PRINCE2 Foundation and Practitioner Principles Tutorial

PRINCE2 Principles​

 Objectives

This is chapter 3 of the PRINCE2 tutorial, which is a part of PRINCE2 Foundation and Practitioner course
After completing this PRINCE2 Principles Tutorial, you will learn:

  • The characteristics of PRINCE2 principles

  • The seven PRINCE2 principles which include: 

    • Continued business justification

    • Learn from experience

    • Defined roles and responsibilities

    • Manage by stages

    • Manage by exception

    • Focus on products

    • Tailor to suit the project

Characteristics of PRINCE2 Principles

The PRINCE2 principles provide a framework of the best practices for people involved with a project. They were developed from lessons taken from both successful and failed projects.

The characteristics of PRINCE2 Principles are:

  • They are Universal because they can apply to any project 

  • They are Self-validating because they have been proven in practice over many years

  • They are Empowering because they give their practitioners added confidence and ability to influence and shape how a project will be managed

Seven Principles of PRINCE2

The seven Principles of PRINCE2 are:

  • Continued business justification

  • Learn from experience

  • Defined roles and responsibilities

  • Manage by stages

  • Manage by exception

  • Focus on products

  • Tailor to suit the project

Seven Principles of prince2

Continued Business Justification

A PRINCE2  Project must have continued business justification. When an organization undertakes a project there would be a significant amount of investment such as money, people, time, etc. These investments must be justified.

Requirements for a PRINCE2 project are as follows: 

  • There should be a justifiable reason to start the project. 

  • The justification should remain valid throughout the life of the project. 

  • Although the project may change or evolve, the justification should remain valid. 

  • The justification should be approved and documented in a business case. 

  • If for any reason, the project can no longer be justified, the project should be stopped. 

The requirements given above can be explained with an example.

A popular pizza chain has an online order processing system which allows registered customers to place an order for their products. The same system has been used in other organizations to process the order and to deliver the products for the last three years. The number of customers has gone up in the last couple of years and most of the customers complained about the slow speed of our system. 

Due to the increase in sales and users, the current system is no longer able to process the data efficiently. So a decision was taken to upgrade the order processing system.The new system will be able to process orders 50% faster, leading to an increase in customer satisfaction by at least 20%. 

In this example, there is a justification why the current system should be changed. The justification is that the new system will process orders faster leading to customer satisfaction. 

This justification should be well documented for further use and should be approved by the Project Manager. This project is part of the nationwide programme being implemented by the pizza chain to promote better automation, leading to lesser dependence on brick-and-mortar stores for an increase in sales.

The justification should be approved and documented in a Business Case, throughout the project lifecycle. For whatever reason, if the project is no longer justified, it should be stopped. It is a wise decision to close the project if it is proved that it is not going to achieve its objectives. The funds and resources should be released and utilized in a better manner in a project with business justification. 

Continued Business Justification is essential for the safety of investment and the project and to prevent any losses.

Learn from Experience

PRINCE2 project teams learn from previous experience: lessons are sought, recorded and acted upon throughout the life of the project. Learning from past projects would be of immense benefit to the project teams.

The main features of this principle are: 

  • The teams learn from historical data based on previous similar projects in the same organization or a different organization, however, in the same industry

  • They determine when the project starts, as it progresses and when it closes

  • It is the responsibility of everyone involved with the project to proactively seek lessons learned

Example: A Japanese bank is to provide partial funding for an infrastructure project in a developing country. However, it wants an assurance from the local government as a similar project in the past had faced local labor problems.

Learning from experience takes place throughout PRINCE2:

  • When starting a project, previous or similar projects should be reviewed to see if lessons could be applied

  • As the project progresses, it should continue to learn. Lessons should be included in relevant reports and reviews. The goal is to seek opportunities to implement improvements during the life of the project

  • As the project closes, it should pass on lessons. Unless lessons provoke change, they are only lessons identified but not learned

banner

Simplilearn offers self-paced and online classroom training courses to help you prepare for both PRINCE2 Certification exams.

