PRINCE2 Foundation

Lesson 2PRINCE2 Principles

Based on AXELOS PRINCE2 material. Material is reproduced under licence from AXELOS Limited. All rights reserved.

PRINCE2 is a [registered] trade mark of AXELOS Limited, used under permission of AXELOS Limited. All rights reserved.

AXELOS is a [registered] trade mark of AXELOS Limited, used under permission of AXELOS Limited. All rights reserved.
Copyright 2014, Simplilearn, All rights reserved.
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Objectives

List the seven principles of PRINCE2 methodology

After completing
this lesson, you will Explain the seven principles of PRINCE2 methodology
be able to:

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Seven Principles of PRINCE2

The seven principles of PRINCE2 are as follows:

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Continued Business Justification

A PRINCE2 project has continued business justification.[1]

Requirements for a PRINCE2 project are as follows:

There should be a justifiable reason to start a project.

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

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

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.

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Learn from Experience

PRINCE2 project teams learn from previous experience: lessons are sought, recorded and acted upon
throughout the life of the project.[2]

The main features of this principle are:

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

They learn 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 learnt.

A Japanese bank is to provide partial funding for an infrastructure project in a

developing country. However, they want an assurance from the local government as
a similar project in the past had faced local labour problems.

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Roles and Responsibilities

A PRINCE2 project has defined and agreed roles and responsibilities within an organization structure
that engages the business, user and supplier stakeholder interests.[3]

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Manage by Stages

A PRINCE2 project is planned, monitored and controlled on a stage-by-stage basis.[4]

The different features of this principle are:

PRINCE2 suggests that the work be divided in multiple logical stages called management stages.

The production of the project is carried out in phases called technical stages.

A PRINCE2 project should have minimum two management stages: one initiation stage and one
or more further management stages.

Shorter the stages, more the control and vice-versa.

Stages are to be planned, delegated, monitored and controlled according to the business priority,
risk and complexity involved.

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Manage by Exception

A PRINCE2 project has defined tolerances for each project objective to establish limits of delegated
authority.[5]
Every PRINCE2 project has four levels of management. They are:

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

DirectingProject Board Project Board is responsible for providing overall direction and management to the project.

ManagingProject The Project Board appoints Project Manager to take care of day-to-day management of the project
Manager within the constraint set by the Project Board.

DeliveringTeam The Project Manager gets the work done through Team Managers, who deliver the actual specialist
Manager product of the project.

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Manage by Exception (contd.)

According to PRINCE2, the Project Manager controls six aspects of the project and they are Time,
Cost, Scope, Benefits, Risks and Quality.

If the tolerances are forecast to be exceeded, they are immediately referred to the next
management layer for a decision.

Right decisions are made by the right level of people at the right time.

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Focus on Products

A PRINCE2 project focuses on the definition and delivery of products, in particular their quality
requirements.[6]
The product description includes each products purpose, composition, derivation, format, quality
criteria and quality method.
Product description is used to:
o estimate efforts.
o determine resource requirements.
o determine dependencies.
o determine schedule of activities.
A successful project is output-oriented and not activity-oriented. An output-oriented project is
one that agrees and defines the projects products prior to undertaking the activities required to
produce them.

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Tailor to Suit the Project Environment

PRINCE2 is tailored to suit the projects environment, size, complexity, importance, capability and
risk.[7]
Project Initiation Documentation (PID) describes how the method is being tailored for a project.
Tailor the project management method to suit the project environment such as business processes
for human resource, finance and procurement management.
Set project controls based on:
o Scale
o Complexity
o Importance
o Capability
o Risks involved in the project

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 Quiz

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 QUIZ Which of the PRINCE2 principles supports the definition of tolerances for the six
1 project objectives?

a. Manage by stages
b. Tailor to suit the project environment
c. Focus on products
d. Manage by exception

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 QUIZ Which of the PRINCE2 principles supports the definition of tolerances for the six
1 project objectives?

a. Manage by stages
b. Tailor to suit the project environment
c. Focus on products
d. Manage by exception

Answer: d.
Explanation: Manage by exception principle supports the definition of tolerances for the six
project objectives.

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 QUIZ If the projects are based on the management by exception principle, which of the
2 following benefits does it provide?

a. Promotes consistency of project work

b. Project is not seen as an end in itself
c. Provides clarity of what a project will deliver, why, by whom, and when
d. Efficient and economic use of management time

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 QUIZ If the projects are based on the management by exception principle, which of the
2 following benefits does it provide?

a. Promotes consistency of project work

b. Project is not seen as an end in itself
c. Provides clarity of what a project will deliver, why, by whom, and when
d. Efficient and economic use of management time

Answer: d.
Explanation: The implementation of management by exception provides efficient and
economic use of senior management time.

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 QUIZ The incorporation of the primary stakeholders in the project management team
3 supports which principle?

a. Continued business justification

b. Defined roles and responsibilities
c. Manage by stages
d. Manage by exceptions

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 QUIZ The incorporation of the primary stakeholders in the project management team
3 supports which principle?

a. Continued business justification

b. Defined roles and responsibilities
c. Manage by stages
d. Manage by exceptions

Answer: b.
Explanation: The incorporation of the primary stakeholders in the project management
team supports defined roles and responsibilities principle.

