Organization

In some cases, defining the project organization, along with roles and responsibilities, is rushed, focusing on starting product development as soon as possible. However, as a project manager, you rely on others for decisions, information, and the execution of activities. That’s why getting the organization structure and responsibilities documented and agreed upon early in the project is crucial. Failing to do so can lead to confusion and unnecessary delays later on.

To effectively document the project organization, consider the following:

• Review roles and responsibilities profiles from similar projects within the organization.
• Meet with the project executive to discuss their responsibilities and help design the project board.
• Organize a workshop-style meeting with the project board, using the knowledge from this practice to ask critical questions (e.g., how should communication flow during the project? And who is responsible for defining the benefits?).
• Ensure each person has the required authority, knowledge, and availability. Then, confirm roles and responsibilities in writing.

Customer/supplier environment

A PRINCE2 project operates in a customer/supplier environment. The customer specifies the desired outcomes and typically funds the project, while the supplier provides the resources, performs the work, and delivers the required products.

In PRINCE2, the term customer refers to the party specifying the desired result and usually funding the project. This can include both the user and business interests. For example, in an internal project, the sales department (user) may request a new sales application. Alternatively, in a commercial project, the customer could be external, such as a magazine company developing a new online service for its clients.

PRINCE2 operates within a customer/supplier model, where the customer defines the outcomes and funds the project, while the supplier provides the necessary resources and expertise. In commercial relationships, the contract between the parties limits the project manager’s or team manager’s flexibility. Contracts should promote positive working relationships and align with PRINCE2 to meet obligations.

From the supplier’s perspective, the project lifecycle includes pre-contract activities like qualification, designing, and bidding and post-project activities such as warranty and maintenance.

The 3 primary project interests

PRINCE2 projects have three main categories of stakeholders, which must be represented on the project board: Business, user, and supplier.

1. Business interests: The executive on the project board represents business interests. The business case is key here; the project should not begin without it. Their primary question is: “is this project worth the investment?”
2. User interests: Users benefit from the project’s products, as they are the ones who will use them. They may also operate or maintain these products. Users should be represented on the project board to ensure the correct products are produced and meet agreed quality standards. The senior user role represents user interests on the project board.
3. Supplier interests: Suppliers provide the necessary resources and expertise to create the products. This can be either internal (e.g., an IT department) or external (e.g., an external IT company). Supplier interests are represented on the project board by the senior supplier role.

The 4 levels of a project organization

Understanding the difference between the project management structure (project organization) and the project management team is crucial. The project management structure has four layers, while the project management team has three levels.

The four layers of a project management structure/project organization are:

1. Business layer (commissioning)
2. Direction layer (project board)
3. Managing layer (project manager)
4. Delivery layer (team managers)

Note: The business layer operates outside the project management team but plays a key role in project oversight and support.

Level 1: Business layer

The commissioning (business layer) is responsible for initiating the project by providing the project mandate and identifying the project executive. This layer defines the project tolerances within which the project board will operate and determines how the project board will be kept updated throughout the project. Additionally, the commissioning party decides whether to authorize any potential breach of these project-level tolerances.

Level 2: Directing

The directing (project board) layer guides and oversees the project. It is accountable for the project’s success and ensures that it stays within the constraints set by the business layer. The project board has representatives from the business, user, and supplier communities, and it performs several key functions:

• Approves major plans (such as the project plan and stage plans) and resources.
• Authorizes deviations if stage tolerances are forecasted to be exceeded or have already been breached.
• Approves the completion of each stage and authorizes the next stage’s start.
• Communicates with stakeholders, including the business layer, to keep them informed.

The project board is responsible for setting stage tolerances (e.g., timelines, resources, and sustainability targets) and determining whether to authorize any deviation from the agreed tolerances.

Level 3: Managing

The project manager is responsible for the day-to-day management of the project, ensuring it stays within the constraints set by the project board. Their main responsibility is managing relationships within the project and ensuring the project delivers the required products according to the strategic objectives and agreed requirements, including quality, sustainability, time, cost, scope, benefits, and risk performance goals.

Level 4: Delivery

Team managers and team members are responsible for delivering the project’s products within the agreed quality, timescale, and cost. Team managers have the authority to create plans and manage their teams to produce the required products. They work within the constraints set by the project manager, collaborating with other team members as needed across the project. The managing product delivery process focuses on the teams producing the specialist products.

Project management team structure

The project management team structure in PRINCE2 is composed of the following roles:

• Project board
  • Project executive
  • Senior user(s)
  • Senior supplier(s)
• Project assurance
• Change authority
• Project manager
• Team manager(s)
• Project support

Following is a description of each role related to the team organization.

