PRINCE2 methodology guide
This guide forms a detailed summary of the key elements of the PRINCE2 project management methodology. It is useful for people seeking more than a brief overview of the methodology and is an excellent guide for people taking a PRINCE2 certification course, or studying for their PRINCE2 exams whether PRINCE2 Foundation or PRINCE2 Practitioner.
The guide is based upon the PRINCE2 project management’s latest version – the PRINCE2 7th edition.
About PRINCE2 project management
PRINCE2 project management provides a clear, structured approach for managing projects from start to finish. Its processes help project teams maintain control, align project outputs with business objectives, and ensure that projects continue to provide value.
By following defined principles, practices, processes, and roles, project teams can reduce risks, improve communication, and avoid having to reinvent the way projects are managed each time.
The PRINCE2 methodology is described in the PRINCE2 manual, which provides guidance for managing projects in a consistent and controlled way.
The 5 key components of the PRINCE2 project management methodology are:
- Principles
- Practices
- Processes
- People
- Tailoring
Principles
Central to PRINCE2 project management are the seven PRINCE2 principles. Understanding these principles is about equipping oneself with a mindset and tools that are essential in today’s project environments. Think of these principles as the foundation stones upon which the rest of the methodology is built. They must never be compromised or removed – they must be applied throughout everything that is done on a project.
Ensure continued business justification
A project must always prove its worth, from inception to delivery. The idea here is straightforward: if a project cannot maintain its balance of costs, risks, and benefits to remain both viable and desirable, then it should not proceed. It’s not enough to justify a project at the start; its business case must be reassessed constantly as the project moves forward.
Learn from experience
Humans tend to repeat familiar mistakes, a pattern that the methodology seeks to avoid with this principle. A project manager must actively seek out lessons throughout the project lifecycle, ensuring that knowledge is captured, managed, and shared effectively amongst the project team and the wider organisation.
Every stage in a project should contribute new learnings to this repository, which then becomes an asset for both the current project and future ones.
Define roles, responsibilities, and relationships
Clarity is king in project management. In a well-managed PRINCE2 project, there’s no ambiguity about each team member’s contributions and duties. Defined roles and responsibilities help prevent common pitfalls, such as a lack of clear leadership or murky accountability, which can cause projects to falter or fail.
Manage by exception
This principle is about efficiency. By establishing clear tolerances for project objectives – such as time, cost, quality, scope, risk, and benefits – these limits of delegated authority empower managers to act decisively when those tolerances are forecast to be exceeded (known as an ‘exception’).
This saves senior managers’ time because the day-to-day project management is done by the project manager, who keep the project board in the loop on progress using regular highlight reports.
Manage by stages
The methodology divides projects into ‘management stages’, creating natural checkpoints for evaluation and decision-making. This principle ensures that the project is thoroughly planned during the initiation stage and that subsequent stages are monitored and controlled effectively. Stages form “Go” or “No go” decision points which enable the project board to exercise control on a stage-by-stage basis.
Focus on products
Meeting or exceeding the agreed quality criteria for products is a path to achieving the intended benefits and satisfying stakeholders’ expectations.
The PRINCE2 methodology prioritises the identification and delivery of the project’s products. By adopting product-based planning, the project team is better positioned to manage scope and avoid issues related to acceptance and user satisfaction.
Tailor to suit the project
This principle celebrates the methodology’s versatility. Each project is unique, with its own cultural, geographic, and risk considerations. The ability to tailor the methodology to fit these specifics is one of its most valuable characteristics.
The goal of tailoring is to make the methodology work for the project, not to enforce a rigid, template-driven approach.
PRINCE2 practices
PRINCE2 project management contains 7 PRINCE2 practices (formerly ‘themes’ before PRINCE2 7th edition) which offer practical tools and techniques which are fully adaptable for project managers on every project.
The practices guide you towards managing projects with confidence, ensuring you can define scope, organise resources, maintain quality, manage risks, resolve issues, and measure progress effectively. These practices are not standalone; they work in tandem, providing a holistic approach to project management.
Business case
The main purpose of the business case practice is to ensure that there is a good reason for starting a project and for continuing with it. It does this by considering whether the project is worth the investment in terms of its expected benefits, costs, risks and timescales.
The business case is not something which is prepared once and then forgotten. It should be reviewed throughout the life of the project to make sure that the project remains viable and continues to support the organisation’s objectives. If circumstances change, the business case helps managers and stakeholders decide whether the project should continue.
The business case is also closely linked with benefits management because it explains what benefits the project is expected to deliver and when these benefits should be realised.
In this way, the business case helps ensure that projects are started for the right reasons and continue to remain justified throughout their lifecycle.
