Projects in Controlled Environments
PRINCE2 is a process that management accountants frequently utilise to help projects achieve their end/ultimate goals within a set time frame and budget. This is not a subject that an MBA would normally deal with directly, but they should be aware of it because accounting teams and effective project management is crucial in terms of managing a project to ensure productivity and anticipated revenues.
The definition or a project is something that has a defined star point and finish point with an ultimate goal to be achieved in-between. Therefore, projects are one-off or building blocks of individual business goals. For example, if a company wanted to be the world’s largest builder of ships, there may be several projects that build up resources, staff, machinery, experience, market presence and infrastructure to allow this to happen. The overall company ambition is to be the largest ship builder; projects utilised to realise this ultimate ambition could be the construction of a new large sea facing unit to take larger ships than before, follow by a project to equip the building with the essential equipment and upskill staff simultaneously. Equally, projects could be completely one-off. For example, the publication of a particular resource – once published, the project is done for the people compiling the work (then over to marketers at that stage).
PRINCE stands for PRojects IN Controlled Environments.
PRINCE2 focuses on the business justification for the project. This means assessing how much the project is needed, if it is a priority and how much income will it generate either directly or by vitally supporting other company processes. If it is a product, it could be a new stand-alone product, for example a new vacuum cleaner with a unique technology. The project could be to replace a commonly failing part in the new vacuum i.e. supporting customer service as well as introducing a new physical part to the market for those whose vacuums are out of warranty. Individual projects may be set up during or following these projects (sometimes termed spin-off projects).
The team selected will be based on their skills, competencies and experience. The team selection is part of PRINCE2. This looks at the balance of skills needed, skills that are already available, costs associated with training/upskilling and the costs associated with each member of the team.
PRINCE2 is normally associated with products. The planning processes is centered on the product and what is needed to accomplish the defined project outcomes in the desired timescale and within budget.
As a project has a beginning and end, PRINCE2 looks to break the stages of the project into manageable chunks so that each stage can be independently managed to ensure timely delivery and a preferable cost. This way, skills can be utilized more efficiently, ensuring that the most experienced people are selected for each specific stage, avoiding individual employees working on certain aspects that may be more suited to other members of the team. Each stage of a project, although it will have its own lace in the time-frame of the project as a whole can start to be planned from the outset to ensure that everything needed is in place and all necessary resources, people and facilities are available at the perfect time. This allows for flexibility if something is finished before or behind schedule and allows for resources to be given to another stage if problems are noticed.
To find out more about PRINCE2 or to become certified, visit the official website by clicking here.
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