Planning the initiation stage

The last activity of starting up a project is to plan the initiation stage. Initiation is not free: it takes the time of the project manager, the board, assurance and specialists, and it may need surveys, supplier discussions or early procurement work. The board needs to know what it is being asked to authorize, how long it will take, what it will cost and what it will produce. The initiation stage plan answers those questions. Together with the project brief, it forms the request to initiate the project that starting up sends to the board.

What the initiation stage must produce

The purpose of the initiation stage is to establish solid foundations for the project so that the organization understands the work required before committing to a significant spend. Its main product is the project initiation documentation (PID), which lessons 8 to 10 examine in detail. Toward the end of initiation, managing a stage boundary also produces the stage plan for the first delivery stage. So the initiation stage plan must include the time and effort to produce both, plus any specialist work needed to make the estimates in the project plan credible.

The initiation stage plan

The initiation stage plan is a stage plan like any other, but its products are mostly management products. Product-based planning, covered in PRIN-130, applies: the project manager identifies the products initiation must create, writes simple product descriptions where helpful, works out the dependencies, estimates effort and duration, schedules the work and calculates the cost. It should also state the stage tolerances the project manager proposes and the reporting arrangements: for a short initiation, a highlight report every two weeks is usually enough.

Initiation often includes some specialist work. Ridgeline Water's initiation stage includes a radio coverage survey of the pilot district, because the lessons log showed that a similar project avoided an expensive redesign by surveying coverage before contracting. It also includes early market engagement with meter suppliers, so the cost estimates in the project plan are realistic, and an interface workshop with IT about the billing upgrade. These are not delivery work: they reduce uncertainty in the plan and the business case.

Rolling up the cost and duration

The code below takes Ridgeline Water's initiation products, their effort estimates, the people involved and the external costs, and rolls them up into the cost and duration the board will be asked to authorize. It uses a simple forward pass through the dependencies to find the earliest finish of each product.

products = {
    # name: (duration_weeks, depends_on, internal_days, external_cost_thousand)
    "Management approaches": (4, [], 18, 0),
    "Coverage survey": (4, [], 6, 42),
    "Market engagement": (4, [], 8, 0),
    "Leak data analysis": (3, [], 12, 0),
    "Project plan": (2, ["Coverage survey", "Market engagement"], 10, 0),
    "Detailed business case": (1, ["Project plan", "Leak data analysis"], 6, 0),
    "PID assembly": (1, ["Management approaches", "Detailed business case"], 4, 0),
    "Pilot stage plan": (1, ["Project plan"], 6, 0),
    "Board and assurance time": (8, [], 14, 0),
}
day_rate = 0.95  # thousand per internal person-day (blended, illustrative)
finish = {}
def ef(name):
    if name not in finish:
        dur, deps, _, _ = products[name]
        finish[name] = dur + max((ef(d) for d in deps), default=0)
    return finish[name]
for p in products:
    ef(p)
days = sum(v[2] for v in products.values())
external = sum(v[3] for v in products.values())
internal = days * day_rate
pm = 8 * 5 * day_rate   # project manager full time
cost = internal + external + pm
print(f"Duration: {max(finish.values())} weeks (critical path ends with '{max(finish, key=finish.get)}')")
print(f"Internal effort: {days} person-days plus project manager ({internal + pm:,.1f} thousand)")
print(f"External costs: {external} thousand")
print(f"Initiation stage cost: {cost:,.1f} thousand")

Duration: 8 weeks (critical path ends with 'PID assembly')
Internal effort: 84 person-days plus project manager (117.8 thousand)
External costs: 42 thousand
Initiation stage cost: 159.8 thousand

The critical path runs through the coverage survey, the project plan, the detailed business case and PID assembly, giving eight weeks. The stage costs about 160 thousand, which matches the figure in the outline business case and is less than 2 % of the 9,600 thousand the project would commit to delivery. The project manager proposes stage tolerances of ±10 % on cost and +1 week on time: generous in percentage terms, but small in absolute terms, which is appropriate for a stage full of investigation.

Proportionality

How big should initiation be? PRINCE2's answer is: as big as the risk and size of the project justify, and no bigger. A two-week initiation might suit a small internal project with a clear approach. A large public infrastructure project might spend several months in initiation, including formal procurement. A useful test is to ask what decision the board will make at the end of initiation and what it would need to know to make that decision confidently. Work that does not contribute to that decision probably belongs in a delivery stage.

Proportionality also applies to the products. A small project might produce its management approaches as a few paragraphs in the PID rather than separate documents. An agile project might express its project plan as a release roadmap. What must not be lost is the purpose: the board should be able to see how the project will be controlled, what it will produce, what it will cost and why it is worthwhile.

The request to initiate

When the project brief and the initiation stage plan are ready, the project manager, with the executive's agreement, sends a request to the board to authorize initiation. In many organizations this is a short covering note or a board meeting agenda item. The board then begins directing a project, and its first decision is whether to authorize the initiation stage: lesson 6 examines that decision. Before sending the request, the project manager checks that the board members have been appointed and are available to decide, and that assurance has reviewed the brief.

Ridgeline Water's general manager has delegated authority to approve spending of up to 250 thousand without council approval, so the 160 thousand initiation stage can be authorized by the project board within that delegation. Council approval will be needed later for the main contract, and the project plan will show it as a stage boundary decision. Delegations like these vary between US municipalities and are set out in each city's purchasing code or council resolutions.

Common problems with initiation stage plans

Initiation stage plans fail in predictable ways. Some are too thin: the project manager plans only document writing and forgets that credible estimates need surveys, supplier engagement or data analysis, so initiation overruns. Some are too thick: specialist delivery work creeps in because people are keen to start, and the board finds itself authorizing initiation but effectively committing to the solution. Some forget the board's own time: if the executive cannot attend the end-of-initiation meeting for six weeks, the plan should say so.

Estimating initiation itself

Estimating the initiation stage uses the same techniques as any other estimate, but the products are less familiar to most estimators because they are management products. Three habits help. First, estimate from products, not from a calendar: list each approach, each investigation and each plan, and estimate the effort for each. Second, use the organization's history: if the last three capital projects of similar size spent six to ten weeks in initiation, an estimate of three weeks needs a strong reason. Third, include the effort of other people. The executive, senior users, senior suppliers, assurance and specialists all contribute to initiation, and their time is a real cost even if it is not charged to the project.

Making these contributions visible in the initiation stage plan does two things. It lets the board see the true cost of initiation, which is usually higher than the project manager's time alone. And it gives the project manager a basis for asking department heads to release their staff, because the request is part of a plan the board has approved rather than an informal favor.