Organizing
The main purpose of the organising practice is to make sure that everyone involved in the project understands their role and responsibilities. It defines who makes decisions, who performs the work, and how people communicate with one another throughout the project.
PRINCE2 project management defines several important project roles. These include the project board, which consists of the executive, senior user and senior supplier, as well as the project manager, team managers and project support. Each role has its own responsibilities so that there is clear accountability for managing, directing and carrying out the project work.
It is also important that suitable people are selected for these roles. They should have the skills, experience and knowledge needed to perform their responsibilities effectively.
By defining clear roles, responsibilities and communication channels, the organising practice provides the management structure needed to run the project effectively and helps ensure that decisions are made by the right people.
Plans
The main purpose of the plans practice is to define how, when and by whom the project’s products will be delivered. Planning helps the project management team understand what needs to be done, what resources are required, how much the work will cost and when it should be completed.
PRINCE2 project management uses several types of plans. A project plan provides an overall view of the project and is used as a baseline for monitoring progress. A stage plan provides more detailed information for managing an individual stage. A team plan describes the work to be carried out by a team. If the project is forecast to exceed agreed tolerances, an exception plan may be produced to replace the plan that is no longer achievable.
Plans also support communication and control. They provide a basis for monitoring progress, managing risks and ensuring that the required products are delivered to the expected quality.
Planning should be appropriate to the size, complexity and circumstances of the project. Since circumstances can change, plans should also be reviewed and revised when necessary throughout the project.
Quality
The main purpose of the quality practice is to make sure that the products created by the project are ‘fit for purpose’ and meet the expectations of the people who will use them. This means defining clearly what quality means for each product and how it will be checked.
Quality planning begins by identifying the customer’s quality expectations and turning these into measurable quality criteria. These criteria provide the basis for deciding whether a product is acceptable.
PRINCE2 project management distinguishes between quality assurance and quality control. Quality assurance provides confidence that the project is following the correct processes and standards. It is normally performed independently of the project management team. Quality control is concerned with checking the products themselves, for example through reviews, inspections and testing.
The quality practice is closely linked to the methodology’s focus on products because products must have clearly defined quality requirements and acceptance criteria.
By planning, checking and assuring quality throughout the project, the project team can identify problems early and increase the likelihood that the finished products will meet user expectations.
Risk
The main purpose of the risk practice is to identify and manage uncertainties which might affect the project. These uncertainties can be threats, which could have a negative effect, or opportunities, which could have a positive effect.
Risk management involves identifying risks, assessing how likely they are to occur and what impact they might have, and then deciding how to respond to them. Responses to threats might include avoiding, reducing, transferring or accepting the risk. Opportunities might be exploited, enhanced, shared or accepted.
Risk management is not a one-off activity. Risks should be reviewed throughout the life of the project because existing risks can change and new risks can arise.
PRINCE2 project management uses a risk register to record identified risks, their status and the actions being taken to manage them. The project should also define how risks will be managed and who is responsible for them.
By managing risks in a structured and continuous way, the project team is better able to deal with uncertainty and increase the likelihood of achieving the project’s objectives.
Issues
The main purpose of the issues practice is to make sure that problems, concerns and proposed changes are identified, assessed and managed in a controlled way. Issues can arise at any time during a project and, if not managed properly, can affect its cost, timescale, quality or ability to achieve its objectives.
When an issue arises, it should be recorded in the issue register and then assessed. PRINCE2 project management identifies three main types of issue: a request for change, an off-specification, and a problem or concern.
A request for change proposes a change to something that has already been agreed. An off-specification occurs when a product does not, or is forecast not to, meet its agreed specification. A problem or concern covers other matters which might affect the project.
Once assessed, an appropriate response can be agreed. Some issues can be dealt with by the project manager, while more significant issues may need to be escalated if they exceed agreed tolerances.
By managing issues in a structured way, the project team can respond to problems and changes without losing control of the project.
Progress
The main purpose of the progress practice is to monitor how the project is performing compared with its plans and to make sure that it remains viable. This enables the project management team to identify problems early and take action when the project begins to move away from what was agreed.
Progress is monitored by comparing actual performance against agreed baselines for areas such as time, cost, scope, quality, risk, sustainability and benefits. Regular reports and reviews provide information about how the project is progressing and whether its objectives are still achievable.
PRINCE2 project management also uses tolerances to define how much deviation from a plan is acceptable. As long as the project remains within these tolerances, the project manager can continue to manage it. If a tolerance is forecast to be exceeded, the matter must be escalated to the appropriate level of management.
