PRINCE2 methodology

Introduction

What is the PRINCE2 methodology?

PRINCE2 is a globally recognised project management methodology ^[1] which is now in its 7^th edition. It is the best known of all project management methodologies.

PRINCE2 provides a structured, process-driven approach to managing projects, ensuring they deliver outcomes which realise a return on investment in the form of benefits.

Methodology

A ‘methodology’ is a structured system of practices and rules used by experts in a specific field. For project management, it’s a blueprint used by teams to start, plan, execute, and conclude projects, ensuring a systematic and successful project delivery.

What’s in the PRINCE2 methodology?

PRINCE2 is a methodology because of its thorough, procedural approach to project management. It offers a roadmap for any project, covering everything from start to finish.

Underlying PRINCE2 are principles, people, practices, and processes that must be tailored to each unique project context to steer the team throughout the project.

The PRINCE2 methodology is structured to address typical project management needs and consists of 5 integrated elements:

1. Principles
2. People
3. Practices
4. Processes
5. Project context.

The PRINCE2 manual (Managing Projects Successfully with PRINCE2) describes in detail the five main elements within the methodology. They are described below.

Principles

PRINCE2’s principles serve as its foundational pillars, confirming if a project is genuinely managed using PRINCE2. They are universal, self-affirming, and enable effective project management practices.

Applying the PRINCE2 principles is a requirement if a project is to be a PRINCE2 project. The principles act as immutable laws that cannot be removed from a project.

The 7 principles within the methodology are described below.

Ensure continued business justification

A project is only successful if it realizes the expected benefits in return for its investment of money, time, and resources. Therefore, it is imperative that all investment decisions are based upon where the project is on course to achieve these objectives. If it isn’t, then it should be closed.

Learn from experience

The experience of previous projects should be used to guide the practices on the current, and later projects.

Define roles, responsibilities, and relationships

Everyone involved in the project management team must be clear what they are accountable and responsible for.

Manage by stages

A project is broken down into 2 more management stages which form ‘stop/continue’ decision points. Any decision to continue necessitates the commitment of money and resources to the next stage.

Manage by exception

Authority to take decisions is granted by a higher authority to a lower authority which is an efficient use of senior managers’ time. The higher authority can be kept informed of progress via regular reports, but at the same time, the lower management level can manage with the delegated boundaries. If these boundaries are forecast to be exceeded, this exception is escalated to the higher level for a decision.

Focus on products

Focusing on delivering on time and within budget cannot be done without first understanding what is to be delivered. All planning starts by focusing on products to understand what the plan should deliver.

Tailor to suit the project

Every project is different, therefore the methodology must be applied differently and sensibly in all situations.

People

Projects involve people, both direct participants and those impacted by a project. Recognizing their needs, skills, motivations, and the relationships among them is essential for setting up and managing the project effectively. The methodology describes how the people impacted by the project’s outcomes, must ‘buy in’ to the proposed changes, otherwise the changes will be unsuccessful, and the project will be a wasted investment.

Practices

The practices within the methodology are aspects of project management that are addressed throughout a project. They encompass areas like time, cost, risk, issues, quality, sustainability, and scope, common in other project management standards. These practices offer a decision-making framework, ensuring the project’s viability, desirability, and achievability from start to finish.

For anyone familiar with the Project Management Body of Knowledge (PMBOK)^®, the PRINCE2 practices are very similar to the knowledge areas of the PMBOK^®[2].

The 7 practices in the PRINCE2 methodology are described below.

Business case

This practice focuses on applying the ‘ensure business justification’ principle. It describes documenting the project’s rationale, initially in an outline business case, which is detailed further during the first management stage. The business case includes a cost-benefit analysis comparing project benefits against costs, timescales, and risks. It’s updated at each management stage’s end to guide the decision to continue or stop the project.

Organizing

This practice details the various project management team roles. Within PRINCE2, the project board is the top decision-making body, consisting of the project executive, senior user, and senior supplier.

It tasks the project manager with the day-to-day project management, who operates within set tolerances. The project manager, in turn, assigns work packages for delivery by a team manager.

The board operates on a ‘manage by exception’ principle, eliminating regular meetings with the project manager by receiving regular reports. Project assurance monitors project performance and advises both the project board and project manager.

Plans

PRINCE2 recommends distinct plans for each level of the project management team. The project board uses a high-level project plan to oversee project progress stage by stage. The project manager relies on a more detailed stage plan for in-stage progress, while team managers need detailed team plans to monitor their work package. Each plan is approved by the next highest management level.

For planning, PRINCE2 suggests using product-based planning, emphasizing the ‘focus on products’ principles to identify products before using activity-based tools like Gantt charts.

Plans outline the “what, when, who, and how much?” Once approved, plans are set as baselines and are subject to change control.

Quality

The project produces products which will later be used by users operating within the regular business operations. To achieve the expected outcomes and benefits, users need the correct products based on agreed specifications. PRINCE2 emphasizes planning to meet the anticipated quality standards, which must be actively overseen and managed.

Risk

Risks are uncertain events that can positively or negatively affect a project. Every project faces risks that need proactive identification and management. A risk management procedure should be set up to handle risks consistently. Risks surpassing the set tolerance level must be brought to senior management’s attention for resolution.

Issues

Projects inevitably face issues and changes, whether external, like new laws, or internal, such as shifting user requirements. PRINCE2 provides guidance for how issues can be managed to avoid them damaging the project, and how changes can be incorporated using cost-effective ways that contribute to the project’s outcomes and benefits.

