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Author  Nigel Bennett, Consulting Director – RSM UK and PRINCE2 2017 Update author

May 17, 2017 |

 5 min read

  • Blog
  • Governance
  • Project management

Rarely does an organization design its project management method from scratch. Instead it needs to be aware of the standards, best practice methods and bodies of knowledge related to project management (e.g. BS 6079, PRINCE2®, PMI’s PMBOK® and APM’s Body of Knowledge) and should apply them in a manner appropriate to their business.

The 2017 update of PRINCE2 notes the possibility to create and embed a corporate method which complies with all these, as each of them promotes tailoring. While offering some guidance on how to do this, the focus of the changes made for the PRINCE2 update is tailoring to the project environment.

The project environment

PRINCE2 assumes there is a customer who will specify the desired result and a supplier who will provide the resources and skills to deliver that result. But what if the customer is a change programme of a portfolio? And what if the relationship between the project and its customer and/or supplier(s) is a commercial one?

The update now offers some specific guidance for projects operating in these environments and brings PRINCE2 closer to other AXELOS best practice such as MSP® and MoP®. To emphasize this, the updated version of PRINCE2 now refers to the organization that commissions a project as “corporate, programme management or the customer” or “the commissioning organization”.

Projects in a portfolio or programme environment

A programme may commission a project to enable or deliver some of the programme’s benefits. Organizations may also have corporate organizational structures in which projects are commissioned to deliver strategic objectives to that organization and are managed within portfolios of related projects.

The project may be impacted by the portfolio or programme’s approach to governance, its structure and its reporting requirements. For example, the portfolio or programme:

  • May have its own approach to starting up a project which may fully or partially replace the one described in PRINCE2
  • Will likely provide a business case and the project brief in whatever form is mandated by its approach
  • May place some specific requirements on project approaches and controls to align to its approach – for example how to report progress, or how to respond to risks identified by the project that impact the organization’s strategy or the programme’s benefits realization.


  • The portfolio or programme manager may ensure the appointment of the executive and project manager, review previous lessons and appoint the initial project management team
  • The project’s logs and registers may be maintained locally to the project or centrally within the portfolio or programme (it is often the case that the organization has invested in tools to enable this)
  • The project board as described by PRINCE2 may be replaced by the governance structures in use by the portfolio or programme. For example, if there is an individual project board for the project, then the programme manager may take the executive role.

Projects in a commercial environment

Where the project is being run to deliver to a specific set of customer requirements, the customer may have entered into a commercial relationship with a supplier following a formal tender. The organization delivering the project – the supplier – will do so in order to satisfy a particular need identified by the customer.

When managing projects in a commercial environment:

  • The starting up a project process will take place pre-contract and is typically in response to the customer’s request for information or a proposal
  • Some of the initiating a project process may also be pre-contract as the supplier will need to formulate their strategies, plans and controls in order to assess the viability and desirability of the sale
  • There may be multiple business cases. For example:
    • The customer’s business case may be based on benefits of which the supplier is not aware, whereas the supplier’s business case is based on making profit in response to delivering a solution to defined requirements
    • The customer may be engaging several suppliers, each with different requirements and each of which will have their own business case
    • A supplier may sub-contract some or all of the agreed work to other suppliers who in turn will have their own business cases. The original supplier is then the customer for the sub-contracted supplier(s).
  • The customer may have specific requirements on the supplier which will then be included in the contract to ensure that the project can be effectively controlled. For example, the customer might insist that the supplier uses the customer’s approach to managing issues and reporting progress
  • For an external supplier, their work package may take the form of a legally binding contract.

In short, the new PRINCE2 manual provides some examples of different environments in which a project might exist. Unless the project team understand the context of their project, they will not be able to tailor PRINCE2 to suit their own circumstances.

See our PRINCE2 and PRINCE2 2017 sections for more information.

Read more blog posts on the PRINCE2 2017 Update

PRINCE2 2017 Update: balancing minimum requirements an | Axelos

PRINCE2 2017 - tailoring project management to organiz | Axelos

PRINCE2 2017 Update – tailoring gets better results | | Axelos

Importance of Vision: a PRINCE2 2017 update case study | Axelos