It has been said that small businesses (SMEs) are the “engine-room of innovation” but is this true? SME’s are certainly critical to the UK economy; there are 5.7m SMEs in the UK employing over 16m people.
So which business practices benefit from innovation? Product creation? Identifying new markets? Absolutely. Project management? Yes. In recent years, software vendors have identified SMEs as a target sector for project management tools so there is an abundance of choice.
Tools are great, powerful, giving everyone a clear view of progress. Without an underpinning methodology, however, tools are just tools. It’s fine when everyone in the team knows their responsibilities and how the project is supposed to run. If they don’t and there’s a project that needs to be kicked off, it’s a problem. There isn’t time to evolve a methodology.
What’s needed then, for small businesses particularly, is a road-tested project management methodology like PRINCE2. One that has been developed and trialled and used on millions of successful projects. One that has training and certification, so project managers can learn the best practices. One that enables team members to understand their responsibilities.
Here we take a look at some of the methodologies and what differentiates them, including a more detailed look at PRINCE2.
Types of project management
Project management has evolved from the traditional “waterfall” method, where the project proceeds in sequential stages, to the more common “agile” method using multiple iterative “sprints”. An ideal methodology would allow the use of either a sequential method or an agile method.
PRINCE2 is the most widely followed methodology. It is highly scalable, supporting everything from short simple projects to complex construction projects. For agile projects, the PRINCE2 Agile Foundation and Practitioner certifications are available.
Agile (or SCRUM) methodology is widely used in software development. Projects are able to adapt to changes in requirements and development proceeds in a series of sprints. Adopting agile can be a challenge as it requires a commitment at all levels of the business.
Critical path is a limited methodology, useful for simple projects with interdependent tasks. The project is analysed into a set of tasks with dependencies, milestones and deliverables.
Six Sigma is an analytical methodology, focused on reducing product failure levels and therefore overall waste. The methodology works by measuring the number of defects in a process and then establishing how to eliminate them.
What is PRINCE2?
The acronym stands for Projects IN Controlled Environments. PRINCE2 was launched in the UK in 1996, initially for Government Information Systems projects. It was privatised in 2013 and revised in 2017 to reflect how business practice has evolved. It is now used for public and private sector projects around the world.
PRINCE2 is underpinned by a set of seven principles:
- Continued Business Justification – supported by a business case document
- Learn from Prior Experience – using a lessons log
- Clearly define Roles and Responsibilities
- Manage in Stages – project documents – such as the business case – are updated when moving stages
- Manage by Exception – project objectives are set, and when an exception is forecasted, the issue is escalated
- Focus on the Products – especially quality, definition and delivery
- Tailor to your environment – based on the project’s size, complexity and risk
PRINCE2 relates these principles to seven themes, resulting in up to 26 defined management products.
Tolerances and Processes
A PRINCE2 project is characterised by KPIs, called tolerances. These are used in defining and assessing a project’s progress and success:
- Timescale (for the project and its stages)
- Benefits to the business
- Cost to the business
Seven processes are used to manage the project’s progress through stages:
- Starting up, Initiating, Directing and Closing a project
- Controlling a stage
- Managing product delivery
- Managing stage boundaries
Roles & Responsibilities
PRINCE2 describes roles and responsibilities at four levels of the business. This helps team members to understand where they fit and assists in securing buy-in from senior management.
The four levels are:
- Corporate – the project’s sponsors define its goals and tolerances. This gives senior management a stake in the project and an understanding of its cost and value
- Project board – this will include representatives with authority to make decisions for the project.
- Project manager – to run the project and report to the upper levels
- Team – the people involved in delivering the project
Stakeholders are also essential to the project and contribute by giving advice to the team and the board. Stakeholders may be end users, business investors  or anyone nominated as having a stake in the success of the project.
Small businesses need to innovate in ways that are “fast, agile and lean”. This means defining and delivering projects using a road-tested methodology. PRINCE2 is the most widely used methodology and has a track record of delivering successful projects.