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Real World PRINCE2 Product based planning 

 February 27, 2023

By  Dave Litten

Real World PRINCE2 Product based planning

Product-Based Planning in PRINCE2

In case this sounds like PRINCE2 is not in the real world when it comes to product-based planning — then think again. This article aims to give you some ideas and approaches to using this potent PRINCE2 technique.

It is helpful first to consider where product-based planning is used in a PRINCE2 project. There are three levels of plan and four types of plan possible within a PRINCE2 project. These are:

 – The Project Plan (mandatory) 

 – The Stage Plan (usually used) 

 – The Team Plan (optional)

The exception plan is only needed if the project plan or stage plans cause the project manager to forecast that the tolerance of that plan will be exceeded. In such a case, if the project board requests it, an exception plan will be created, and if approved, it will replace the plan that would no longer finish within tolerance.

Like a ‘normal plan’, the Exception Plan uses product-based planning.

The product-based planning technique is used for each of these situations. In PRINCE2, all plans are documents created through the planning process, which consists of several activity steps. The activity of defining and analyzing products uses product-based planning.

The Product Based Planning Technique consists of four steps:

  •  Create a Project Product Description for the project’s final product (used for Project Plan only)
  •  Create the Product Breakdown Structure
  •  Create a Product Description for each main lower-level product (not all may need a product description)
  •  Create a Product Flow Diagram
Real World Prince2 Product Based Planning Pbs

The first activity of product-based planning is called design the plan and is typically only used once the project agrees on how it will be presented and used.

Product-based planning may consist of only one step for a small and straightforward project. If the project has only one primary end product, then the diagrams are not required — maybe only the Project Product Description is needed – but this would be an extreme example.

There may only be a handful of products for slightly more complex projects, and the two diagrams can be sketched out in minutes. However, this still means product descriptions must be created for significant products, so product-based planning is still used.

The guideline here is” Does creating a product description add value”. The critical question is, “Would determining the product quality criteria be helpful?”

However, how product-based planning is applied to a particular project may not be all or nothing. For example, if the resources for the initiation stage plan are apparent and straightforward, then a simple statement of the time frame and those resources may be sufficient.

During the initiation stage, the project plan is created and uses the product-based planning technique. Because of the high-level nature of the Project Plan, not all products may be known at this time, or, for those that are known, not all of the details can be determined at this point.

This suggests that when using product-based planning on a particular stage at some point in the future for a given project, existing and incomplete product descriptions can now have the extra information added, along with the creation of new product descriptions, known for the first time at this point (which are part of the product based planning technique).

Let us now discuss how the product-based planning technique may be used in the real world.

As with most planning, product-based planning is best done within a team environment such as a planning workshop. This has the advantage of using the combined knowledge, skills, and experience of all those present. The best practical way of carrying out a product-based planning workshop is by doing the following:

1. Distributing a draft copy of the Project Product Description, and via a flipchart or overhead projector, refine the information in that document.

2. Creating the product breakdown structure. This product-based planning step should be given the most time. Consider splitting the participants into groups or facilitating them as one large group.

Give each participant a set of POST-IT Notes, and get them to name the products they believe necessary — one name per Post-It.

Using a large sheet of paper usually mounted on a wall, lay out each Post-it as a product breakdown structure. Be prepared for more than one opinion of the correct structure; reaching a compromise during these product-based planning workshops is essential.

3. Draft copies of all significant product descriptions can now be created, or you may choose to leave such creation until both of the diagrams within product-based planning have been created.

4. Reusing the post-it notes to create the product flow diagram will be reasonably straightforward. Take pictures if you like with your cell phone camera!

That completes the product-based planning technique, but the plan document must be finished.

NOTE. Planning is an iterative activity, and you will return to one or more of the previous product-based planning steps.

The remaining steps of the planning process will now be dealt with.

Real World Prince2 Product Based Planning Pbs

Estimating. PRINCE2 gives little advice on estimating, which is good because projects and industries will vary significantly in their use of estimating techniques. However, the following points may be helpful:

Top-down estimating.

This is usually used when creating the project plan level.

This can be done using a flipchart with a few key people to determine the high-level technical tasks needed. Examples such as design, development, testing, etc, can be used here. Using the experience of the people present, a top-level approach to costs and timescales for each of these activities can be estimated.

