PMP vs PRINCE2 | The difference between PMP and PRINCE2




PMP
PRINCE2
Stands for Project Management Professional
Stands for PRojects IN Controlled Environment

There are two levels of PRINCE2,
- PRINCE2 Foundation
- PRINCE2 Practitioner
Body that provides the certification – Project Management Institute (PMI), USA
Body that provides the certification – AXELOS, UK
Pre-requisites
- Secondary degree (high school diploma, associate’s degree or the global equivalent)
- 7,500 hours leading and directing projects
- 35 hours of project management education
OR
- Four-year degree
- 4,500 hours leading and directing projects
- 35 hours of project management education
Pre-requisites
PRINCE2 Foundation
- Formal Training

PRINCE2 Practitioner
- Formal Training
      - PRINCE2 Foundation

Exam
- 4 hours / 200 Questions
- Multiple Choice Objective Questions
Exam
PRINCE2 Foundation
- 1 hour / 75 Questions
- Multiple Choice Objective Questions

PRINCE2 Practitioner
- 2.5 hours / 9 Questions
- Scenario based questions
- Open book exam!
Certification Renewal
- CCRS System
- 60 PDUs every 3 years
Certification Renewal
PRINCE2 Foundation
- Not required

PRINCE2 Practitioner
- Re-exam every 3-5 years

What is Project Management?



Before understanding Project Management, it is important to know what a Project is,
  • A project is temporary. It has a definite start and end date. Thereby having a defined scope and resources
  • A project is also unique. It is not a routine everyday operation. It is a specific set of operations designed to accomplish a well-defined objective
To be able to do a project, you need a project team,
  • A project team includes people, who might not usually work together and could belong to different organizations and across multiple geographies, that come together to complete the project 
Now to define Project Management, it is the application of knowledge, skills, methods, experience, tools and techniques on project activities to meet the project objectives. Developing a new website or a software, relief effort as a result of a natural disaster, construction of a building or a bridge are all example of a project that requires project management. Business leaders understand that project management is a function within the organization and hire individuals that are specifically trained in this discipline (project managers) to handle organization's project management needs

Project management processes fall into five groups: (as defined by PMI)
  1. Initiating
  2. Planning
  3. Executing
  4. Monitoring and Controlling
  5. Closing
Project management knowledge draws on ten areas: (as defined by PMI)
  1. Integration Management
  2. Scope Management
  3. Schedule Management (known as Time Management in PMBOK 5)
  4. Cost Management
  5. Quality Management
  6. Project Resource Management (known as Human Resource Management in PMBOK 5)
  7. Communications Management
  8. Risk Management
  9. Procurement Management
  10. Stakeholder Management

Overview of the Perform Integrated Change Control Process



In addition to the Monitor and Control Project Work process, the other process under Integration Management knowledge area and Monitoring and Controlling process group is the Perform Integrated Change Control.



Two things that are a corollary from Monitor and Control Project Work process for Perform Integrated Change Control process are,

1. Since the Project Manager is constantly looking for problems and measuring the project against the project management plan in the Monitor and Control Project Work process, it is inevitable that (s)he will come across changes

2. Since the Monitor and Control Project Work process is continuously performed throughout the life of the project, changes can also occur at any time

So now that we know that changes are inevitable and can pop-up at any time, how do we decide which ones to execute? This is where the Perform Integrated Change Control process chimes in.

Why not implement all the changes? Well, every change is likely to impact one or the other triple constraints and thus it is not feasible to execute all the changes. And it is in the Perform Integrated Change Control process that the decision of whether or not a change needs to be executed is made.

Changes not managed well are going manage your project for you and thus a change management plan is one of the key elements of the project management plan.

