How Does PRINCE2 Work?

PRINCE2. Projects Under Control.

What is PRINCE2? What elements does it consist of? What advantages does this project management method offer?

tooltip text

PRINCE (Projects in Controlled Environments) was developed in 1989 by the British Central Computer and Telecommunications Agency (CCTA) as the project management standard for IT projects. In 1996 PRINCE2 was published as a general project management method that can be used in any project - including those outside IT.


After 1998, 2002, 2005 and 2009 the method was reworked and published as PRINCE2:2009. By retaining the title PRINCE2 the makers seek to express that the basic principles of the method have been upheld.


PRINCE2:2009 outlines 7 basic principles that make up the foundation of the project, 7 topics that help to complete the project and 7 processes that allow users to achieve their goals in a structured way.

What Is PRINCE2?

“Projects in controlled environments” – that’s what PRINCE2 is all about. PRINCE2 is a method for the design and management of projects of any kind, form, duration and scope. This method defines what will happen from the start to the end of the project. It does not however say anything about how things should be done, instead it stipulates what will be produced, by whom and when. Due to its separation of the production and the management elements within projects PRINCE2 is very well suited to combining various methods that deal with product creation.

Version 2 of PRINCE2 came out in 1996. It was then reworked in 2009 to PRINCE2:2009. Keeping the description “PRINCE2” after the reworking shows that the basic principles of the method have been kept. The rights to PRINCE2 were held in the British Cabinet Office until July 2013 after which they were transferred to the newly founded joint venture AXELOS.

Elements of PRINCE2

PRINCE2 consist of four elements:

  • 7 principles
  • 7 themes
  • 7 processes
  • Adaptation to the project environment

The adaptation of PRINCE2 to the project environment is an important aspect of working with methods. You can adapt the themes to the scope and form or compare the terminology of PRINCE2 with one that is available in your business and reduce the number of management products so that only the project diary, the project manager documentation, the project status report and the project completion report are left. Even the roles can be reduced and the processes adapted. In PRINCE2, only the principles may not be adapted.

Advantages of PRINCE2


  • is recommended for projects of every sort, form, duration and scope,
  • offers one uniform process, a uniform vocabulary and uniform documentation,
  • delivers best practices through proven principles, themes and processes,
  • promotes autonomous work and the intervention of management only in exceptional cases (management by exception),
  • enables adaptation to the needs of an organization or a project and offers flexibility and structure,
  • can be supported with software tools the whole way through and so offers ideal support for employees and their roles.

PRINCE2 defines a project as a temporary organization that is created for the purposes of generating one or more business products according to an agreed upon business case.

  • projects are temporary
  • project are not line activities
  • projects require resources
  • project are initiated
  • projects should deliver results
  • project bring about change
  • projects are often inter-departmental
  • the business case is essential

The 7 Basic Principles in PRINCE2


PRINCE2 defines 7 basic principles. These principles need to be applied in order to use PRINCE2.

Principle 1: Continued Business Justification

What are the reasons behind a project, what are the goals and what is the expected value of a project? PRINCE2 requires a continued business justification expressed in a business case. This entails the financial planning in the project, the laying out of statements regarding expected savings or income as well as monitoring if the business justification remains intact. The business case changes during a project such that it needs to be adjusted and reevaluated at the beginning of a new management stage.

Read more about business cases »

Principle 2: Learning from Experience

No-one likes to repeat mistakes. That’s why PRINCE2 requires that you keep an experience diary in which the good and bad experiences, the risks and problems, the improvements and new ideas are recorded. The experience diary is the basis of an experience report at the end of a project which should help you to benefit from the experience gathered for future projects. Experiences are viewed as opportunities to make improvements in the future.

Principle 3: Defined Roles and Responsibilities

PRINCE2 recognizes three stakeholders with different interests: entrepreneurs, users and suppliers. The entrepreneur expects a utility and functions as a project sponsor. The user works with project results, expects benefits and makes decisions about the acceptability of the results. The supplier produces the results and is responsible for their quality. PRINCE2 defines roles and responsibilities so that the interests are adequately represented. The steering committee makes all the important decisions in the project – it is comprised of the various stakeholders and not the project managers, as is common with other methods.

Principle 4: Overseeing Management Stages

The planning, execution, oversight and controlling are all integrated into stages in PRINCE2. Besides technical stages PRINCE2 also deals with management stages that need to be planned and budgeted for. During the transition between management stages decisions are made by the steering committee. Using the current business case the committee decides whether it’s the right time for the next stage, then plans and budgets for it. A stage plan is created for every stage, which then flows into the project plan so that everyone can get a general overview. This approach, with its active evaluation and decision making elements, is known as the “stage gate concept”.

