Executive Summary
This report compares the basic features, principles, themes and processes of two project management methodologies: PRINCE2 and Agile Methodology. Based on the analysis, the appropriate industry or project where each framework may be applied is suggested. The methodology used to develop this report involved a search of 15 recent articles in various journals using Google. Publications across different industries were reviewed to support the analysis. The report covers the key characteristics of the two methodologies, a critical evaluation of the principles, themes, and processes, and appropriate contexts of application. In conclusion, PRINCE2 differs from Agile Methodology in customer involvement, project focus and management focus. Therefore, it is useful for large projects with many stakeholders and clear deliverables. On the other hand, Agile Methodology is appropriate for software development that requires greater customer involvement and iterative interactions.
Introduction
With a growing shift to project-based work models, firms must effectively control risks in projects for a better success rate. Efficient project management (PM) ensures timely access and use of key information to manage challenges and threats. During the execution phase, ongoing monitoring and evaluation of specified objectives, timelines and cost estimates against the progress made will identify deviations from baseline milestones for corrective action. An appropriate PM methodology is needed to keep the project on track in terms of time, budget and outcome. This report compares the PRINCE2 and agile methodologies with a focus on each technique’s characteristics, principles and themes, and industry application with its pros and cons.
Key Characteristics of PRINCE2 and Agile Methodologies
PRINCE2 is a standard method for effective control across the project cycle. This process-based PM is predominantly used in the UK and international organizations (McGrath and Whitty, 2020). One key characteristic of this methodology is its limited and defined life cycle for projects. Additionally, PRINCE 2 contains well-defined business products that can be quantified, related project activities for achieving them, a budget and an organizational structure with delineated roles for all team members (Pawar and Mahajan, 2017). The goal is to provide a PM environment for managing product delivery based on a business case.
The Agile Methodology is designed to support the flexibility needed in the changing business environment. It emerged from the need for agility in software development that traditional techniques could not offer (Munteanu and Dragos, 2021). It is characterized by greater teamwork and cooperation among the project team, client and end-users. By using consumer feedback, agile, self-organized teams respond quickly to changes in the market (Koi-Akrofi, Koi-Akrofi and Matey, 2019). Another feature of Agile Project Management (APM) is continuous adaptation – adjustments in project scope or specifications are accepted rather than opposed. Design and execution occur iteratively such that one component of the project is completed before proceeding to the next one. The agile strategy is also characterized by greater transparency, as end-users are involved in PM (Koi-Akrofi, Koi-Akrofi and Matey, 2019). Thus, it promotes exploration and diversity of ideas, with the project manager acting as a facilitator.
Critical Evaluation of PRINCE2 Principles, Themes and Processes
PRINCE2 methodology is based on three categories of elements that guide the process-based control of PM. The first pillar includes seven principles that must be observed, as they are scalable, appropriate for any project, and adaptable to specific PM needs (Vaníčková 2017). These components ensure effective monitoring and control of activities from the start to the conclusion of a project. The seven PRINCE2 methodology principles are shown in Figure 1.
Continued business justification entails developing a business case for the project at the initiation stage and continually refining it during its lifecycle. It is evaluated at the end of individual phases against baseline costs, time, and threats to decide if project continuation is justified (Pawar and Mahajan, 2017). Learning from experience focuses on evaluating past related projects for lessons that can be incorporated into the current one. Each team member has a clear responsibility and mandates in the project, which helps eliminate role conflict and communication problems that often contribute to failure (Bishop, 2017). However, this aspect makes PRINCE2 bureaucratic and inflexible since each individual only does what pertains to his or her job in the project.
A PRINCE2 project is managed by stages, whereby planning, execution and control are completed for each phase before proceeding to the next one. The division of the project into manageable chunks ensures better planning, monitoring and control (Perrier, Benbrahim and Pellerin, 2018). The principle of managing by exception entails escalating phased activities or plans that exceed the set tolerance limits to the senior management for direction (Vaníčková, 2017). This tenet ensures efficient utilization of the board’s time, as executives are consulted only when necessary. The last two principles focus on products, which guarantees quality and tailoring decisions to the project environment (Altahtooh, 2020). In the latter case, applying PRINCE2 without considering the context or industry will lead to failure.
