PRINCE2 project management method: principles, strengths and weaknesses

With over a million certificates issued and a presence in more than 150 countries, PRINCE2 is one of the world's leading project management standards. It is considered the most important project management standard in Great Britain.

At its core, PRINCE2 is more than just a method: it is a comprehensive project management system that provides a complete control model for projects of all types and sizes. Unlike other approaches (e.g. PMI or IPMA), PRINCE2 does not so much describe the operational implementation of individual tasks as it focuses on the overarching structure and control of projects.

PRINCE2 consists of:

clearly defined processes for managing the entire course of the project

specific roles and responsibilities,

standardized management templates (e.g. business case, risk register),

established methods for results orientation and project control.

PRINCE2 is more than just a method: a systematic approach to project success

A key feature of PRINCE2 is its product-based approach: the focus is on the deliverables (products), not just on activities. In addition, PRINCE2 requires continuous business justification—projects should remain economically viable at all times and deliver real benefits.

This consistent focus on benefits makes PRINCE2 particularly effective in dynamic project environments. The business case is not created once at the start of the project, but serves as a central control instrumentthroughout the entire project. Project progress, risks, and goal achievement are regularly reviewed and compared with strategic expectations. If projects deviate significantly from their original justification, PRINCE2 expressly provides for countermeasures to be taken or for the project to be terminated in a controlled manner – not as a sign of failure, but as an expression of responsible project management.

Thanks to its modular structure, PRINCE2 can be applied across industries and flexibly adapted to the needs of organizations and projects of all sizes. In practice, PRINCE2 is therefore often used as an overarching governance framework and combined with agile process models such as Scrum to ensure both management security and flexible implementation. PRINCE2 thus offers an internationally proven best practice approach for the successful planning, management, and completion of projects.

A brief overview of the history and development of PRINCE2

PRINCE2 was developed from the original PRINCE methodology, which was published by the British government in 1989. This first version was an adaptation of the existing PROMPT (Project Resource Organization Management Planning Techniques) method, which was developed in the 1970s. PRINCE was originally designed for IT projects and was difficult to apply in other areas due to its strict rules.

To make the framework more universally applicable, PRINCE2 was published in 1996 by the Central Computer and Telecommunications Agency (CCTA), a British government agency. This new version was developed to be suitable for projects of all types and sizes. Since then, PRINCE2 has been continuously developed and updated several times to meet current requirements and reflect best practices in project management. PRINCE2 7 was published in 2023. The retention of the name “PRINCE2” (instead of “PRINCE3”) is intended to express that the method remains true to the basic principles.

In 2000, the CCTA was integrated into the Office of Government Commerce (OGC), which was later administered by the Cabinet Office. In 2013, the management and further development of PRINCE2 was transferred to AXELOS, a joint venture between the UK government and Capita. Since 2021, responsibility for PRINCE2 has been with PeopleCert, a leading global certification provider that continues to develop the methodology and integrates international standards.

Who works with PRINCE2?

PRINCE2 has established itself worldwide as one of the leading project management methods. It is used in over 150 countries and is available in several languages. PRINCE2 is particularly widespread in Europe, especially in the United Kingdom, Germany, the Netherlands and Scandinavia. However, it is also increasingly used in Australia, Asia and North America.

PRINCE2 is used in a variety of industries, including:

The universal applicability of PRINCE2 makes it attractive for companies and organizations of all sizes – for public institutions and administrations, from small start-ups to multinational corporations.

PRINCE2 offers some key advantages over other project management methods:

The method is based on a clearly structured framework that is divided into seven basic principles, seven core practices and seven processes. This interplay ensures that projects can be systematically planned, managed and completed from start to finish. The seven fundamental principles define the basic rules that must apply in every PRINCE2 project, while the seven core practices cover the central aspects of project management, such as the business case, organization and risk.

Principle 1: Continuous business justification

This principle states that a project should only be started and continued if it yields a clearly defined economic benefit. A valid business case must be created at the beginning and continuously reviewed throughout the entire course of the project. This prevents resources from being allocated to projects whose benefits dwindle over time or when market conditions change.

Practical example

A medium-sized company plans to implement a new IT platform to optimize processes. The business case created documents ROI and savings, which are regularly reviewed during the project. If market conditions change drastically, the project is adjusted or canceled to ensure resources are used wisely.

Principle 2: Defined roles, responsibilities, and relationships

Clear roles and responsibilities ensure that everyone knows what they have to do and who makes the decisions. This helps to avoid misunderstandings and enables quick reactions.

