PRINCE2®: PRINCE2 Principles, each PRINCE2 project should include the 7 principles, and if one of these principles is missing from the project, it cannot be considered a PRINCE2 Project. The PRINCE2 principles can be defined as: a framework of good project practice for those involved in a project.
From a PRINCE2 point of view, PRINCE2 principles are a core value that must always exist in a PRINCE2 project. To sum it up, think of PRINCE2 principles as guides for good practice. There are seven principles below:
- Continued business justification: The project should be beneficial, and stay so during the project
- Learn from experience: Keep learning to avoid re-inventing wheels
- Define roles and responsibilities: Each project team member should know what others expect from them and what they can expect from others
- Manage by stages: Projects should be broken down into stages, and planned/executed/controlled accordingly which makes them easier to manage
- Manage by exception: There should be a well-formed system for delegation and escalation to allow all project levels to get on with their work.
- Focus on products: Focus on getting a good product description rather than on activities
- Tailor to suit the project environment: Using PRINCE2 out of the box without paying attention to the project environment will not succeed as there will be to much administration overhead.
1) Continued business justification (PRINCE2 Principles)
A PRINCE2 project must always have continued business justification; therefore each project should have a Business Case. The reason to start the project must make sense from a business point of view, and there must be a clear Return on Investment.
For example, the project will cost €20,000 but over the first 2 years, it will deliver a savings of €100,000 for the company. “Does the project have business justification?” is the same as asking “Does the project have a valid Business Case?” If at any time during the project, the expected Return on Investment falls then the project will most likely be stopped.
The Business Case document details the full Business Case, showing why the project should be done, the costs, the expected benefits and timescales. This information is also referred to as the business justification information. As the Business Case document is one of the first documents created in a project, it will prevent bad projects from starting. The business justification is then checked throughout the lifetime of the project and this can happen at the end of each stage (verification points).
You may be thinking that some project do not have a real business case. e.g. Upgrade a financial application to support new government legislation. You can consider the cost of now complying with the legislation and then ask “What will happen if we do not comply?” For example, the cost of not complying with new legislation might affect the company’s market share, or the company could lose clients. This could therefore be given a monetary value.
The Business Case is regularly reviewed during the project to check its continued business justification.
2) Learn from experience (PRINCE2 Principle)
PRINCE2 project teams should learn from previous projects so mistakes are not repeated. Most companies do not have a proper process in place for this but Project Managers should therefore take initiative to uncover previous lessons learned from as many stakeholders as possible and take these into account during the life of the project.
Projects are unique, meaning that there is always something new. This creates an element of risk in each project. We can also say that each project has some unknowns, which must be investigated. Now you can see why PRINCE2 urges the project team to take the necessary initiative to learn from similar projects that may have been done in the same company and if not, then get advice from other external people (for example, bring in external consultants).
“Learn from experience” covers the full lifetime of the project, from Starting Up a Project, as the project progresses until the Project Closes. Any lesson learned during the project should be documented. Documented lessons should be passed on so they are available for future projects.
3) Define roles and responsibilities (PRINCE2 Principles)
In any project, people need to know what to do and what they can expect from others. From my perspective, this is one of the most important PRINCE2 principles to get right from the beginning. PRINCE2 states that a project should have defined and agreed roles and responsibilities within an organization structure that engages the Business, User and Supplier Stakeholder interests.
Projects can have people from different departments or companies, so it is important that the project has a clear team structure, otherwise it might be impossible to manage the project.
According to PRINCE2, a project has 3 primary stakeholders. They are the Business sponsors, Users and Suppliers.
- Business sponsors are those who make sure the project delivers value for money.
- Users will use the products once created, so they receive the benefits.
- Suppliers provide the resources and expertise to the project and produce the products.
This principle states that these three primary stakeholders must be correctly represented in the Project Management Team and in the Project Board.
Each role in the project management team has a defined role and agreed responsibility, so to summarize the principle of “Defined Roles and Responsibilities,” a good Project Management structure answers the questions “What is expected of me?”, “What can I expect from others?”, and “Who makes what decisions?”
4) Manage by stages (PRINCE2 Principles)
A good way to go about doing any large task or project is to break it up into manageable chunks. In PRINCE2 we refer to these manageable chunks as stages — actually, they are called Management Stages. A PRINCE2 Project is planned, monitored and controlled on a stage-by-stage basis. These Management Stages are separated by Decision Points (also known as “Control Points”) by the Project Board.