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 QUIZ Which PRINCE2 principle supports planning only to a level of detail that is manageable
4 and foreseeable?

a. Continued business justification

b. Defined roles and responsibilities
c. Manage by stages
d. Manage by exceptions

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 QUIZ Which PRINCE2 principle supports planning only to a level of detail that is manageable
4 and foreseeable?

a. Continued business justification

b. Defined roles and responsibilities
c. Manage by stages
d. Manage by exceptions

Answer: c.
Explanation: Manage by stages principle supports planning only to a level of detail that is
manageable and foreseeable. A PRINCE2 project is planned, monitored and controlled on a
stage-by-stage basis.

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 QUIZ
As per PRINCE2, the three primary stakeholders in the project are:
5

a. Business, users and suppliers

b. Business, users and customers
c. Users, suppliers and customers
d. Customers, business and trader

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 QUIZ
As per PRINCE2, the three primary stakeholders in the project are:
5

a. Business, users and suppliers

b. Business, users and customers
c. Users, suppliers and customers
d. Customers, business and trader

Answer: a.
Explanation: As per PRINCE2, the three primary stakeholders in the project are business,
users and suppliers.

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 QUIZ
Which PRINCE2 principle ensures that the project is viable, achievable and desirable?
6

a. Continued business justification

b. Manage by exception
c. Focus on products
d. Tailor to suit the project environment

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 QUIZ
Which PRINCE2 principle ensures that the project is viable, achievable and desirable?
6

a. Continued business justification

b. Manage by exception
c. Focus on products
d. Tailor to suit the project environment

Answer: a.
Explanation: Continued business justification principle ensures that the project is viable,
achievable and desirable. A PRINCE2 project has continued business justification, which
should remain valid throughout the life of the project.

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 QUIZ Which PRINCE2 principle ensures that the PRINCE2 project delivers the product as
7 per quality requirements?

a. Continued business justification

b. Manage by exception
c. Focus on products
d. Tailor to suit the project environment

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 QUIZ Which PRINCE2 principle ensures that the PRINCE2 project delivers the product as
7 per quality requirements?

a. Continued business justification

b. Manage by exception
c. Focus on products
d. Tailor to suit the project environment

Answer: c.
Explanation: Focus on products principle ensures that the PRINCE2 project delivers the
product as per quality requirements. Without it, projects are exposed to major risks such as
acceptance disputes, uncontrolled change (scope creep) and user dissatisfaction.

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 QUIZ Which of the following PRINCE2 principles ensures that project management effort
8 and approach are appropriate for the needs of the project?

a. Continued business justification

b. Manage by exception
c. Focus on products
d. Tailor to suit the project environment

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 QUIZ Which of the following PRINCE2 principles ensures that project management effort
8 and approach are appropriate for the needs of the project?

a. Continued business justification

b. Manage by exception
c. Focus on products
d. Tailor to suit the project environment

Answer: d.
Explanation: Tailor to suit the project environment principle ensures that project
management effort and approach are appropriate for the needs of the project. PRINCE2 is
tailored to suit the projects environment, size, complexity, importance, capability and risk.

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 QUIZ
Justification for a PRINCE2 project is documented in:
9

a. Project Initiation Documentation (PID)

b. Business Case
c. Project Brief
d. Stage Plan

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 QUIZ
Justification for a PRINCE2 project is documented in:
9

a. Project Initiation Documentation (PID)

b. Business Case
c. Project Brief
d. Stage Plan

Answer: b.
Explanation: A PRINCE2 project has continued business justification. The justification is
documented in a Business Case.

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 QUIZ
A PRINCE2 project should have at least how many management stages?
10

a. Two
b. Three
c. Four
d. Seven

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 QUIZ
A PRINCE2 project should have at least how many management stages?
10

a. Two
b. Three
c. Four
d. Seven

Answer: a.
Explanation: PRINCE2 requires a minimum of two management stages: one initiation stage
and one or more further management stages.

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Summary

A PRINCE2 project has continued business justification

Here is a quick
recap of what we PRINCE2 project teams learn from previous experience: lessons are sought,
have learnt in this recorded and acted upon throughout the life of the project
lesson: A PRINCE2 project has defined and agreed upon roles and responsibilities
within an organisation structure that engages 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, in
particular, their quality requirements
PRINCE2 is tailored to suit the projects environment, size, complexity,
importance, capability and risk
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 Thank You

Based on AXELOS PRINCE2 material. Material is reproduced under licence from AXELOS Limited. All rights reserved.
PRINCE2 is a [registered] trade mark of AXELOS Limited, used under permission of AXELOS Limited. All rights reserved.
AXELOS is a [registered] trade mark of AXELOS Limited, used under permission of AXELOS Limited. All rights reserved.
The Swirl logo is a trade mark of AXELOS Limited, used under the permission of AXELOS Limited. All rights reserved. Copyright2014,
2014, Simplilearn, All rights reserved.
34 Copyright Simplilearn, All rights reserved.
References

[1] Based on Managing Successful Projects with PRINCE2, by AXELOS. Principles, Continued Business
Justification.
[2] Based on Managing Successful Projects with PRINCE2, by AXELOS. Principles, Learn from
Experience.
[3] Based on Managing Successful Projects with PRINCE2, by AXELOS. Principles, Defined Roles and
Responsibilities.
[4] Based on Managing Successful Projects with PRINCE2, by AXELOS. Principles, Manage by Stages.
[5] Based on Managing Successful Projects with PRINCE2, by AXELOS. Principles, Manage by
Exception.
[6] Based on Managing Successful Projects with PRINCE2, by AXELOS. Principles, Focus on Products.
[7] Based on Managing Successful Projects with PRINCE2, by AXELOS. Principles, Tailor to Suit the
Project Environment.

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