Project board

The project board is accountable for the overall direction and success of the project. It comprises key roles: the project executive, senior user, and senior supplier. The project executive owns the business case and has final decision-making authority, while the senior user and senior supplier roles may be assigned to one or more individuals depending on the project’s complexity and scope.

The project board plays a crucial role in overseeing the entire project, ensuring that decisions are aligned with the organization’s goals and that the project remains on track. Their primary duties include:

• Being accountable for the success or failure of the project, ensuring that the project meets its objectives and stays within time, cost, and quality tolerances.
• Providing unified direction to the project manager, ensuring clear communication and guidance throughout the project.
• Approving resources and major plans, such as the project plan and stage plans, ensuring that these align with the project’s strategic objectives.
• Authorizing any deviations from the agreed tolerances, particularly when time, cost, or scope is at risk.
• Approving the completion of each stage and authorizing the next, ensuring that the project progresses in manageable, controlled steps.
• Communicating with other stakeholders, including the business layer, ensures the project aligns with broader organizational goals.

The project board’s involvement is critical to providing strategic oversight, but in some cases, they may not fully understand their role, which can lead to insufficient support for the project manager.

For more information, check the project board page.

The project executive

The project executive is appointed by the business layer. They hold ultimate responsibility for the project, ensuring that it delivers value and aligns with the business case throughout its lifecycle.

The project executive also provides a single point of accountability for the project, helping ensure a clear line of decision-making. They are responsible for:

• Developing and maintaining the business case at the start of the project.
• Continuously assess whether the project remains “value for money” and ensure its business justification is valid at all stages.
• Appointing the project management team, including the project manager and other key stakeholders.

As the focal point for business justification, the project executive is critical to the project’s overall success, ensuring alignment with strategic business objectives.

For more information, check the project executive page.

The senior user

The senior user is responsible for ensuring the project delivers products meeting user requirements. This role bridges the project management team and the end-users of the project’s outputs. Key responsibilities of the senior user include:

• Defining the user requirements and ensuring they are communicated to the project board and project manager.
• Ensuring the product meets user expectations, particularly in quality and usability.
• Providing the benefits information needed for the benefits management approach, ensuring that the outcomes will deliver the expected value to the organization and end-users.

The senior user role is vital for ensuring that the project delivers a product that provides value and meets the users’ needs.

For more information, check out the senior user page.

The senior supplier

The senior supplier represents those who are responsible for designing, developing, and delivering the project’s products. They ensure that the right resources, skills, and expertise are available to meet the project’s quality criteria. Key responsibilities of the senior supplier include:

• Providing resources, including skilled personnel and technical expertise required for delivering the project.
• Ensuring the right quality standards are met, particularly those defined in the product descriptions.
• Managing supplier relationships to ensure that products are delivered on time and within budget, according to the agreed specifications.

The senior supplier role ensures that all external and internal suppliers involved in the project are properly coordinated and that the products meet the expected quality.

For more information, check out the senior supplier page.

Project assurance

Project assurance provides an independent view of the project’s progress and performance. This role is essential for ensuring that the project board receives a second opinion on the project’s alignment with the business case and overall success. Project assurance is divided into three areas:

• business assurance (executive): Ensures that the project continues to deliver business value and remains aligned with the business case. The project executive asks, “Is this project still valued for money?”
• user assurance (senior user): Ensures the project will deliver the correct products that meet user requirements. The senior user asks, “will the product work as expected?”
• supplier assurance (senior supplier): Ensures the project is on track to deliver as planned, with the right resources and materials in place. The senior supplier asks, “Can it be done within time, cost, and quality tolerances?”

Project assurance supports the project manager, offering guidance on quality standards, risks, and issues that might impact the project. It is crucial to provide regular, objective oversight.

For more information, check out the project assurance page.

The change authority

The change authority is a designated individual or group to whom the project board delegates the responsibility for managing requests for changes or off-specifications. The role of change authority is critical for ensuring that minor adjustments to the project can be approved and implemented promptly and efficiently without the need to escalate every minor issue to the project board.

Levels of change authority include:

• Level 5: Business layer (corporate / programme management)
• Level 4: Project board
• Level 3: Change authority
• Level 2: Project manager
• Level 1: Project support / help desk

For example, the project manager might approve a minor change request that affects only one product and costs less than €400, as long as the change does not push the project beyond its defined tolerances and the overall project objectives are still achievable.

The project board should focus on handling major changes, while a change authority group can manage smaller, less complex, or more frequent changes. This delegation ensures a smoother decision-making process and more time-efficient management, allowing the project board to focus on strategic direction rather than getting bogged down by routine adjustments.

