How Does PRINCE2 Work?

In our last blog post, we gave you an introductory overview of what exactly is PRINCE2.

A standardised framework for project management, “projects in controlled environments”, or PRINCE2 for short, is the de facto method for the management and design of projects spanning across a multitude of forms, duration and scopes.

Stipulating a focus on the production of the end result, dictating what will be produced, when and by whom, rather than directing how things should be done, renders PRINCE2 highly malleable, scalable and flexible across many project types and industries.

But how does PRINCE2 work?

To understand how PRINCE2 works, it’s first essential to understand how the core values of PRINCE2 act to define a project. Under PRINCE2, a project is defined as a temporary organisation created to generate one or multiple products in accordance with a pre-agreed business case. Which, in basic terms, means that PRINCE2 is committed, through its primary focus on the end result, or business product, to business viability.

A PRINCE2 project is defined by a few parameters, mainly that:


Adapting to the PRINCE2 Project Environment

If a project is deemed to be operable within a controlled PRINCE2 environment, working within the parameters outlined above, the next step is to tailor the PRINCE2 method to project structure in order to gain the strongest, and most successful, outcome.

PRINCE2 structures projects through a scalable structure of three key elements, each focusing on the creation of a durable end product. The three elements are the 7 principles, the 7 themes, and the 7 processes of PRINCE2, which can then be adapted to suit the requirements and specific environment of the project.

Fluidity between method and environment is key. The 7 themes can be adapted to both the form and scope of a project, or the terminology of PRINCE2 can be compared to the language existing within your project’s environment, reducing the number of management products until only the most intrinsic are left - such as the project diary, project status report and project completion report are utilised. Similarly, the roles and processes within PRINCE2 can be reduced or tailored.

Only the principles of PRINCE2 must remain unchanged across all projects.


An Introduction the PRINCE2 Principles, Themes and Processes

The principles, themes and processes of PRINCE2 act as a guideline to keep your project under control, which is fundamentally what PRINCE2 was created to achieve. The 7 principles, themes and processes are largely inextricable, each aiding to inform and define the other, constructing the nexus of the PRINCE2 methodology. The 7 basic principles, such as business justification and management through exception, edify the 7 themes, in risk management or planning, which help, in turn, to define the 7 processes.


The 7 basic principles in PRINCE2

The 7 principles of PRINCE2 are the only part of the framework that must be applied rigidly, in order to use the PRINCE2 framework on a project. They act as a necessary foundation for the framework to be built upon.


1.Continued Business Justification

Before the beginning of the project, the goals and expected value of the project must be decided. These are then used to justify the continuance of the project, through consistent evaluation of the project progress in accordance with the objectives of both the project, and the business.


2.Learning from Experience

PRINCE2 requires the keeping of an experience diary where risks, problems, mistakes made, good experiences, new ideas and improvements are recorded. Acting as the basis of an experience report at the culmination of the project, the diary will aid you and your team in the management of future projects.


3.Defined Roles and Responsibilities

Within a PRINCE2 project, three stakeholders are recognised, each with different interests in the project: entrepreneurs, suppliers and users. The entrepreneur acts as the project sponsor with an expectation of a utility; the user works with and evaluates results; and the supplier produces the results. In each PRINCE2 project, there are clearly defined roles and responsibilities that gear towards the accurate representation of their respective interests. These stakeholders then comprise the steering committee, making the important decisions regarding the project.


4.Overseeing Management Stages

Alongside the planning, execution and oversight stages of the framework, PRINCE2 integrates with a multitude of management stages that require planning and budgeting. Utilising the business case, the steering committee enforces the implementation of the next stage, including the planning, including the budgeting, for it. For every stage there is a requisite stage plan made which links into the project plan to be made accessible to the project team.


5.Management by Exception

Management by exception is a project structure that offers a higher standard of risk management. Defining a set duration, cost, scope and risk, and an acceptable tolerance range, at each level of the hierarchical management structure, and implementing an escalation policy if any of those degrees of tolerance or violated. PRINCE2 ensures a greater level of control over the run of the project.


6.Focus on Products

The aim of PRINCE2 is to create results, which are within the framework, called products. By not stipulating the logistics of the delivery of the product, but focusing on the quality instead, PRINCE2 can be easily combined with other project management methodologies or approaches, like Agile -  and is applicable universally.