Check more articles on Integration Management

Top 3 things to know about Monitor and Control Project Work Process



Monitoring and Controlling process as a whole oversees all the tasks and metrics necessary to ensure that the approved and authorized project is within scope, on schedule and on budget so that the project proceeds with minimal risk. Under integration management, one of the two processes for Monitor and Control process is Monitor and Control Project Work (the other being Integrated Change Control). Below are the top 3 things to know about Monitor and Control Project Work Process,



1. Monitor and Control project work basically means measuring progress against the Project Management Plan

2. During the Monitoring and Control Project Work process, the Project Manager is essentially constantly looking for problems in the project

3. Monitoring and Controlling process is continuously performed throughout the life of the project

Check more articles on Integration Management

Work Authorization System



The Work Authorization System is an important aspect and you can definitely expect atleast a question around it in the PMP exam.

The Work Authorization System is basically a subsystem of the overall project management system. It is a collection of formally documented procedures that define how project work will be authorized (committed) to ensure that the work is done by the identified organization (or resources), at the right time and in the proper sequence. The work authorization system might also be used by the project manager (and his or her designees) to approve all the project work throughout the course of project.

Work authorization procedures specifically detail who may authorize work to be completed and how those authorizations may be obtained. These procedures will include which documents must be completed prior to work being initialized and whether there are any other prerequisites to work being performed at any particular level during the project.

It should be noted that a work authorization system is not just an application or a tool. It includes both the process/rules and a tool/application to enable and track the project work. A PPM tool, a Sharepoint or even an excel spreadsheet could be used as the tool but for it to become a Work Authorization System, the formally documented procedures needs to be defined.

Below is a sample PMP question,

Q. A formal procedure for authorizing project work is a:
A. Project Charter
B. Scope Statement
C. Statement of Work
D. Work authorization

The answer is D

Yes, Project Charter does authorize the Project Manager but the question talks about the “formal procedure” here. The procedure is indeed called the work authorization system. Do note that the Work Authorization System is an EEF (Enterprise Environmental Factors)

Top 5 tips for the PMP Exam Day



While we have covered the topic of tips for your PMP exam in many other articles, this one deals specifically with tips to follow on your exam day. Below are the top 5 tips for the day of the PMP exam,

1. By now you would have already learnt ALL the formulas! There is no alternative to it. Jot them down on your brain dump especially the Earned Value and PERT.

2. By now you would have already practiced the technique of eliminating the completely implausible options first. Don't forget to use an educated guess to select the most appropriate option

3. There are no negative marks for incorrect answers. ANSWER EVERY SINGLE QUESTION!

4. You need to answer 200 questions in 240 minutes (4 hours) which gives you about 72 seconds for each question. Do not invest more than that on a question, mark the most appropriate answer and move on. Come back to the question later if you have time

5. Whenever there is a conflict between PMBOK concept and real life Project Management experience, PMBOK wins! Your answer needs to be in alignmnet with the PMBOK concept

Check out all the PMP Exam Tips on this playlist

Top 3 things you must know about Defects



Defects are inevitable and all projects have them. Fixing defects means fixing deliverables not necessarily the plan. Below are the top three things you should know about defects -


1. When you are correcting a mistake or repairing a deliverable, you are basically fixing a defect

2. Fixing a defect is also a part of the Direct and Manage Project Work process

3. Note that fixing a defect doesn’t mean that the project management plan was wrong, rather it means that the plan was right but the built deliverable was wrong

Top 3 things you must know about Deliverables



'Deliverables' is one term you will come across many a times during the course of a project.

We list the top 3 things you must know about deliverables below, these will come in handy for a better understanding during the exam -

1. A deliverable is basically everything the project team produces during the course of the project activities

2. The deliverables of a project not only includes all the products and services the project aims to create for the customer/client/project sponsor but it also includes all the various internal documents, plans, budgets, schedules etc the project team creates

3. Direct and Manage project work process is where the project team produces the deliverables

Is having a PgMP Certification worth it?



After years of experience and PMP certification under your belt, is PgMP the next logical step?