Practical example

When a new transportation network is being built, the project manager is responsible for control, while the steering committee makes strategic decisions. A quality manager monitors compliance with standards. If delays occur, everyone immediately knows who is responsible – and solutions are found quickly.

Principle 3: Learning from experience

Experience gained from completed projects is systematically documented and incorporated into new projects. This helps to avoid mistakes and reinforces proven methods.

Practical example

A manufacturing company conducts retrospectives after each project phase. Communication problems in an earlier project led to the introduction of a standardized communication protocol that makes future projects significantly more efficient and reliable.

Principle 4: Management by stages

Projects are divided into clearly defined phases, the completion of which is checked and approved. This ensures that the project remains controllable and manageable.

Practical example

When developing new software, the work is divided into phases such as planning, design, implementation, testing and rollout. After each phase, the following is checked: have the objectives been achieved? Are the risks manageable? If problems arise, the steering committee decides on corrections or adjustments.

Principle 5: Management by exception

Management only intervenes in the event of significant deviations. Within defined tolerances, the project team works independently, thus conserving management resources.

Practical example

A construction project defines tolerances for budget, time and quality. The team resolves overruns of up to 5% itself, and the steering committee is involved for overruns of 15% or more. This allows management to focus on critical decisions.

Principle 6: Product orientation

The focus is on clearly defined, high-quality end products – not just on activities. The aim is to deliver specific results that meet requirements.

Practical example

When developing an app, the team defines which functions and quality criteria must be met from the outset. Instead of getting bogged down in tasks, they regularly check whether the product meets the user requirements.

Principle 7: Adapting to the project environment

PRINCE2 is flexibly adapted to the respective project. This makes it equally suitable for small, agile projects and large, complex projects.

Practical example

A start-up uses PRINCE2 in a simplified, agile form with little bureaucracy. A large corporation, on the other hand, uses the complete framework including detailed documentation. Both adapt PRINCE2 to best suit the project – sometimes flexibly, sometimes in a structured way.

Practice 1: Business case – justification and profitability

The business case justifies why the project is being carried out at all. It shows the expected benefits and is regularly reviewed throughout the entire project. This is how we ensure that costs and benefits continue to be balanced even when conditions change.

Practical example

A company wants to introduce a new ERP system. The business case shows the advantages. If the basic conditions change, it is checked whether adjustments are necessary – for example, to the functional scope or the goals.

Management products which support practice 1

Business case

Benefits management approach

Sustainability management approach

Practice 2: Organizing – allocation of roles and stakeholder management

The practice of organization regulates the roles, responsibilities and decision-making processes. A clear structure and good stakeholder management avoid misunderstandings and ensure that everyone involved knows what needs to be done.

Practical example

In an international construction project, clear roles are crucial – from technology to sales. A defined project organization and regular coordination ensure smooth operations.

Management products which support practice 2

Communication management approach

Project management team structure

Role descriptions

Practice 3: Quality – Ensuring and controlling results

Quality means defining clear requirements from the outset and regularly checking whether these are actually being met. This is how products and results are created that meet expectations – both technically and in terms of content.

Practical example

A software company is developing an app. Quality standards are defined at the very beginning. Tests during development ensure that the app works and that users like it.

Management products which support practice 3

Product description

Quality management approach

Quality register

Product register

Practice 4: Plans – Structured planning and milestones

Plans structure the project. They define tasks, dates and milestones. With a good plan, we keep an overview and recognize early on if something is getting out of hand.

Practical example

When introducing a new production line, there is a clear plan for each step – from procurement to training. Delays can be quickly identified and remedied.

Management products which support practice 4

Plan (project, stage, team, exception)

Project product description

Work package description

Practice 5: Risks – Dealing with uncertainties and opportunities

Risks are part of every project. It is important to recognize and manage them at an early stage. PRINCE2 therefore requires systematic risk management that also takes opportunities into account.

Practical example

When setting up a new network, risks such as supply bottlenecks or new requirements are identified early. Contingency plans ensure that the project remains successful nonetheless.

Management products which support practice 5

Risk management approach

Risk register

Practice 6: Issues – Change management during the course of the project

Projects change. The changes practice ensures that new requirements are evaluated and implemented in a structured manner – without losing sight of the overall goal.

Practical example

A customer requests additional security features for a portal. With a clear change process, it is checked whether and how the requests can be integrated – without jeopardizing the project.

Management products which support practice 6

Issue management approach

Issue register

Issue report

Practice 7: Progress – Monitoring and controlling project progress

The practice of progress ensures that the project is always kept in view. Regular status reports, meetings and clear key figures help to identify the current status and to take countermeasures in good time.