Principle 5: Management by Exception

PRINCE2 recommends running projects according to the “management by exception” principle. Time, costs, product quality, scope, utility and risks are defined – as well as the extent to which tolerance is acceptable at each respective management level. If any of the tolerance degrees are violated, or if this seems likely, then the next highest management level must be informed. This information should be supplied by means of a template which includes a recommendation. “Management by exception” works with degrees of tolerance and escalation levels. The stricter the tolerance levels, the more often escalation can be expected.

Principle 6: Focus on Products

PRINCE2’s main aim is to generate results. These results, which include preliminary outcomes, are called products. PRINCE2 does not stipulate how products should be created, instead it concentrates on the products’ quality. This way all project participants know which results are expected. By not proscribing the product delivery content it becomes possible to combine PRINCE2 with other approaches like scrum. As a result PRINCE2 can be used for any kind of project – it is universally applicable.

Principle 7: Adjust to the project situation

PRINCE2 is not a blueprint for a particular project. The method is not tailored to one special project situation. The flexibility thus requires a concretization and an adaptation to the project situation. The steering committee makes adjustments in collaboration with the projects managers, these adjustments flow into the project documentation. Project managers with the necessary experience are always recommended. Moreover PRINCE2 provides instructions on how to adjust the method to different sized projects.


As a method PRINCE2 is suitable for all kinds of projects. It is important that the business requirements and goals provide orientation throughout the project. For this reason it is essential that progress is evaluated. Management follows the “management by exception” principle in which escalation steps have been established. The project is steered in stages. Responsibilities and roles are clearly defined, as are quality criteria of the products to be produced. It is also possible to combine it with other approaches. PRINCE2 must be adjusted to the project situation at hand.

Test Free of Charge. Project Management According to PRINCE2 with in-STEP BLUE.

Licensed by AXELOS Ltd. Learn more about in-STEP BLUE here »


7 Themes in PRINCE2


Themes are areas of knowledge that need to be considered and dealt with during the project.



7 Themes


Themes help to manage a project.

Theme 1: Business Case

At the beginning of a project the stakeholders have a vision they would like to bring about. A business case and the expected utility are made transparent by the investment. The business case gets updated in every management stage. At the same time the project structure planning becomes more detailed as a result of the business case, allowing the vision to incrementally become a reality.

The business case is associated with the question: “Why?”.

Theme 2: Organization

The theme “organization” describes the roles and responsibilities that need to be adjusted in a PRINCE2 project. It is through the organization that tasks are delegated to team members and in which they are carried out according to a pre-defined level of tolerance. The management by exception principle is employed. In addition, the organization must also navigate between the interactions between line organizations and project organizations.

The theme “organization” is associated the question: “Who?”.

Theme 3: Quality

A mutual understanding of the goal among participants is necessary in achieving a vision. At the beginning of a project things often start out vague. The “quality” theme addresses the criteria that the products need to comply with. PRINCE2 is focused on the delivery of products/results – in that sense PRINCE2 takes a product oriented approach.

Quality is associated with the question: “What?”.

Theme 4: Plans

PRINCE2 projects work according to agreed-upon plans. The steering committee green-lights plans. The “plan” theme is a compliment to the “quality” theme. PRINCE2 includes project plans, stage plans and optional team plans. A project plan or stage plan can be replaced by an exception plan.

Plans are associated with the questions: “How?” and “When?” should something happen.

Theme 5: Risks

Projects are riskier than routing events because they generally only happen once. A risk is expressed as an uncertainty about an outcome. “Risks” as a theme are concerned with risk tolerance by the project manager and the steering committee and are related to the monitoring of the risk by the owner of the risk.

“Risks” are associated with the question: “What if?”.

Theme 6: Changes

The theme “changes” describes the way issues and their possible effects on the project should be treated. Issues can include applications, mistakes, problems, questions or detours. They fall within the project manager’s responsibility. Significant changes need to be communicated to the steering committee.

The question associated with the theme “changes” is: “What would the effect be if…?”.

Theme 7: Progress

The theme progress continually assesses whether plans are achievable. It describes the decision making process required to green-light plans, the monitoring of results and the escalation process as in the case of a detour.

“Progress” is associated with the question: “How is the project coming along?”.


The 7 themes are areas of knowledge that describe aspects of project management that continually need to be taken into account and dealt with during a project. They are associated with questions like: why, who, what, how, when, what if, what are the effects if, how far are we with, and where do we want to go?

Download Whitepaper in-STEP BLUE

Knowledge to go

Everything about project management with processes

Free PDF to download »

More Downloads

  • Whitepaper
  • Tips & Tricks
  • Software

Downloadcenter »

The 7 Processes in PRINCE2


PRINCE2 takes a process based approach. A process is a sequence of activities aimed at producing results.