By monitoring progress regularly, the project team can make informed decisions, deal with problems before they become more serious, and keep the project under control.
PRINCE2 processes
The PRINCE2 project management methodology also describes 7 PRINCE2 processes which define the responsibilities and timings for decision-making within the project. This clarity ensures that the principles and practices of the methodology are applied correctly and consistently. The systematic approach outlined by these processes supports the effective governance of project management, making certain that every decision and action contributes to the project’s success.
Each process is tied closely to a specific project management team role, ensuring accountability and clarity within the project structure. The processes also serve to apply the methodology in a practical context, showing how principles and practices come together to govern a successful project.
For a detailed view of how all the processes fit together download this PDF of the PRINCE2 project management lifecycle.
Starting up a project
The main purpose of the ‘starting up a project’ process is to decide whether the project is worthwhile and viable before too much time and money are committed to it.
The process begins when a project mandate is received from the commissioning authority. This provides the initial information about the project and gives the project executive a basis for assembling the project management team and preparing an outline business case.
The aim is not to plan the whole project in detail. Instead, enough information is gathered to allow the project board to decide whether it is worth proceeding to the initiation stage.
Two important outputs are produced. The project brief describes the project’s scope and expected products, while the initiation stage plan describes the work needed to carry out the initiation stage.
Lessons from previous projects should also be considered so that useful experience can be applied from the beginning.
By doing this work before the project is fully initiated, PRINCE2 project management helps organisations avoid wasting resources on projects which may not be worthwhile or achievable.
Directing a project
The main purpose of the ‘directing a project’ process is to enable the project board to provide overall direction and control while leaving the day-to-day management of the project to the project manager.
The project board is accountable for the success of the project. It makes the important decisions about whether the project should start, continue from one management stage to the next, or close.
Its activities include authorising initiation, authorising the project, authorising each management stage and authorising project closure. The board also considers significant issues, risks and changes which have been escalated by the project manager.
PRINCE2 project management applies the principle of manage by exception. This means the project board does not become involved in routine project management while the project remains within agreed tolerances. Instead, it concentrates on key decisions and intervenes when necessary.
By providing direction at important points throughout the project, the project board helps ensure that the project remains viable, properly controlled and aligned with the organisation’s objectives.
Initiating a project
The main purpose of the ‘initiating a project’ process is to establish a firm foundation for the project before significant time and money are committed.
During this process, the project manager develops the project initiation documentation (PID). This brings together the information needed to understand how the project will be managed and controlled. It includes the detailed business case, the project plan, and the approaches for managing areas such as risk, quality, issues and communication.
The process also ensures that there is a common understanding of the project’s objectives, scope, expected benefits and risks. This gives the project management team a clear basis for managing the project once it is underway.
When the PID has been completed, it is submitted to the project board. The board then decides whether there is sufficient justification and a suitable management framework in place to authorise the project.
By establishing these foundations at the beginning, the ‘initiating a project’ process helps ensure that the project is properly planned, understood and controlled before significant resources are committed.
Controlling a stage
The main purpose of the ‘controlling a stage’ process is to enable the project manager to manage the day-to-day work of a management stage and keep it within agreed tolerances.
The project manager authorises work to be carried out by teams using work packages and then monitors how that work is progressing. Information received from team managers is compared with the stage plan so that the project manager can identify any problems or deviations.
The project manager also reviews risks and issues, takes corrective action where necessary, and reports progress to the project board through highlight reports. As long as the stage remains within its agreed tolerances, the project manager has the authority to manage it without involving the project board in day-to-day decisions.
If a tolerance is forecast to be exceeded, the matter must be escalated to the project board.
By continually monitoring work, risks, issues and progress, the ‘controlling a stage’ process helps the project manager keep each stage on track and ensure that it continues to support the project’s objectives and business case.
Managing product delivery
The main purpose of the ‘managing product delivery’ process is to control the link between the project manager and the team managers who are responsible for delivering the project’s products.
The process begins when a team manager accepts a work package from the project manager. The work package defines what products are required, the quality standards they must meet, and any agreed constraints such as time and cost.
The team manager then organises and carries out the work needed to produce the products. During this time, progress is monitored and reported to the project manager so that any problems can be identified and dealt with.
Once the products have been completed and have met their agreed quality requirements, the team manager delivers the completed work package back to the project manager.
In this way, the ‘managing product delivery’ process helps ensure that work is properly agreed, carried out and delivered, while maintaining a clear relationship between the project manager and the teams doing the work.
Managing a stage boundary
The main purpose of the ‘managing a stage boundary’ process is to review the current management stage and prepare for the next one.