At the end of each stage, the Project Board assesses the performance of the last stage, the Business Case and the plan for next stage, and decides whether to proceed with the next stage. The Project Board has greater control over the project when the number of stages is high, but this also gives them more work. Fewer stages in a project indicate that the Senior Management will have less control and a lesser amount of work for the Project Board.
There are advantages to working in stages, and they provide a good approach to project planning, as they:
- Allow the project to be divided into a number of manageable chunks.
- Have a high-level Project Plan for the whole project and a very detailed Stage Plan.
- Make sure that plans for future stages can learn from previous stages. For example, if one team delivers their products quicker than expected, then this can be taken into account when creating the plan for the next stage.
There are a minimum of two management stages in a project: the Initiation Stage and one further Management Stage. The Closing a Project process is then the last part of the 2nd Stage in a two-stage project. A PRINCE2 project is planned, monitored and controlled on a stage-by-stage basis.
5) Manage by exception (PRINCE2 Principles)
This is a term that people who are new to PRINCE2 will most likely not have heard before. As it is important that you understand it, I will start a simple explanation and then give you the PRINCE2 definition. When it comes to factors like time, cost, and scope, the Project Manager has some tolerance to play with before they have to advise the Project Board that there is or might be a problem (e.g. costs could change ±10%). If the problem is small and it remains within the tolerances (e.g. the costs increase by 2% — less than the 10% tolerance), then the Project Manager can deal with it and doesn’t have to alert the Project Board and take up their time.
Manage by Exception is used by each level in the Project Organization to manage the level below. The layer below should only notify the above management layer if there is a big issue that is outside their tolerance. The PRINCE2 name for a big issue is Exception, which means the issue is outside the agreed tolerance.
Now, imagine you are sitting on the Project Board. If everything is going OK, you won’t hear from the Project Manager except for the regular reports during a stage and at the end of the stage, unless there is an exception, hence the term Manage by Exception. The PRINCE2 definition for Manage by Exception is as follows: A PRINCE2 project has defined tolerances for each project objective to establish limits of delegated authority. PRINCE2 lists six tolerances that can be set. These are:
- Time, Cost, Quality, Scope, Risk and Benefit
6) Focus on products (PRINCE2 Principles)
You can imagine what happens when a product is not correctly described. All project stakeholders can have different ideas (expectations) on what the product should be. This can cause many unnecessary meetings, time delays, unnecessary new requirements, misunderstanding of the quality required, additional costs and even an end product that is of no use to anybody. From a user point of view, they is the most important of the PRINCE2 principles.
A detailed Product Description will guide the project, build correct expectations, and help to deliver the required products. The PRINCE2 manual states the following: “A PRINCE2 project focuses on the definition and delivery of products, in particular, their quality requirements.”
A good Product Description provides clarity, as it defines the product’s purpose, composition, derivation, format, quality criteria and quality method. A good Product Description also makes it easier to determine resource requirements, dependencies, and activities.
The Focus on Products principle states that a Product Description should be written as soon and as clear as possible in the project, so that all stakeholders will have a clear idea of what to expect. The Plans theme supports the Focus on Products principle as Product Descriptions are created as part of Product-Based Planning.
7) Tailor to suit the project environment (PRINCE2 Principles)
A PRINCE2 project should be tailored to suit the project’s size, environment, complexity, importance, capability and risk. If your project is a small one, such as to host a workshop with 10 people, or a very large one, like building a nuclear power plant, then you should tailor PRINCE2 to suit the project, as PRINCE2 can be applied to any type of project.
One criticism most project managers often get is that, “We don’t need a Project Method. Our projects are not that big and a project method will add a lot of unnecessary paperwork to each project.” This would happen if you try to follow PRINCE2 like a robot, but that is not the way to use PRINCE2. I often use the popular TV program, The Apprentice, as an example. This is usually a 2 day project, where 2 teams compete with each other and each team has a Project Manager. You can see that PRINCE2 can be used by each Project Manager and the paperwork can be just a checklist with some notes. You can also see that most Project Managers keep making the same mistakes week after week. This shows that they don’t understand the principle of Learn from Experience or Lessons Learned.
The purpose of tailoring is to:
- Ensure that the Project Method relates to the project’s environment (i.e. if working in a financial environment, then align it with the existing management structure).
- Ensure that the project’s controls are based on the project’s scale, complexity, importance, capability and risk. (Note: If there is a lot of risk in your project environment, then more time should be spent on dealing with Risk).
The Project Initiation Documentation (PID) should describe how the PRINCE2 method is tailored for that particular project.
By Frank Turley PRINCE2.Coach
Thanks for sharing this page this PRINCE2 Principles page