Progress

PRINCE2 identifies two types of controls: time-driven and event-driven.

Time-driven controls, like regular highlight reports from the project manager to the board, track progress routinely (e.g., weekly). They compare actual progress to expected outcomes, facilitating necessary decisions and adjustments.

Event-driven controls arise in response to specific events. For instance, an exception report is created when a tolerance threat is predicted. These reports inform decision-making in response to events and are directed to the management level with decision-making authority.

Processes

Processes within the PRINCE2 methodology outline the decisions to be made, by whom, and when during the project. The processes span from just before the project begins to its closure, aligning with management stages that act as ‘stop/continue’ major decision points. These processes ensure a structured project progression, with investment decisions made on a stage-by-stage basis.

The PRINCE2 methodology outlines 7 processes which address:

• Required decisions
• Decision-makers
• Supporting management products
• Timing of decisions.

These processes are where PRINCE2’s principles and practices are implemented and equate ‘Process Groups’ in the PMBOK^®. The processes ensure methodical project progression, from before the project begins, through to when the project is closed.

Starting up a project

Focuses on project idea feasibility. It results in a project brief answering why, what, how, and who. A positive decision leads to the project’s initiation stage.

Directing a project

The project board makes decisions based on regular and ad-hoc reports, approves plans, commits resources, manages the change budget, and addresses key project risks.

Initiating a project

The project manager puts in place the firm foundations for the project. The project initiation documentation (PID) is developed, akin to the Project Management Plan in the PMBOK^®. It details project specifics like scope, cost, duration, benefits, and roles and responsibilities.

Controlling a stage

Here, the project manager handles daily risk and issue management, delegates tasks, monitors work, reports regular progress to the project board, and ensures adherence to the stage plan.

Managing product delivery

Conducted by a team manager, this involves overseeing work packages, delivering products, and reporting progress through regular checkpoint reports.

Managing a stage boundary

As a stage ends, the project manager prepares for the next stage, reports progress, updates the business case, and revises forecasts. This informs the project board’s decision on project continuation or closure.

Closing a project

The project manager checks product acceptance and facilitates handover. Lessons learned are documented, and an end project report is prepared. Upon project board’s approval, the project is archived and closed. This process can also be invoked for premature project closures.

Project context

Every project is unique. In recognition of this fact, the PRINCE2 methodology must be applied sensibly in all projects. Applying PRINCE2 on one project context, does not mean it should be applied the same way on another. This is where ‘tailoring’ comes in.

Tailoring is the adaptation of the method to fit each project’s unique context. Tailoring can be influenced by organizational culture and management styles. While all aspects of PRINCE2 can be customized, the principles remain unchangeable due to their inviolable nature.

Tailoring can be done to the processes and practices, but also to the roles and responsibilities, and management products.

Tailoring roles and responsibilities

The PRINCE2 methodology defines a set of responsibilities for every member of the project management team. These responsibilities can be tailored by sharing (multiple people perform a role) or combining (one person performs multiple roles).

Project board

Holds overarching authority over the project, representing all stakeholders: business, users, and suppliers. It is led by the executive (representing the funding organization) who holds the final decision-making power. Includes the senior user, representing the end-users, and the senior supplier, representing product providers.

Project executive

Holds the primary decision-making power, appointed by the business. Chairs the project board.

Senior user

Represents the interests of those utilizing or maintaining the project’s end products.

Senior supplier

Speaks for those designing, building, and testing the project’s specialized products.

Project assurance

Each board member oversees this, ensuring the project’s proper conduct, realistic plans, and accurate reporting. Assurance responsibilities can be delegated.

Project manager

Appointed by the executive, they handle daily project management within set boundaries, getting the work done by teams, addressing issues and risks.

Team manager

Leads a specialist team to design and build project products, operating within an agreed work package and updating the project manager regularly.

Project support

Offers administrative aid to the project and team managers, along with technical support, such as tool usage guidance.

Tailoring management products

The PRINCE2 manual also describes a set of management products that can be used throughout the project to assist with planning, monitoring and reporting by the project management team. These management products are available as templates which can also be tailored, both in their content, structure, and the form they take.

When to use the PRINCE2 methodology?

The PRINCE2 methodology is versatile, suitable for planning, managing, and controlling any project across all sectors. It ensures desired outcomes and benefits, applicable to both agile and traditional projects. For maximum effectiveness, begin using PRINCE2 just before a project’s onset and continue until its completion.

For agile projects, PRINCE2 Agile is advised.

Why is the PRINCE2 methodology helpful?

The PRINCE2 methodology aids organizations in maximizing their investments by preventing wasted resources on low-yield projects. It guides decision-makers through pivotal questions, such as:

• What’s our goal?
• Are the outcomes worth the investment?
• Do we have clarity on our objectives and the means to achieve them?
• Do we need external help?
• Estimated duration and cost?
• What resources are required?
• Potential risks and benefits?
• Expected quality?
• How will we handle changes?
• Who’s responsible for decisions?
• What are individual accountabilities?

Addressing these questions enhances the likelihood of project success.

Summary

PRINCE2 has been a trusted global project management methodology for over 25 years and continually adapts to the evolving landscape of project management.

Any methodology, including PRINCE2, can fail if not aligned with its specific application environment. PRINCE2’s tailoring principle ensures adaptability to each project’s unique needs. While its misapplication can be restrictive, when used correctly, the PRINCE2 methodology fits any project size or type, enhancing project management outcomes and return on investment.

For a deeper understanding, consider enrolling in a PRINCE2 course.

References

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