For more information, check out the change authority page.

The project manager

The project manager is responsible for the day-to-day management of the project and acts as the primary point of contact for the project board. They manage the project on behalf of the project board, working within defined constraints to ensure the project meets its objectives on time, within budget, and according to specified quality standards. The project manager holds ultimate accountability for the successful delivery of the project.

The project manager is actively involved in all PRINCE2 processes except for directing a project and manages both project support and team managers. In smaller projects, the project manager may directly oversee team members and take on the role and responsibilities of project support.

Key skills required for a project manager include:

• Excellent communication skills, alongside a strong cost and quality management capability.
• Effective problem-solving abilities, leadership skills, and a proactive approach to planning and decision-making.
• A strong ability to anticipate and manage risks or issues before they escalate into significant problems, ensuring smooth project execution.

For more information, check out the project manager page.

Team manager

The team manager is responsible for managing specific project elements on a day-to-day basis, especially in larger projects or when specialized knowledge is required. The team manager ensures that the work packages assigned to them are completed according to the project plan and to the required quality standards, contributing to the project’s overall success.

The team manager reports to the project manager, providing regular updates on progress, challenges, and resource requirements. They may also manage teams working in remote locations or handle complex tasks that require specific technical expertise, ensuring that the right resources are applied to achieve project goals.

For more information, check out the team manager page.

Project support

The project support role plays an essential part in providing administrative and practical support to the project manager. This includes:

• Configuration management to ensure that all project documentation remains up-to-date, controlled, and easily accessible.
• Planning and risk management services to assist in managing project activities, timelines, and potential issues.
• Managing the project registers, such as the issue register and risk register, to ensure all project risks and issues are identified and tracked.

In larger organizations, project support offices (PSOs) may be established to provide these services across multiple projects, ensuring consistency, standardization, and supporting the project manager with the necessary tools and resources for managing the project effectively. These offices help maintain a high level of professionalism and consistency in project delivery across the organization.

For more information, check out the project support page.

Related concepts

The following are concepts related to the organization practice:

• Project: A project is commonly defined as “a set of tasks to achieve a specific goal.” in PRINCE2, a project is “a temporary organization created to deliver one or more business products based on an agreed business case.”
• Program: A program is a temporary, flexible organizational structure that coordinates and manages related projects to achieve the organization’s strategic objectives. For example, a company may create a program to implement six sigma across various departments to improve quality by a certain percentage.
• Project management team structure: The project management team structure includes key roles like the project board, project manager, team managers, project assurance, and project support.
• Project team: In PRINCE2, the “project team” refers to all individuals assigned to the project and contributing their time and effort.
• Roles and job definitions: In PRINCE2, project responsibilities are assigned to roles, not individuals. A person can take on multiple roles. For instance, the roles of project manager and project support may be held by the same person in a small project.
• Stakeholder: A stakeholder is any person or group that can impact or be affected by the project. This includes the project board, project team, users, shareholders, and others who could benefit or be harmed.
• RACI chart: A RACI chart is a tool used to clarify roles and responsibilities within a project, providing a visual representation of who is involved in each task. RACI stands for:
  • Responsible: The people who perform the task and are responsible for completing it.
  • Accountable: The person who owns the task and is ultimately answerable for its successful completion.
  • Consulted: Individuals whose input is needed before the task can be completed, typically subject matter experts.
  • Informed: People who need to be kept updated on progress or completion are not directly involved in the product.

By outlining these relationships clearly, a RACI chart ensures no confusion, fosters better communication, clarifies ownership, and promotes effective teamwork, ultimately helping avoid gaps or overlaps in responsibilities.

Stakeholder engagement

Stakeholder engagement is the process of identifying, understanding, and maintaining effective communication with all individuals or groups interested in the project’s outcome. Stakeholders can include anyone from local residents, contractors, government bodies, regulatory agencies, and even future project users. For example, suppose you’re developing a new incinerator on the outskirts of a city. In that case, you might have stakeholders such as local housing groups, construction contractors, the city council, future workers, environmental agencies, and more. It’s essential to recognize that stakeholders may have differing opinions—some may support the project, while others may oppose it.

PRINCE2 stresses that ongoing and effective communication with stakeholders is a key factor in the success of the project. Clear communication ensures that all parties are informed, address concerns, and manage expectations. This is not a one-time task but an ongoing responsibility that both the project manager and project executive must actively engage in throughout the project lifecycle. Stakeholder engagement should be planned, and communication strategies should be defined in the communication management approach document, which outlines how stakeholders will be kept informed and involved during different project phases. Regular updates, feedback loops, and managing stakeholder expectations are critical to maintaining a positive and productive relationship with all involved.

