PRINCE2 Project Management Methodology Explained

PRINCE2 is an acronym for projects in controlled environments.

It is the second iteration of the methodology that was initially designed for IT and when it undertook a review in 1996 the new methodology was called PRINCE2.

It is a process-based project management strategy used a lot by the UK government and private industry – in fact, it is used in over 150 countries and is largely heralded as the most popular strategy.

The aim of this project management methodology is to direct the actions in a project to keep it on time and within budget.

This is arguably the same for all project management methodologies, though others give less focus to organisation and more time to reflect on the direction of the project.

PRINCE2, on the other hand, front loads effort with extensive planning with a clearly structured linear progression to the completion of a project’s goals.

The Basic Principals

There are seven basic principles that underpin all PRINCE2 projects.

These principles are:

1. All projects must have a clear business justification. In other words, is there an obvious need, a customer, realistic benefits for the customer and a detailed cost-benefit analysis?
2. It is fundamental to the approach that team members learn from every stage of the project and work to improve future stages. This does not mean a change in direction but instead an improvement in processes.
3. There should be a clear definition of roles and responsibilities. Unlike other methodologies, there are no set roles defined but there is a presumption that for a project to be successful all people involved should understand responsibilities and accountability for all members of the team.
4. The work is planned from the beginning but is divided into clear stages. There should be phases of the project with the chance for periodic review to ensure that lessons have been learned and that the project is on target.
5. The project is managed by exception. In reality, this means the project management only has a limited control over decisions made in the project even though some project boards would argue the opposite. The project manager is free to make decisions that will keep a project on time and on the budget but the extent of these decisions are limited by exceptions. The project manager is free to proceed in the best way except in certain circumstances and then it must be the decision of the project board.
6. There must be a focus on quality, with deliverables monitored against requirements at all times.
7. The approach should be shaped to the bespoke requirements of each project.

How It Works

Step 1 – Collect All Information

At the start of the project, you should pull together all the information needed to help make the case.

This information should be detailed enough to inform the extensive planning to come, which is the defining characteristic of the methodology.

The key to success here is to do this process quickly, so if you decide not to go ahead not too much time has been wasted.

The only question you are answering is: should we go ahead and fully plan this project? Therefore, you only need make the business case and leave more fundamental planning until this business case has been agreed.

This is essentially a risk analysis – so using this mindset when developing the case is a sound approach.

Step 2 – Detailed Planning

Next, you will complete full and detailed planning.

This is where much of the effort is in PRINCE2 – with the idea that all phases of the project and the planning for this is laid out in detail. Work here is likely to prevent failures down the line.

The planning should include clear requirements for the quality of deliverables, which the team will use throughout to measure the success of the project to date. Therefore, the definition of quality needs to be clear.

Step 3 – Delivery To The Specified Quality

Now the project moves into a process of delivery to the specified quality.

The team should be clearly briefed on responsibility and expected progress. This stage in the project will be marked by periodic reports to the project board.

The project board will be made up of executives who are not involved in the day to day detail of the project but will be asked to make decisions for those exceptions that do not fall under the responsibility of the project manager.

The project manager is responsible for managing cost and timing up until you hit one of the pre-defined exceptions. This means there is some autonomy over the completion of processes – just up to a point.

The key point here for a project manager is to keep a close eye on the exceptions.

These exceptions are the bespoke features of a project that are likely to define its success. As soon as one of these exceptions has been met, as the project manager you must immediately inform the project board, else the project could come to a halt.

You will be expected as project manager to investigate the exception. And you should investigate rapidly – as this is a crucial point of success or failure of the project. This means working out what has happened, why it has happened and the options for what should happen next.

This is a case where it is likely there will be a need for some rapid re-planning of the remaining stages of the project to make sure it gets back on track.

Anything a project manager devises here will need approval before it can be actioned. Ultimately, this point in the project could result in two outcomes: carry on in an adapted form or stop the project and cut your losses.

Step 4 – Reflect On The Quality Of Work

As the project progresses through the different carefully planned stages you should reflect on the quality of the work being done.

Each team member should be accountable for the quality set out in the initial planning. At the end of each phase or stage, there should be a moment of reflection on the processes and whether these actions are guiding the project to successful completion.

Unlike other methodologies, this is not a reflection on the brief and whether this should be redefined. All of this will have been explored in the initial planning phases.

Here it is a matter of reflecting on ways of working and whether this can be improved to ensure quality deliverables.

Step 5 – Project Review

Then, towards the end of the project, the project board meets again. Here the point is the review.

The project manager will write brief reports on the progress of the project and the board will authorise or not the completion of the project.

This end stage meeting will plan the final stages of the project, update the business case and complete a detailed risk log.

Even at this late stage, the decision could still be to end the project – but more likely if all other stages have been addressed appropriately, this meeting will be to authorise the final step towards project completion.

Project closure is about a final double check that everything has been done and that the specified requirements and quality has been met.

If the project is deemed to have not met requirements it might be that you are left with the task of salvaging what you can to avoid waste.

Equally, it might be that the project review considers further actions building on the success of what has been achieved.

Ultimately, this final step in the process is about reporting on the final cost, time and quality of the project and commenting on whether it has achieved its objectives.

There should be some consideration of lessons learned, both positive and negative, and how these can be applied in the future.

In Summary

Overall, PRINCE2 is about moving in a linear fashion through the stages of a project.

The stages are designed based on the individual needs of the project but it is likely in all cases that the end product will be defined in the beginning planning.

The reflection that goes on throughout the project is based on two principles: is the project moving forward in a way that does not hit one of the points of exception? Are the processes of completing the project efficiently and can they be redesigned to improve efficiency and value?

The project manager does enjoy a degree of autonomy in the movement of the project through the staged.

Management by exception means the project manager is aware where their accountability ends and where further approval is needed. This means they are free to make day-to-day decisions about time and budget but at certain defined points, they should seek further advice.

In this way, PRINCE2 is clever in its definition of roles, responsibility and accountability. Where this is the case it is usually for projects to be successful – as everyone knows what is expected of them.

PRINCE2 project management methodology explained in short: plan lots, break into stages, be clear on the risks, respond quickly to exceptions and make sure requirements for deliverables are explicitly laid out to all.

Read our guide to Top Project Management Methodologies.