The second pillar includes themes, which are essential knowledge areas for implementing the principles. They are defined at the start and closely controlled to maintain the project on course. The first theme is the business case for the project that aligns with the constant justification principle (Pawar and Mahajan, 2017). Its goal is to ensure the investment is viable and feasible at each stage. The second theme is an organization, which requires PM Managers to define each member’s role in the project (Perrier, Benbrahim and Pellerin, 2018). Another knowledge area included in PRINCE2 is quality, which is aligned with the product’s principle. It is defined before starting the project to ensure all requirements are met during execution.
An important PRINCE2 theme includes plans, which are descriptions of activities for achieving targets. Plans clarify what needs to be done to reach project objectives (Pawar and Mahajan, 2017). The remaining PRINCE2 themes focus on evaluation and adjustments during execution. The knowledge area of risk aims to identify and control unexpected events or exploit opportunities, while the aspect of change centers on adding or removing requirements in response to customer requests (Altahtooh, 2020). Thus, PRINCE2 does not seek to prevent change or risks but to manage them. The last theme is progress, which helps ensure the project proceeds according to the initial plan.
PRINCE2 is a process-based methodology that comprises seven processes with key activities that should be completed during the project lifecycle. The first one is the pre-project phase, where key project information is collected and top management and project manager are recruited (Vaníčková, 2017). Other activities completed at this stage include the appointment of team members and the development of a business case. The remaining sequential processes are initiating a project (assessing its business merit), directing it by involving the board, stage control, management of project delivery and state boundaries and closure (McGrath and Whitty, 2020). These PM steps are followed throughout the lifecycle of a project.
Critical Evaluation of Agile Methodology
APM comprises structured methods and techniques for creating agility in software development. ‘Agile’ describes the responsiveness or flexibility to change or uncertain environments (Hohl et al., 2018). APM diverges from traditional PM methods that require planning of the project in its entirety before execution. Agile methods prioritize the pragmatic delivery of individual modules of software without looking at the whole project (Koi-Akrofi, Koi-Akrofi and Matey, 2019). Agility is considered critical, given the potential for user-driven modifications. Therefore, a cultural change is required to transform traditional organizations into agile ones.
APM is applied as a better alternative to the less flexible traditional methodologies based on four major values. First, the Agile Manifesto launched in 2001 prioritizes people and interpersonal collaboration over project tools (Hohl et al., 2018). Thus, the methodology centers on using skills and talent available internally to build functional teams and relationships that will deliver project objectives. Second, APM values working on software development rather than documenting the design process (Altahtooh, 2020). This aspect depicts this methodology as a results-oriented approach to PM. Third, in APM, customer involvement is valued over inflexible contract terms. Partnerships with end-users ensure timely feedback which is crucial to make modifications that enhance user experience. Fourth, responsiveness to change is prised over adherence to the baseline plan, which accords APM with the flexibility needed to react to changing conditions or market turbulence.
The Agile Methodology is founded on several core principles that guide its implementation in projects. To satisfy customers, components must be delivered on time without compromising quality (Hohl et al., 2018). This principle implies that APM is customer-oriented; delivering customer value early is a hallmark of agile methods. Additionally, dividing a complex project into smaller tasks is a standard practice in executing APM. These deliverables are then completed independently as opposed to handling the entire project as a single indivisible unit. Thus, the management and control of each task are easier and more effective in APM.