7.Adjusting to the Project Situation

PRINCE2 is not a one size fits all approach to project management, the method must be adapted and applied to the benefit of the specific project situation. In collaboration with PRINCE2 trained or experienced project managers, alongside the adjustment guidelines that PRINCE2 provides, the steering committee will make necessary reconciliations to the themes and processes of PRINCE2.


The 7 Themes in PRINCE2

The 7 themes are areas of required knowledge that are necessary to take into account throughout the lifespan of the project. They concern the answers to questions like: why, who, what, when, how what if, what are the effects of, where are we going, and where do we want to go?


1.Business Case

The business case concerns the ‘why’ of the project. Driving the structure and planning of the project, the business case is set by the stakeholders and should be updated at every management stage, becoming more detailed in order to bring the project closer to reality.


Describing the roles and responsibilities that need to be appointed and adjusted throughout the PRINCE2 project, organisation concerns the ‘who’ of the project. Organisation delegates tasks and defines the level of tolerance to which the tasks must be carried out, employs management by exception and navigates interactions between project and business.


Quality represents a universal understanding of the goal of the project, spanning the project team, management and stakeholders. Without a clear articulation of the criteria that constitutes the success of the project, and the delivery of the product, a project is likely to fail. The ‘what’ of the project.


Standardised plans are essential for the working of PRINCE2 projects, from project plans to team plans, and detail the how and the when of the project. From the micro to the macro, plans enable the control of the outcome of the project.


As projects are temporary and only tend to happen once, they contain a high percentage of uncertainty concerning their outcome. Management by exception and continual project evaluation mitigates the potentiality of risk through constant monitoring.


Changes concern the effects that possible issues may have on the project, and the way they should be treated - asking the question, ‘what would happen if?’ In accordance with the management structure of PRINCE2 projects, significant changes should be communicated to the steering committee.


The theme that concerns the constant evaluation of the attainability of the project plan and prescribed outcomes, through a structured decision process, result monitoring and the management escalation process.


The 7 Processes of PRINCE2

The processes of PRINCE2 should direct the production of results and structure the objectives of the project.

1.Preparing a Project

The first stage of the project happens before the project begins, asking if the project is even achievable when assessed alongside the desirable outcomes and predicted cost and scope of the project. The project preparation should be instituted by the project mandate, issued by the leaders of the project, which articulates the tasks that are associated in the setup of the project, including naming the project managers. Who will then create a plan detailing the initiation of the project, the initiation stage, to give to the steering committee, alongside a recommendation on whether to continue or desist.

2.Directing a Project

After the project has been started, the directive stage begins. The steering committee leads the project on a macro level, while the project managers carry out the daily management tasks. In exceptional circumstances, or if a tolerance level is exceeded, only then may a steering committee intervene in the micro running of the project.

3.Initiating a Project

The primary focus of the initiating stage is to create a basis for the steering committee to make a decision on the authorising or rejecting of the proposed project. As the financing of the project requires careful planning and detailed assessment, a stakeholder analysis must take place, alongside the creation of the project planning, stage system and risk, communication and integration strategies. The project documentation is also created, by way of an agreement between the project managers and steering committee.

4.Controlling a Stage

Directing, or controlling a stage refers to the ground level work of the project manager. From authorising and evaluating the status of work packages, to keeping consistent communication with the steering committee and assessing potential risks - escalating or introducing corrective action if necessary - the controlling a stage process is comprehensive.

5.Managing a Product Delivery

All results generated by a PRINCE2 project are referred to as products, which can be distinguished between management products that are used within the project to direct it, and specialised products, or all project results. During this process, the team manager takes on the responsibility of delivering work packages and the strategies through which the project and team managers interact are defined. This process is where the majority of the resources are utilised, and is an assisting process to the ‘directing a stage’ process.

6.Managing Stage Boundaries

PRINCE2 projects are directed through management stages, and are planned and enacted by the project manager. Each stage coming into play when the previous stage has begun to close and consistently evaluated to update the project plan and the steering committee. Stages are how the project’s progress is assessed. If tolerance levels are violated then corrective procedures may be implemented through exception.

7.Closing a Project

Even if a project was shut down before properly concluding, in every PRINCE2 project, the closing process will always round off. Performed by the project manager, it requires they evaluate and conclude the document of experiences, handing them to the line organisation, and create a recommendation for the steering committee to close the project.

After the project has finished, a review plan is drawn up, a steering process is carried out, the conclusion of the project is announced officially and the steering committee disbands.