Applying the practice

In PRINCE2, applying the organizational practice involves understanding how a project fits into both its organizational and commercial contexts. These contexts shape the project’s structure, roles, and interactions, ensuring alignment with overall strategic goals and efficient collaboration between various stakeholders. This section will explore how the organizational and commercial frameworks influence project design, governance, and communication, and how they integrate with the project’s objectives.

Organizational context

Projects operate within a broader organizational framework, ranging from standalone in-house projects to large, multi-organizational programs. If the project is part of a program, the project organization must integrate with the program’s governance structure and reporting requirements. Key integration points include:

• Clear lines of responsibility from top to bottom.
• Avoiding duplication of roles or activities.
• Efficient reporting and reviews, especially in programs with shared project board members.

Examples of integration include:

• A programme manager may also serve as the project executive for multiple projects.
• Multiple project boards may merge or be replaced by one body directing several projects.

Commercial context

Projects involving multiple organizations must bridge varying practices and governance structures. Political aspects can impact the project’s organization, commercial management approach, risk and reward allocation, and resource competition. Key considerations include:

• The project manager should understand the contractual obligations between the customer and the supplier.
• A joint project board can involve representatives from both customer and supplier organizations.
• Multiple suppliers may be represented on the board, or a contracts manager may represent them.

The commercial management approach should address team transitions, such as senior supplier roles during procurement.

Related management products

Three of the PRINCE2 management products directly relate to this practice:

• The communication management approach
• Project management team structure
• Role descriptions

Communication management approach

What is the communication management approach document? This document outlines how communication will be managed throughout the project, specifying what information will be communicated, to whom, how often, and through which channels. The project manager will refer to this document throughout the project’s lifecycle to ensure clear and effective communication.

The document details the methods and frequency of communication with both internal and external stakeholders, which may include program management if the project is part of a larger program. The project manager is responsible for creating the communication management approach during the initiation stage. It should be reviewed and updated during the managing a stage boundary process to ensure all stakeholders are receiving the necessary information at the appropriate intervals.

Key components of the communication management approach document:

• Introduction: A brief overview of the document’s purpose and its relevance to the specific project.
• Communication procedure: Describes the communication methods to be used, such as email, meetings, presentations, and other relevant formats.
• Tools & techniques: Outlines the communication tools and techniques, such as email, intranet, newsletters, and collaboration platforms.
• Reporting: Details the types of reports to be produced and the information they should convey, ensuring that stakeholders are kept informed.
• Timing: Specifies when communication activities will take place, including timelines for regular updates.
• Roles & responsibilities: Identifies who will handle various communication tasks, clarifying responsibilities for managing communication throughout the project.
• Stakeholder analysis: Identifies stakeholders, their information needs, and the type of relationship desired with each stakeholder, ensuring effective communication alignment.
• Information needed: Lists the types of information required from the project, including the frequency and format of communications to ensure clarity and accessibility.

Typically, a communication management approach template will be provided by the corporate or program environment, which the project manager can tailor to fit the project’s specific needs. This approach ensures consistency and reduces the effort required for documentation while maintaining communication effectiveness throughout the project.

Project management team structure

The project management team structure is part of the project initiation documentation (PID), created by the project manager during the starting up a project process. It can be updated as needed during the initiating a project process.

The purpose of the project management team structure is to define who is involved in the project, their relationships, and how they will work together. It may also include a description of relevant key personnel outside the project team.

Contents:

• Project structure a chart showing the structure of the team and their reporting lines
• Summary of authority and responsibilities governance arrangements, possibly in matrix form, showing levels of management, the decisions they are authorized to make, who holds them accountable, and who assures them
• Working practices arrangements for co-location or arrangements for remote teams
• Supporting information on other key personnel relationships.

Role descriptions

The role descriptions are part of the project initiation documentation. The project manager will typically use the role descriptions provided in the PRINCE2 manual. The organization may also supply a typical role description document tailored to the organization.

The purpose of role descriptions is to describe the roles of those in the project management team and their specific responsibilities.

Contents:

• Role name of role
• Authority: what the role has authority to approve
• Responsibilities list of responsibilities assigned to the role
• Accountable to who the role reports to
• Supporting information whether the role is part-time or full-time, whether the role is combined with any other role

Organizational design and development technique

PRINCE2 outlines several actions that should be taken, which it refers to as “techniques” because the term sounds more structured. Think of these as a set of steps for defining the project organization.

Effective project management requires proactive organizational design to address key aspects like culture, collaboration, relationships, and building effective project teams. PRINCE2 provides a five-step technique for organizational design and development, though if a business already has an established procedure, it can be tailored to fit the project, as documented in the project initiation documentation.