As a stage approaches its end, the project manager reviews what has been achieved and updates the project plan and business case to reflect the current position of the project. The project manager also prepares the stage plan for the next management stage.
An end stage report is produced to show how the current stage performed against its plan. This, together with the updated business case, project plan and next stage plan, provides the project board with the information it needs to decide whether the project should continue.
The process therefore provides an important point of control. Before committing resources to another stage, the project board can check that the project remains worthwhile and viable, that its risks remain acceptable, and that the next stage has been properly planned.
If the project is still justified, the project board can then authorise the next management stage.
Closing a project
The main purpose of the ‘closing a project’ process is to make sure that the project is brought to an end in a controlled and orderly way.
Before the project can close, the project manager confirms that the project’s products have been accepted by the users and that any outstanding work has been identified. The project manager also checks that the organisation is ready to support and maintain the products after the project has finished.
The project’s performance is then reviewed against its original plans and objectives. Any benefits already achieved are assessed, and arrangements are made for reviewing benefits which will only be realised after the project has closed.
An end project report summarises how the project performed, while a lessons report records what went well and what could be improved in future projects.
By closing the project formally, PRINCE2 project management ensures that responsibilities are clear, unfinished work is dealt with, and useful lessons are not lost once the project team is disbanded.
People in PRINCE2
People are at the centre of every project. Projects depend on people with different skills, experience, roles and responsibilities working together to achieve a common objective. For this reason, PRINCE2 project management places considerable emphasis on leadership, collaboration, communication and stakeholder engagement.
Projects often introduce changes to the way an organisation works. These changes can affect employees, managers, customers, suppliers and other stakeholders. The project team therefore needs to understand who will be affected and how they are likely to respond.
Leadership is particularly important when change is involved. Project leaders need to explain why the change is necessary, involve people in the process and help them move from the current way of working to the new one. Without effective leadership, resistance to change can make it difficult for the project to achieve its intended benefits.
Stakeholder engagement is also important. Stakeholders should not simply be kept informed. Where appropriate, they should be involved in discussions, decision-making and the development of project products. This helps ensure that the project takes account of their needs and increases the likelihood that its products will be accepted.
Effective project teams also depend on clear roles and responsibilities, open communication and good working relationships. Since project teams are often temporary and may include people from different parts of an organisation, project managers need to create an environment in which people can work together effectively.
By recognising the importance of leadership, collaboration, communication and change, PRINCE2 project management helps project teams manage the human factors which can have a major influence on project success.
Tailoring PRINCE2
No two projects are the same, so the PRINCE2 methdology should be tailored to suit the circumstances of each project. Tailoring means adapting the method so that it provides enough control without creating unnecessary processes or documentation. A classic example is of a project where the delivery team uses agile approaches such as Scrum. A suitable way of tailoring would be to incorporate the agile ways of working into PRINCE2 – PRINCE2 Agile.
The way PRINCE2 project management is tailored will depend on factors such as the size and complexity of the project, the organisation’s structure and culture, commercial relationships, delivery methods, sustainability requirements, and the experience of the project team.
Processes, practices, roles and management products can all be tailored. For example, on a small project, one person might perform several roles and project documentation may be simplified. On a larger or more complex project, roles may need to be separated and more detailed controls and documentation may be required.
Controls should also reflect the needs of the project. This includes deciding how often reports are produced, when reviews take place, and what tolerances are appropriate for areas such as time, cost, quality, scope, risk and benefits.
Tailoring should also take account of external factors such as contracts, regulations and industry requirements. If the project forms part of a programme or portfolio, it may also need to follow standards or controls set by the wider organisation.
The important point is that tailoring should make PRINCE2 project management more useful, not weaken it. The seven principles must still be applied. A well-tailored approach gives the project team enough structure and control while allowing them to manage the project in a practical way.
A list of PRINCE2 templates for the management products are available for download and can be easily tailored to your project.
Final thoughts
PRINCE2 project management has been used successfully for many years because it provides a structured but flexible way to manage projects. Its strength lies in the fact that it can be tailored to suit projects of different sizes, industries and levels of complexity.
However, PRINCE2 project management needs to be understood and applied properly. If it is used too rigidly, it can create unnecessary bureaucracy rather than helping the project team.
As project management continues to evolve, the PRINCE2 methodology has also changed to remain relevant to modern ways of working.
For project managers who want to use the method effectively, PRINCE2 training and certification can provide a better understanding of how its principles, practices and processes work together. This can help project managers apply PRINCE2 project management confidently and adapt it to the needs of their own projects.
Further reading about the PRINCE2 methodology can be found on the PRINCE2 resources page.
Infographic
