencies. The risk transfer comes next. This is one that 60% of my students get wrong. That means attempting to give the risk to someone else. The most usual methods are outsourcing and insurance. The reason I said "attempt" is that, say, for example, you're building an office as part of a project and the office is destroyed by fire. The insurance company will hopefully pay for the damage. But now you have to rebuild the office, and that could hold up your project. The trick to transferring is that the entity you transfer to must be outside the commissioning organization.

Where my students usually get it wrong is when they say our team does not have the necessary skills for a major task. So we will transfer this risk to a more experienced team, or we can transfer this risk by employing an expert. Both of these are wrong because an organisation is responsible for the work of all of its employees, so they still own these risks. The only way to transfer risk is to completely remove it from your organization. Next is sharing. The risk does not appear in the pinball guide except for opportunities, but it is where multiple parties share the risk. And lastly, we have accepted risk. This is also true of the Pinball Guide. 90% of our students get this one wrong. Basically, when accepting the risk, you simply acknowledge that it can happen and record in a risk register that you're not going to take any further action until it does.

Please note that you don't try to make up any other actions at the time, because it means that you're actually taking a reduced strategy. And you can't make plans if the risk occurs because you'd be reusing a prepared contingent plan strategy. You simply record it, leave it, and walk away, and if the risk does happen, then and only then will you create a plan, which is usually called a workaround plan. A workaround plan can't be made up in advance. Please review Table 10: Three Risk Responses on Page 123 of the Pins Two Guide, and you will see how the treatments are applied to opportunities in a very similar manner. But please remember to use the right amount of treatment—which is proportional to the risk and the amount at stake—so that you get value for your money. There's no point in spending $1,000 on a treatment that will only save you $10 if the risk occurs. And as mentioned earlier, you can never avoid all risks on a project. For example, occasionally one of my students will suggest we can avoid all risks in the project by outsourcing the whole thing. Firstly, this is a chance for treatment, not one to avoid.

And secondly, if you could outsource the whole project, it would cost a lot more than doing it yourself, unless you've got your business case totally wrong. It is critical to ensure that the owner and executor are identified and agreed upon. Trisk risk Owner: a named individual who is responsible for the management, monitoring, and control of all aspects of a particular risk assigned to them, including the implementation of the selected responses to address the threats or maximise the opportunities.

Risk Action A person assigned to carry out a risk response action or to serve as a bridge for back-and-forth communication should be constantly engaged. The communication step ensures that information related to the threats and opportunities faced by the project is communicated both within the project and externally to stakeholders. Risks are communicated as part of the following management products: checkpoint reports, highlight reports, end-stage reports, project reports, and exceptional reports. And please revise these reports to find out what they are and when they're used.

13. Theme No 6 Change Part 1

Any potential and approved changes to the project Baselines for projects always change. They are a learning experience, so there is a planning horizon to consider, i.e., you can see only so far ahead. However, as shown in Table 11-1 and on Page 138, there may be other reasons for changes. Look at what Prince 2 calls "changes and issues," which is confusing at times. As it says in the principal manual, Prince Two uses the term "issue" to denote any relevant event that has occurred that was not planned and requires management action. Issues could also be raised at any time during the project by anyone with an interest in the project or site camps. Tipple eleven One identifies three types of issues. request for change Offspecification "Off specification" refers to something that was supposed to be delivered but was not, or was delivered but did not meet specification.

For example, the scope might have specified brass fittings, but the fittings provided are just brass-plated arm problem or concern. This is anything that requires action from the project manager. Once the issues have been identified and recorded, you will then need to follow a common systematic approach for Disneyworthy. Issue and change control is an activity that is performed throughout the project. Without it, the project will not deliver the benefits. When a change is to be made, it always needs to be considered against the baseline, which is like a snapshot of the current state of all management and specialist products.

The paint, the project briefing, the business case, and all sorts of ways of controlling changes to the baseline products But if a name is given to the process of preventing unauthorised change, Prince 2 calls these things that need to be controlled and baselined. Configuration item records contain information about the states and statuses of configuration items. See Appendix A, Section Eighteen, for an outline description. All the configuration item record definitions configuration item Record a record that describes the status, version, and variant of a configuration item and any details of important relationships between them. Page two of the guide, on page 139, is the next definition, which is very important. Many exam questions have stated that it will change control and obtain a project baseline. Project Status Account: a report on the status of products The required products can be specified by an identifier or the part of a project in which they were developed.

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