Process 1: preparing a project

As the name suggests this stage happens before the start of a project. “Is the project achievable and is it even worthwhile?” Those are the pertinent questions in this stage. This process is part of the line and project organization’s responsibility and it gets started by a project mandate. The project mandate is issued by management or the project leaders. The tasks associated with the process include: naming the commissioning party and the project managers, taking stock of the wealth of knowledge available in the project diary and experience logbook, the selection of the project solution and the collation of the project description – including the project definition. The project manager will then create a plan for the initiating stage, hand it over to the steering committee with the project description and either a recommendation to proceed or desist with the project.

After the project has been started up it is marked as such (SU). This leads seamlessly into the next stage, directing a project.

Process 2: directing a project

The project managers carry out day to day management tasks, while the actual leadership is performed by the steering committee. Ideally the steering committee only has to come into play to kick off new stages. Only in exceptional cases should the steering committee intervene during an ongoing stage. This might happen for example if the project managers report that a tolerance level has been violated. The steering committee also takes responsibility for communicating with the stakeholders.

The “directing a project” stage is abbreviated DP. It includes the following tasks: “initiating a project”, green-lighting a project, authorizing stages and possibly even exceptional cases, issuing ad-hoc instructions and declaring the end of the project.

Process 3: Initiating a project

The goal of the initiating stage is the creation of a decision making basis for the steering committee so that they have the tools to authorize or reject a project. Careful planning is required to authorize the financing of a project. A stakeholder analysis must be carried out, the project plan with the project based planning is created as is the stage system. Strategies are created for dealing with risks, carrying out effective communication, and ensuring the quality of the company’s configuration management. The business case is elaborated. And the project documentation or Project Initiation Document (PID) is created as an agreement among the steering committee and the project managers.

The process “initiating a project” is abbreviated as IP. It includes the steering a project which will then be greenlit by the steering committee.

Process 4: Controlling a stage

The process “directing a stage” describes the daily work of a project manager. She has to authorize work packages, evaluate the status of concrete work packages, sign off on finished work packages, assess the status of stages, keep the steering committee informed, take note of open points and risks, evaluate them and possibly escalate them.  The project manager might have to introduce corrective action during this stage.

The “controlling a stage” process is abbreviated as CS. It is related to the “managing a stage boundary” process, “managing a product delivery” and “closing a project”.

Process 5: Managing product delivery

he results that can be generated with PRINCE2 are all called products. PRINCE2 distinguishes between specialized products, i.e. all generated results, and management products that are used to direct a project. It is the team managers’ responsibility to accept and deliver work packages. During the process called “managing product deliveries” the cooperation among project and team managers is defined. Most product resources are pumped into this process.

“Managing product delivery” is abbreviated as MP. The process is repeatedly called upon during the “directing a stage” process and is considered an assisting process.

PRINCE2 recognizes the following baseline or reference products: Project description, project documentation, business case, product descriptions, work packages, benefits review plans, project plans and team plans.

The following records are recognized by PRINCE2: exception reports, experience reports, open points reports, stage closing reports, project overviews, team status reports (check point reports).


Process 6: Managing the stage boundary

PRINCE2 directs projects via management stages. The project manager begins to plan the next stage once the current stage begins to draw to a close. The business case and the project plan need to be updated in order for the steering committee to make a meaningful assessment of the project’s progress. A stage ends with a closing stage. If the plan or tolerance levels have been violated then a correction could be introduced in the form of an exception plan.

This stage is known as SB for short.

Process 7: Concluding a project

Regardless of whether a project was cut off or completed as planned the process “closing a project” will always be the final stage. It gets carried out by the project manager and ends with the final handing over of the project products. The project is evaluated at the end, the final documentation of the experiences is handed over to the line organization as are the open points. Finally a recommendation is handed to the steering committee to close the project.

After the project has ended, known as CP for short, the process “steering a project” is carried out one last time. A benefits review plan is created and the conclusion of the project is officially announced. The steering committee is then disbanded.

Important note:

There is a difference between the 7 processes and the real project stages. A project stage consists of several processes. While the processes “preparing a project” happens before a project, the process “directing a project” refers to the entire duration of the project.

A PRINCE2 project consists of at least 2 stages: the initiating stage and at least one management stage. The initiating stage consists of the processes: “initiating a project” and “managing a stage boundary”. A management stage consists of 3 processes: “directing a stage”, “managing a product delivery” and “managing a stage boundary”. A typical management stage in a project could, for example, include a conception stage and the development of a prototype or an implementation stage.

Knowledge Base: PRINCE2 processes