The short answer is yes, they are quite compatible. PRINCE2 is a generic Project Management Methodology, while Agile Methods are tailored to suit software application development projects. The question as to how they are compatible requires knowledge of both methodologies. PRINCE2 would consider a software application, for example, to be a Specialist Product. The Agile Method would primarily be contained within the “Managing Product Delivery” process if PRINCE2 is embedded in an organization. In this process, within the PRINCE2 Method, a Team Manager would likely be appointed. In this case, the Team Manager could be a Certified Scrum Master (CSM) managing the delivery of the software application product. The Team Manager would report to the Project Manager, who would in turn report to the Project Board, consisting of the Senior Supplier, Senior User, and Project Executive.
The “Controlling a Stage” process would be the primary link between the PRINCE2 Method, and the product being developed using Scrum. The Team Manager would send the Project Manager Checkpoint Reports, which are time driven reports updating the Project Manager on the status of the product deliverables. The Project Manager would in turn forward the Project Board (Senior Supplier, Senior User, and Project Executive) Highlight Reports. If the Project is ever out of tolerance, the boundaries set for the project as a whole (and for each Management Stage), an Exception Report may be created for assessment. If the Project Board decides to prematurely end the project, the project would be moved into the “Closing a Project” process. If however, the Project Board decides the project is still viable and can meet the objectives set out in the Business Case, an Exception Plan may be the basis for the next Management Stage. This case illustrates the “Management by Exception” theme, allowing the Project Board to be well informed with decision making authority (exercised in the “Directing a Project” process), but not overly burdened with the details in the day to day management of the project.
The separation of Management and Technical Stages is unique to PRINCE2. Management Stage boundaries allow the Project Board to make assessments regarding the continued business justification of the project. Technical Stages may overlap Management Stages, in the case of Scrum, a Technical Stage would be a Sprint. Technical Stages pertain to the development of Specialist Products, while Management Stages allow for control over the project. The integration of these methodologies would allow the Project Manager to focus on the day to day management of the project, while allowing the Scrum Master to focus on the day to day management of product delivery. As projects grow larger, more complex, and carrying more risk than ever, I can see a day where this integration of methodologies will become commonplace. This is primarily due skill sets becoming ever more specialized, allowing for more effective and efficient utilization of resources. Smart organizations will see the long term benefits of adoption, and leverage it as another source of a sustainable competitive advantage, as projects are the primary source for positive change in an organization.