Under the APM framework, self-organization is promoted in small teams tasked with completing each project deliverable. Members work to succeed as a team, and without role overlaps, progress is made when each person does his or her respective task (Hohl et al., 2018). Individual expertise and talent are harnessed in these groups to achieve the set deliverable with agility. Motivation and support are provided to the team to deliver efficiently and optimally. APM also builds trust and confidence in individual and group abilities to meet expected outcomes. Another core principle is establishing processes that support sustainable activity (Schuh et al., 2018). Collectively agreed-on rules and procedures ensure team members own the processes and their momentum is sustained to the end of the project. APM demands that deliverables are attained at a sustained rate and as early as possible. This principle is the basis for agility – delivering within a small timeline (Perrier, Benbrahim and Pellerin, 2018). Changes to the initial requirements are viewed positively as essential for customer satisfaction rather than as a problem.
Critical Evaluation of Both Methodologies
The principles underlying each PM methodology determine the type of industry or project it can be applied. For example, PRINCE2 is versatile and adaptable to a specific project environment, which makes it more suitable for governments and private entities globally (Schuh et al., 2018). An additional feature supporting PRINCE2 as an appropriate methodology for complex entities is that the roles of each team member are defined, which helps overcome communication challenges. According to Vaníčková (2017), the benefits of PRINCE2 are its usability, clarity of team responsibilities and focus on product quality. The methodology is suitable for a controlled approach to the implementation of mega projects, for example, e-government projects. The theme of risks ensures that threats inherent in large projects are detected, evaluated and controlled efficiently.
PRINCE2 is a structured approach to PM for controlling projects from the start to the end. It is appropriate for long-term projects that are divided into easily manageable phases. In contrast, APM is suitable for software development, where each component is considered a deliverable and assigned to a small team of developers (Perrier, Benbrahim and Pellerin, 2018). PRINCE2 enhances communication between the project team and stakeholders by defining the roles of each party. Thus, this methodology may be applied to multi-stakeholder projects, such as public health programs. However, PRINCE2 is a complex and bureaucratic framework and is thus not suitable for smaller organizations (Bishop, 2018). Such entities lack skilled staff and resources to successfully implement this methodology.
APM emphasizes customer involvement in the project so that teams understand the quality expectations of the end user. Agile manufacturing has applied this methodology to create a highly responsive team that works on tasks to meet client satisfaction (Loiro et al., 2019). Agility helps manufacturers respond to change swiftly and thrive during unpredictable and turbulent times. The flexibility and responsiveness of APM make it suitable for product development projects (Schuh et al., 2018). An agile production system ensures customers are involved in the design and testing of a new brand or item.
One key advantage of APM is that it allows adjustments at any point to meet new requirements. It adopts incremental testing that lowers the risk of failure, making it appropriate for software development projects (De Carvalho and Mello, 2017). However, constant collaboration with the user increases the time needed to complete them. The agile methodology is particularly useful for developing new products in the financial services industry. Banks are under constant pressure to adopt digital solutions quickly to compete with the smaller FinTech firms that use APM (Scott et al., 2021). In this case, agile methods are useful for rapidly developing innovative solutions that meet customer needs.
APM is aligned with the start-up philosophy in which multiple teams often collaborate to develop a product. This approach enhances creativity and teamwork, as self-organized teams promote new ideas and perspectives needed for innovation (Ribeiro and Domingues, 2018). In contrast, PRINCE2 is a hierarchy system with defined roles and responsibilities for each person. Thus, this methodology may not promote teamwork and innovative solutions. In APM, smaller teams work on research, design and development and collaborate to deliver innovations or software (Rasnacis and Berzisa, 2017). The approach shortens the time needed from product idea development to launch. However, the iterative nature of this method places extra demands on developers and users who may require training to support the process.
Conclusion
PM methodologies offer specific benefits to firms when adapted to specific project environments. However, the two approaches differ in management, customer involvement, and project focus. PRINCE2 is characterized by a limited project lifecycle, while APM is iterative. Further, a controlling and bureaucratic management style is used in PRINCE2. In contrast, the PM Manager acts as a facilitator in APM. Unlike in PRINCE2, customers are constantly involved in agile projects, which enhances a firm’s responsiveness to market changes. By focusing on people rather than the process, APM promotes the creativity and teamwork that is needed in software development. On the other hand, PRINCE2 is appropriate for a large government or private sector projects where the focus is on the deliverables.
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