If these steps are not followed, the project may face unclear roles and responsibilities, ineffective communication, misalignment between stakeholders, and overall poor coordination, all of which can lead to delays, cost overruns, and a failure to deliver the desired outcomes.

Step 1/5 — understand the organizational ecosystem

Projects operate within existing organizational structures and governance frameworks. Understanding this ecosystem is essential for effectively designing a project’s organization. The project team needs to know how the project will interface with the broader organizational ecosystem, particularly in governance, decision-making, and people management. It’s essential to define:

• People management: This includes performance management, rewards, and advancement.
• Governance: Identifying which decisions require business layer approval.
• Management approaches: Defining policies, procedures, and ways of working.
• Transition of project team members: Managing when and how team members join and leave the project.

Step 2/5 — design the project ecosystem

The organizational design process outlines how the project team will be structured to meet its objectives. Key steps include:

• Defining the team structure.
• Identifying the required resources and people.
• Implementing working practices and a project culture.
• Adapting to the skills, capacity, and context of the project.

This process should also account for transitions between project stages, such as moving from a client-led design phase to a supplier-led delivery phase. The organizational structure is shaped by factors such as the work breakdown structure and the commercial management approach, which determine the teams, their roles, and supplier relationships.

Step 3/5 — develop the project ecosystem

As the project progresses, the organizational ecosystem must evolve to meet the project’s changing needs. Key activities include:

• Onboard new team members and provide induction or training.
• Conduct skills assessments and fill capability gaps.
• Building and maintaining a positive project culture.
• Managing succession planning and offboarding.

Change management principles also ensure that new capabilities, such as the appointment of key suppliers, are integrated effectively into the project. Project assurance plays an essential part in guiding the development of the project ecosystem.

Step 4/5 — manage ongoing changes to the project ecosystem

The project manager is responsible for managing the evolving project ecosystem. This involves identifying capacity or capability gaps, adjusting responsibilities, and sourcing additional skills if needed. The project manager also oversees the transition of team members on and off the project, ensuring the right people with the right skills are available when required.

Ongoing change management is essential to adapt to new project needs and the evolving capabilities of the team. Clear feedback loops should be established to address any issues early on. The project manager must also assess the impact of these changes on the overall project ecosystem, including risks or barriers that could affect product delivery or business-as-usual integration.

Step 5/5 — transition the project into the organizational ecosystem

At the close of the project, it’s crucial to ensure that the products and remaining project team members transition smoothly into the organizational ecosystem. The project board must focus on:

• Products: Ensuring that all products are accepted into the business and ongoing activities, such as maintenance and monitoring, are managed by the appropriate teams.
• People: Transitioning remaining project team members back into the business or managing external suppliers in line with agreements.
• Learning: Capturing lessons learned and sharing knowledge gained during the project. This includes ensuring that skills developed by the project team benefit the wider organization.

By addressing these areas, the project ensures a smooth handover and maximizes the benefits of the project for the business.

Roles and responsibilities

• Business layer
  • Appoints the project executive and project manager during the starting up a project process.
  • Provides the communication management approach template.
  • Ensures alignment of the project with corporate strategy and goals.
• Project executive
  • Appoints the project manager if not already done.
  • Chooses the project board and confirms the project management team.
  • Approves the communication management approach document.
  • Represents the project at the business (corporate) level and supports the project manager in decision-making.
• Senior user
  • Provides user resources and defines project requirements.
  • Ensures the project’s output meets user needs and expectations.
  • Liaises with the project manager to address user concerns throughout the project.
• Senior supplier
  • Provides supplier resources and ensures the quality of supplier contributions.
  • Advises on technical aspects and manages supplier relationships.
  • Ensures contractual obligations with suppliers are met.
• Project manager
  • Prepares the communication management approach during the initiating a project process.
  • Prepares role descriptions for the management team during starting up a project.
  • Assists in developing and maintaining the business case.
  • Manages the project’s day-to-day operations, ensuring successful delivery on time, within budget, and to required quality standards.
• Team manager
  • Manages team members and delivers work packages on time and to the required quality.
  • Provides regular progress updates to the project manager.
  • Fosters a productive working environment and resolves team issues.
• Project assurance
  • Advises on the selection of the project management team.
  • Ensures the communication management approach is appropriate.
  • Monitors project progress, providing independent assessments and recommendations.
  • Supports the project board by ensuring governance processes are followed.

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Written by Frank Turley.

If you have questions or doubts after using this wiki, you can ask for help on the Facebook or LinkedIn study groups.