PRINCE2 Methodology Explained

By Simon Buehring on 18 May 2019

Woman explaining abouut the PRINCE2 methodology.

PRINCE2 Methodology - Introduction

PRINCE2 is the world’s leading structured project management methodology. PRINCE2 is structured to provide clear guidance about the best ways to manage projects. It helps organizations get better control over projects and better return on investment.

The PRINCE2 method is structured into 7 well-defined processes to address typical project management needs.

PRINCE2 consists of 4 integrated elements:

  1. Principles
  2. Themes
  3. Processes
  4. Tailoring to the project environment.

PRINCE2 Methodology - Principles

The 7 PRINCE2 principles are:

1. Continued business justification
Justify every project otherwise it could be a waste of time and/or resources. Even compulsory projects need justification.

2. Learn from experience
Enables organisations to improve their project management abilities. Avoid repeating bad things from previous projects. Repeat the good things.

3. Define roles and responsibilities
Every decision-maker must understand their responsibilities. This avoids ‘passing the buck’.

4. Manage by stages
Break down the project into 'management' stages. These form 'go or no-go' decision points. If the project is still worthwhile, proceed to the next stage. Otherwise close the project.

5. Manage by exception
In PRINCE2 Senior management delegates day-to-day responsibility to a project manager. It delegates authority by setting permitted 'tolerances' – e.g. 10 days +/- 2 days. If a plan will exceed tolerances, it's an 'exception' to be escalated for a decision.

6. Focus on products
The project must deliver the right outputs to achieve the desired outcomes. When planning, focus on whether the products will meet the users' needs.

7. Tailor to the project environment.
All projects are different. Adapt the PRINCE2 methodology to suit the project's needs.

PRINCE2 Methodology - Themes

Themes in the PRINCE2 method are project management areas which must be managed throughout the project. In the PRINCE2 methodology themes equate to Knowledge Areas in the PMBOK Guide® [1].

The PRINCE2 method has 7 themes:

1. Business case
Document the project's justification. Maintain the justification in the form of a business case. It should contain a cost-benefit analysis to to weigh up the benefits versus costs, times and risks.

2. Organization
The highest level of decision-making is the project board. It delegates to a project manager who delegates to team managers. It 'manages by exception' and doesn’t need regular progress meetings with the project manager.

Project assurance monitors the project’s performance and products. It advises the project board and project manager.

A change authority decides about changes. Project support assists project and team managers.

3. Quality
The users must get the right products. Otherwise, they won't get the outcomes and benefits expected. Products must be delivered to user specifications.

4. Plans
Different plans (project, stage, team) are needed by the project board, project and team manager.

Plans define the what, when, who and how much? After approval manage baseline plans under change control.

5. Risk
Risk is any uncertain event which could have a negative or positive impact on the project. Manage risks regularly. Escalate risks to senior management if necessary.

6. Change
Change always happens - either from outside (e.g. new laws) or inside (e.g. users’ requirements change). In PRINCE2 a change authority uses a change budget to pay for changes.

7. Progress
Track progress using regular time-driven reports. Take decisions using ad-hoc reports. Send reports to the next highest management level.

Compare what's happened against what should have happened. Adjust the plan to get things 'back on track'.

PRINCE2 Methodology - Processes

Processes in PRINCE2 describe:

  1. What decisions are required?
  2. Who takes decisions?
  3. What management products (e.g. plans or reports) support decision-making?
  4. When decisions are taken?

The PRINCE2 Processes are where the principles and themes within the methodology get applied. Processes within the PRINCE2 methodology equate to ‘Process Groups’ in the PMBOK Guide®.

The PRINCE2 method has 7 processes:

1. Starting up a project
Decides whether the project’s idea is good or not. This requires a project brief which answers why, what, how and who? (Equates to the Project Charter in the PMBOK Guide®).

2. Directing a project
The project board 'manages by exception' and receives regular and ad-hoc reports. It approves all major plans and commits resources. It authorises the project, management stages and project closure.

3. Initiating a project
The project manager plans the firm foundations for the management and control of the project. He/she develops a project initiation documentation (PID) for project board approval. (Equates to the Project Management Plan in the PMBOK Guide®). It answers detailed questions about: why, what, when, who, how much, what if?

4. Controlling a stage
The project manager manages risks and issues day by day, assigns and checks work done by teams. He/she reports progress to the project board at regular intervals, escalates exceptions and takes corrective actions if needed.

5. Managing product delivery
The team manager gets the team to design, build and test the 'specialist' products (e.g. an IT system). Hands products over as agreed. Reports regular progress to the project manager.

6. Managing a stage boundary
The project manager plans the next stage and reports progress of the stage about to finish.

7. Closing a project
The project manager checks whether users ‘accept’ the project's products. If so, hands products over to the customer. Reports lessons learned and the achievements of the project. Recommends closure to the project board. Closes and archives all project documentation.

PRINCE2 Methodology - Tailoring

The PRINCE2 methodology must be adapted to meet the unique needs of each project by applying the ‘tailor to the environment’ principle.

When tailoring, consider the project’s scale, geography, complexity and level of risk, and the organisation maturity and corporate culture.

Summary

PRINCE2 is a proven methodology used by organisations globally for over 20 years. It is continuously being improved as project management practices evolve.

To learn more, consider taking a PRINCE2 course to gain understanding of this successful project management methodology.

[1] The PMBOK Guide® (from the Project Management Institute (PMI®)) is a project management standard describing project management techniques, processes and knowledge areas.

PMI and the PMBOK are registered marks of Project Management Institute, Inc.

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