Defined Roles and Responsibilities

A PRINCE2 project has defined and agreed roles and responsibilities within an organizational structure that engage the business, user and supplier stakeholder interests

The project must have an explicit project management team structure consisting of defined and agreed roles and responsibilities for the people involved in the project.

All projects have the following primary stakeholders:

  • Business sponsors who endorse objectives and ensure that the business investment provides value for money 

  • Users who, after the project is completed, use the products to enable the organization to gain the expected benefits

  • Suppliers who provide the resources and expertise required by the project (may be internal or external)

The stakeholder interests must be represented effectively to the project management team.

Manage by Stages

A PRINCE2 project is planned, monitored and controlled on a stage-by-stage basis. If the work is broken into small manageable chunks, then it becomes easy to deliver the product. PRINCE2 also suggests that the work is divided into multiple logical stages which helps in better management of the project work and these stages are called Management Stages.

Management stage:
The section of a project that the project manager is managing on behalf of the project board at any point in time, at the end of which the project board will wish to review progress to date, the state of the project plan, the business case and risks and the next stage plan in order to decide whether to continue with the project or not.

A PRINCE2 project must have at least two management stages:

  • An initiation stage 

  • At least one further management stage that includes formal posing of the project

A project manager can determine the number and duration of management stages using the

following factors:

  • The size and complexity of the project (shorter management stages offer more control)

  • Significant decisions and control points are required during the project’s lifecycle 

  • Organizational policies and standards

Management stages are important because the focus on managing by stages ensures that the project is properly initiated

  • It provides a review of decision points, giving the project board an opportunity to assess the project’s viability at defined intervals

  • Gives the ability to ensure that key decisions are made before the detailed work needed to implement them

  • Allows clarification of the impact of an identified external influence

  • Facilitates the ‘manage by exception’ principle by delegating authority to the project manager on a stage-by-stage basis

Note: The Project Board delegates the authority for day-to-day control of a management stage, within agreed tolerances, to the Project Manager.
 

Manage by Exception

A PRINCE2 project has defined tolerances for each project objective to establish limits of delegated authority. 

Every PRINCE2 project has four levels of management:

  • Corporate or Programme Management: The Corporate or Programme Management appoints an Executive, whose responsibility is to get the project executed as per the tolerances defined by the management. 

  • Directing-Project Board: The Project Board is responsible for providing overall direction and management to the project.

  • Managing-Project Manager: The Project Board appoints the Project Manager to take care of the day-to-day management of the project within the constraints set by the board.

  • Delivering-Team Manager: The Project Manager gets the work done by Team Managers, who deliver the specialist product of the project.

When there are multiple levels of management PRINCE2 enables appropriate governance by defining accountability at each level. 

This Accountability is established by delegating authority from one management level to the next by setting tolerances against the six aspects of performance for the respective level of a plan:

  • Cost: the degree of allowable overspend or underspend against an agreed budget

  • Time: the degree to which a project is allowed to deliver later or earlier than the agreed target completion date

  • Quality: how much something can vary from the agreed quality criteria

  • Scope: allowable variation of the plan’s product

  • Benefits: the degree to which it is allowable to under-deliver or over-deliver benefits

  • Risk: limits on the plan’s aggregated risks 

The implementation of management exception provides efficient use of senior management time. It reduces senior managers’ time burden without removing their control by ensuring decisions are made at the right level in organizations. Each management layer can work within the limits set and escalate only when required.

Focus on Products

A PRINCE2 project focuses on the definition and delivery of products and, in particular, their quality requirements

Every project will have some scope defining the final output.The document that captures the details of each product is called a Product Description. The product description includes each product’s purpose, composition, derivation, format, quality criteria and quality method.