An example might be,” This activity will take around four weeks and will need, on average, three people working full-time”. Knowing the labour costs and any other non-than human resources, it is easy to arrive at a cost figure. Drawing a simple Gantt Chart on the flipchart will give top-level estimates of the total project duration.

product based planning Tip 1

As a result of estimating, several outcomes may show that you need to return to product-based planning, and here are a few examples:

  • The product that this activity relates to needs a modified Product Description possible in terms of description, those working on it, or the quality criteria.
  • The product this activity relates to needs to be simplified and may need to be split into several products.
  • The product that this activity relates to is too expensive and needs to be de-scoped
  • The product that this activity relates to requires different development skills and may be subcontracted out.

product based planning Tip 2

Modifying product descriptions as above may require modifying the product breakdown structure and product flow diagram. Another team-based product-based planning workshop may also be necessary.

Bottom-Up Estimating.

This is usually used when creating the stage or team plan levels.

The secret here is to estimate the task duration rather than the work effort needed within each task. By making assumptions about how many people will carry out the work on each task, the duration and costs for each class can be estimated.

Using a planning tool and the team’s experienced advice, the tasks or activities needed to create each product can be set up sequentially and show the proper dependencies between each.

product based planning Tip 3

When creating Product Descriptions at the Project Plan level, you issue draft versions (several of the description fields will be annotated as ‘Not Yet Known’) because, at this point, the team cannot know the full details until the relevant stage in which the product is being created. Therefore, when performing stage planning, the following options may need to be considered:

  • This product description will need to be refined.
  • At stage planning time, a single product description issued at the Project Plan level may now be recognized as several products, and a further product-based planning workshop may need to be convened.

Scheduling 

Using the name of each product in turn, get the participants to create new post-it notes, one for each activity that would be necessary to make each product. These new post-it notes can now be used directly to create a traditional network diagram. The product post-it notes will be represented on such a diagram as a milestone.

What happens next will depend upon the complexity of the project. PRINCE2 assumes the use of a planning tool, and it is often best to bring this planning meeting to a close and use the network diagram as an information source to enter activities directly into such a tool.

The remaining scheduling steps can now be completed, such as critical path analysis, resource levelling and loading, agreeing control points, and creating other costs and resource plans.

product based planning Tip 4

Now that scheduling has been performed, it may become clear that the project time frame is too long, and some of the following options need to be considered (note that all of them will result in returning to different steps in the product-based planning steps:

  • Products are too complex, and the activities are too long
  • Some products may be removed to meet a deadline
  • Some products may need to be de-scoped to simplify activity times.

Risk Analysis.

This consists of using the team to determine this particular plan’s risks. This uses risk analysis, including the selection of possible risk responses.

These actions will need to be built into the plan in the form of activities and resources — resulting in returning to previous steps to include these resources, for example, within the network diagram. It is important to take detailed notes here for late inclusion within the Risk Register – particularly the allocation of each Risk Owner.

product based planning Tip 5

A risk is a threat or opportunity to the project’s objectives (time, cost, quality, etc.), and one or more of the risk responses may be to de-scope or change the product’s quality criteria and, hence, its product description. Another potential outcome is that different resources are needed in the activities that contribute to the product. Therefore, there is a need to return to product-based planning.

Completing the Plan.

This is the final step, and since in PRINCE2 all plans documents, the narrative sections of the plan can now be created — resulting in the completed draft document. It is advised that copies of this draft be circulated to all involved in the planning with requests for feedback to create a second draft. Project Assurance should review all draft copies of Plans.

It can also be helpful to give copies of such draft plans to project board members before an end-stage assessment so that the meeting can clarify and decide whether the project should proceed.

product based planning Tip 6

The Plan document may contain diagrams of the product breakdown structure and product flow diagram, which may lead to updating them. After the draft plan has been reviewed, the feedback or instructions from the project board may be to re-plan before they authorize it. In such a case, product-based planning must be reconvened, usually as a product-based planning workshop.

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Dave Litten


Dave has spent 25 years as a senior project manager for USA multinationals and has deep experience in project management. He now develops a wide range of Project Management Masterclasses, under the Projex Academy brand name. In addition, David runs project management training seminars across the world, and is a prolific writer on the many topics of project management.

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