Here is what PMI website says about PgMP and who should apply,


Who Should Apply?If you have the proven ability to manage multiple, related projects and navigate complex activities that span functions, organizations, regions or cultures and to align results with organizational goals, then you’re a potential PgMP.

Below are the top 3 reasons to consider PgMP and also why one shouldn't consider it -

Why consider PgMP Certification
1. If you already have Program Management experience (6000 hours of it is mandatory as a pre-requisite for PgMP, more on PMI Certification pre-requisites here) and you want to solidify the experience with a tag of certification you should definitely consider PgMP by all means

2. If your job requires PgMP certification then there is no getting around it. There are organizations that encourage and even mandate certain certifications for its employees

3. If you want to stand out from the crowd, PgMP is one way of doing so as there are only ~2000 PgMP certification holders at the moment. PgMP can shine as a rare jewel in your resume

Why not to consider PgMP Certification
1. While there are only ~2000 certified PgMPs currently, isn't that a sign of the lesser industry demand for the certification? If it was in huge demand, wouldn't everyone be rushing after it?

2. If you are considering switching jobs or changing industries and looking for PgMP to help you do so, you should probably consider something else. Just take a look at the number of jobs on local job portals that list PgMP as a must-have. Chances are, there aren't many jobs like that!

3. PfMP is the next level after PgMP and by the time you are caught up with PgMP and then PfMP, PMI may possibly come up with yet another higher level certification. The returns you can expect after these certifications aren't ground breaking and the law of diminishing returns does apply

Ultimately, it is upto you whether you want to get yourself a PgMP or not. Whatever you decide, do consider the points above.

Project Selection - Internal Rate of Return



Definition
Internal rate of return (IRR) is the interest rate at which the cash inflow and cash outflow of the project equals zero.

You don't have to understand that!

Sample Question
There are three projects for you to choose from: Project A has an internal rate of return of 15%, Project B 20% while Project C -20%. Based on the information provided, which is the best project?

A. Project A
B. Project B
C. Project C
D. Not enough information provided

Solution: B

Higher the better
The larger the IRR, the more favorable the project financially is to the organization.

Project Selection - Benefit-Cost Ratio



Definition
Benefit-Cost ratio is the ratio of the benefits of a project compared to the costs calculated in terms of Present Value (PV).

BCR > 1 - the project is profitable, and the higher the BCR the better

BCR = 1 - the project will break even
BCR < 1 - the project will cause the organization to lose money and is generally considered as not a good investment

Sample Question

The total cost of a project being undertaken is $1,000,000 (NPV). It is expected that an increase in revenue of $2,000,000 (NPV) would be realized once the project is complete. What is the Benefit-Cost Ratio (BCR) of the project?

A. 0.5

B. 20
C. 2
D. Not enough information to calculation

Solution: C


Benefits = $2,000,000 and Costs = $1,000,000. Since BCR = Benefits / Costs = $2,000,000 / $1,000,000 = 2


Ideally speaking, you will not be required to calculate BCR in the PMP exam. Expect the value of BCR to be given in the question where you can select the highest as being most favorable.

Larger the better
The larger the Benefit-Cost Ratio (BCR), the more favorable the project financially is to the organization.

Project Selection - Opportunity Cost



Definition
Opportunity Cost is the highest value a person needs to give up for the selected choice.

For example, if you have US $10, you can either buy a coffee or an apple pie. When you buy the apple pie, your opportunity cost is coffee.

There is no calculation required for getting the opportunity cost.

Sample Question
You need to select one of the three proposed projects. However, owing to the limitation of capital, only one project can be chosen. Project A would have a NPV of US$100,000, Project B would have a NPV of US$120,000 while Project C would have a NPV of US$50,000. What is the opportunity cost of choosing the project with the highest NPV?

A. US$120,000
B. US$50,000
C. US$100,000
D. US$150,000

Solution: C

Note
Do note that Opportunity Cost is simply the highest value of the project not being selected. No addition, subtraction required!