The product description is used to: 

  • Estimate efforts

  • Determine effort estimates, resource requirements, dependencies and activity schedules

A successful project is output-oriented and 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. 

Product: A product is an input or output, whether tangible or intangible, that can be described in advance, created and tested.

PRINCE2 has two types of products: 

  • management products 

  • specialist products

Under the principle of ‘focus on products’, PRINCE2 requires projects to be the output-oriented rather than work-oriented. PRINCE2 calls the outputs as ‘products’.

Tip: The PRINCE2 manual uses the terms ‘output’ and ‘deliverable’ synonymously with the term ‘product’

In Information Technology industry the Agile delivery approach is becoming popular because a project using an Agile delivery approach will initially focus on the purpose, derivation and quality criteria of the project’s product to deliver the initial features. More details about the composition and format will emerge as the product reaches its final state. 

The Agile principles ensure:

  • The project carries out only the work that directly contributes to the delivery of a product

  • It helps manage uncontrolled change (‘scope creep’) by ensuring that all changes are agreed in terms of how they impact project products and the business justification for the project

  • It reduces the risk of user dissatisfaction and acceptance disputes by agreeing on, at the start, what will be produced by the project

Tailor to Suit the Project Environment

PRINCE2 is tailored to suit a project’s environment, size, complexity, importance, capability, and risk. 

A generic method may require some tweaking and tailoring to fit the projects specific requirements. 

  • The purpose of tailoring is to ensure that:

    • The project management method used is appropriate for the project

    • Project controls are appropriate for the project’s scale, complexity, importance, team capability, and risk

  • Tailoring requires the Project Board or the Project Manager to make proactive choices and decisions on how PRINCE2 will be applied.

  • The Project Initiation Document (PID) should describe how PRINCE2 has been tailored for a particular project. The project manager documents tailoring in PID.

  • If PRINCE2 is not tailored, it is unlikely that the project management effort and approach would be appropriate for the needs of the project.

Summary

  • A PRINCE2 project has continued business justification 

  • PRINCE2 project teams learn from previous experience: lessons are sought, recorded and acted upon throughout the life of a project

  • A PRINCE2 project has defined and agreed upon roles and responsibilities within an organizational structure that engage the business, user and supplier stakeholder interests

  • A PRINCE2 project is planned, monitored and controlled on a stage-by-stage basis

  • A PRINCE2 project has defined tolerances for each project objective to establish limits of delegated authority

  • A PRINCE2 project focuses on the definition and delivery of products and, in particular, their quality requirements

  • PRINCE2 is tailored to suit the project’s environment, size, complexity, importance, capability, and risk

Conclusion

We have learnt about the PRINCE2 Principles in this chapter. In the next chapter we shall discuss about Tailoring and Adopting PRINCE2

Find our PRINCE2® Foundation and Practitioner Online Classroom training classes in top cities:


Name Date Place
PRINCE2® Foundation and Practitioner 28 Jul -5 Aug 2018, Weekend batch Your City View Details
PRINCE2® Foundation and Practitioner 4 Aug -12 Aug 2018, Weekend batch London View Details
PRINCE2® Foundation and Practitioner 18 Aug -9 Sep 2018, Weekend batch Manchester View Details
  • Disclaimer
  • PMP, PMI, PMBOK, CAPM, PgMP, PfMP, ACP, PBA, RMP, SP, and OPM3 are registered marks of the Project Management Institute, Inc.

We use cookies on this site for functional and analytical purposes. By using the site, you agree to be cookied and to our Terms of Use. Find out more

Request more information

For individuals
For business
Name*
Email*
Phone Number*
Your Message (Optional)

By proceeding, you agree to our Terms of Use and Privacy Policy

We are looking into your query.
Our consultants will get in touch with you soon.

A Simplilearn representative will get back to you in one business day.

First Name*
Last Name*
Email*
Phone Number*
Company*
Job Title*

By proceeding, you agree to our Terms of Use and Privacy Policy