7principles4PRINCE2 Principles are characterised as:

  • Universal in that they apply to every project
  • Self-validating in that they have been proven in practice over many years
  • Empowering because they give practitioners of the method added confidence and ability to influence and shape how the project will be managed


The 7 Principles

  1. Continued Business Justification
  2. Learn from Experience
  3. Defined Roles & Responsibilities
  4. Manage by Stages
  5. Manage by Exception
  6. Focus on Products
  7. Tailor to suit the project environment


1.    Continued Business Justification

  • A PRINCE2 project has continued business justification, and requires that:
    • There is a justifiable reason to start
    • Justification should remain valid throughout the life of the project
    • Justification is documented and approved

Justification is documented within a Business Case and drives the decision making process to ensure the business objectives and benefits are realised.


Failure to have a business case can result in multiple projects having mutually inconsistent or duplicated objectives -> wasted resources, trying to do the same thing.


If the project can no longer be justified it must be stopped and should be seen as a positive contribution whereby further resources are not wasted and can thus be reinvested elsewhere in more worthwhile ventures.



2.    Learn from Experience

  • PRINCE2 project teams learn from experience:
    • Lessons are sought, recorded and acted upon throughout the life of the project
  • When starting a project, previous lessons should be reviewed to see if lessons learned can be applied.
  • As the project progresses, the project should continue to learn and be included in all reports and reviews, with the intention of seeking opportunities to implement improvements
  • As the project closes, the project should pass on lessons

It is the responsibility of all those involved with the project to seek lessons learned rather than waiting for someone else to provide them.



3.    Defined Roles & Responsibilities

  • A PRINCE2 project has defined and agreed Roles & Responsibilities within an organisational structure that engages the business, users and supplier stakeholder interests
  • Projects involve people. No amount of good planning or control will help if the wrong people are involved, if the right people are not involved or if people do not know what's expected of them or what to expect of others
  • Projects must have an explicit project management team structure consisting of defined roles and responsibilities for all people involved with the project and a means for effective communication between them


All projects have the following primary stakeholders:

  • Business sponsors who endorse the objectives and ensure that the business investment provides value for money
  • Users who, after the project is completed, will use the products to enable them to gain the intended benefits
  • Suppliers who provide the resources and expertise required by the project

A defined project management team structure answers the question: "What is expected of me?"



4.    Manage by Stages

  • A PRINCE2 project is planned, monitored and controlled on a stage by stage basis
  • Management stages prove senior management with control points at major intervals throughout the project
  • At the end of each stage, the project's status should be assessed, the Business Case and plans reviewed to ensure that the project remains viable, leading to a decision as to whether to proceed
  • This allows control according to the business priority, risk and complexity involved
  • Planning should only be carried out to a level of detail that is manageable and foreseeable
  • Effort should not be wasted on attempts to plan beyond a sensible planning horizon
    • e.g. a detailed plan for the next 12 months will almost certainly be inaccurate after just a few weeks
  • A detailed plan for the short term and an outline plan for the long term is more effective
  • PRINCE2 overcomes the planning horizon issue by:
    • Dividing the project into a number of stages
    • Having a High-Level Project Plan and a detailed Stage Plan (for the current stage)
    • Planning, Delegating Monitoring and Controlling on a stage by stage basis
  • PRINCE2 requires there to be a minimum of two management stages:
    • One Initiation Stage, and
    • One or more further management stages


5.    Manage by Exception

  • A PRINCE2 project has defined tolerances for each project objective to establish limits of delegated authority
  • PRINCE2 enables appropriate governance by defining responsibilities for directing, managing and delivering the project and clearly defining accountability at each level
  • Accountability is established by:
    • Delegating authority from one management level to the next by setting tolerances against six objectives for the respective level of the plan:
      • Time    +/- an amount of time on the target completion dates
      • Cost    +/- an amount of the planned budget
      • Quality +/- degrees off a quality target (e.g. product weighs 300g, with an allowed -5 to +10g tolerance)
      • Scope  Permissible variation of the plan's products (e.g. mandatory requirements +/- desirable requirements)
      • Risk     Limits on the plan's aggregated risks (e.g. costs of aggregated threats to remain less than 10%of the plan's budget)
      • Benefit +/- degrees off an improvement goal (e.g. 30-40% cost reduction)
    • Setting up controls so that if those tolerances are forecast to be exceeded, they are immediately referred up to the next management layer for a decision on how to proceed
    • Implementing an assurance mechanism so that each management layer can be confident that such controls are effective
  • The implementation of Management by Exception provides a very efficient use of senior management's time as it reduces their time burden without removing their control by ensuring decisions are made at the right level in the organisation


6.    Focus on Products

  • A PRINCE2 project focuses on the definition and delivery of products, in particular their quality requirements
  • A successful project is output-oriented not activity oriented
  • An output-oriented project is one that agrees and defines the project's products prior to undertaking the activities required to produce them
  • The set of agreed products defines the scope of a project and provides the basis for planning and control
  • The purpose of a project is to fulfil stakeholder expectations in accordance with the business justification, and to do this there must be a common understanding of the products required and the quality expectations for them
  • A PRINCE2 project uses Product Descriptions to provide such clarity by defining each product's purpose, composition, derivation, format, quality criteria and quality method
  • They provide the means to determine effort estimates, resource requirements, dependencies and activity schedules
  • The 'product focus' supports almost every aspect of PRINCE2: planning, responsibilities, status reporting, quality, change control, scope, configuration management, product acceptance and risk management
  • Without a product focus, projects are exposed to several major risks such as acceptance disputes, rework, uncontrolled change ('scope creep), user dissatisfaction and underestimation of acceptance activities


7.    Tailor to suit the project environment

  • PRINCE2 is tailored to suit the project's environment, size, complexity, importance, capability and risk.
  • The value of PRINCE2 is that it is a universal project management method that can be applied regardless of project type, organization, geography or culture
  • If PRINCE2 is not tailored, it is unlikely that the project management effort and approach are appropriate for the needs of the project. This can lead to 'robotic' project management at one extreme (the method is followed without question) or 'heroic' project management at the other extreme (the method is not followed at all)
  • The purpose of tailoring is to:
    • Ensure the project management method relates to the project's environment (e.g. aligning the method to the business processes that may govern and support the project, such as human resources, finance and procurement)
    • Ensure that project controls are based on the project's scale, complexity, importance, capability and risk (e.g. the reporting and reviewing frequency and formality)
  • Tailoring requires the Project Manager and the Project Board to make an active decision on how the method will be applied, for which guidance is provided
  • When tailoring PRINCE2, it is important to remember that it requires information (not necessarily documents) and decisions (not necessarily meetings)
  • To ensure that all those people involved with the project understand how PRINCE2 is to be used, the Project Initiation Documentation should state how the method is being tailored for that particular project

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