Practical example

When a new software is introduced, progress is tracked using dashboards and milestones. If there are delays, immediate action is taken to get the project back on track.

Management products which support practice 7

Digital and data management approach

Daily log

Lessons log

Checkpoint report

Highlight report

Lessons report

Exception report

End stage report

End project report

PRINCE2 structures the project lifecycle into seven clearly defined processes. These processes are logically aligned, follow an overall sequence, and can be applied iteratively. Together, they cover the entire project lifecycle—from the initial idea through the management of individual stages to the formal closure of the project.

Process 1: Starting up a Project (SU) – Initial preparation and decision readiness

The purpose of this process is to ensure that the prerequisites for initiating the project are in place. Basic information is gathered, objectives are clarified, and the project idea is critically examined. An initial assessment of risks, opportunities, and feasibility is carried out.

Key outputs of this process include the project mandate, an initial project brief, and an outline business case. These form the basis for the decision on whether the project should proceed to initiation.

Process 2: Initiating a Project (IP) – Detailed planning and approval

During initiation, the project is planned in detail. The project manager prepares the Project Initiation Documentation (PID), including the project plan and baselines for time, cost, quality, scope, risk, and benefits.

The business case is refined and serves as a key decision-making instrument. The Project Board reviews and approves the initiation documentation, thereby authorising the project to proceed.

Process 3: Directing a Project (DP) – Strategic control by the Project Board

Directing a Project is a continuous process that spans the entire project lifecycle. It focuses on strategic decision-making rather than day-to-day management.

The Project Board authorises project initiation, approves management stages, responds to escalations, and ensures that the project remains aligned with business objectives. The Board intervenes only when tolerances are exceeded and provides the necessary direction, resources, and support.

Process 4: Managing a Stage Boundary (SB) – Review and preparation of the next stage

At the end of each management stage, progress is reviewed and the next stage is prepared. The business case is reassessed, plans are updated, and lessons learned are captured.

Based on the updated information, the Project Board decides whether the project should continue and authorises the next management stage. Detailed planning for the upcoming stage is completed.

Process 5: Controlling a Stage (CS) – Day-to-day management by the project manager

Controlling a Stage covers the day-to-day management activities of the project manager within a management stage. Work packages are authorised, progress is monitored, and corrective actions are taken when necessary.

The project manager ensures that work remains within agreed tolerances, coordinates team activities, and reports regularly on progress and issues.

Process 6: Managing Product Delivery (MP) – Ensuring delivery of agreed products

This process ensures that the agreed products are created and delivered according to defined quality criteria. Teams carry out the work as specified in authorised work packages and report progress and results to the project manager.

Close coordination between teams and management ensures that products are delivered on time and meet the expectations set out in the business case.

Process 7: Closing a Project (CP) – Formal closure and lessons learned

Closing a Project ensures that the project is formally closed in a controlled manner, whether it has been completed successfully or terminated early.

Project results are evaluated, outstanding issues are addressed, and lessons learned are documented. The formal closure confirms that objectives have been met (or that closure is justified) and supports organisational learning for future projects.

Project board (steering committee)

The project board forms the strategic management level and ensures that the project meets the business objectives. It is composed of the most important stakeholders, such as executives from finance, operations, and IT. Its tasks include approving plans, monitoring progress, and releasing resources. It makes strategic decisions, intervenes in the event of deviations, and maintains the business justification.

Senior User / Senior Supplier

These roles represent the interests of the users and suppliers. The Senior User ensures that the requirements and quality criteria of the end users are met. The Senior Supplier ensures resources, technical expertise, and implementation quality. Both work closely together to strike a balance between user needs and technical feasibility and sit on the project board together with the client.

Project Manager

The project manager manages the project operationally and is responsible for planning, coordinating, and monitoring all activities. He or she ensures that time and budget targets are met and acts as an interface to the project board, to which he or she reports regularly.

Project assistance and project assurance

The project assistant provides support with documentation, organization, and communication in the project. Project assurance independently monitors compliance with specifications and reports to the project board.

Change authority

The change authority decides on change requests that arise during the project. They review the impact on costs, time, and quality and only approve reasonable adjustments.

Team manager

The team manager leads one or more teams, plans tasks, and monitors the quality of results. They provide technical support and ensure that the objectives within the work package are achieved.

With the publication of PRINCE2 7 in 2023, the framework will be responding to the changing requirements of modern companies. The latest version will build on the proven principles,practices and processes of previous versions, but will integrate current insights and best practices from project management.

Major innovations in PRINCE2 7 include:

In principle, PRINCE2 can be assigned to the classical project management methods. However, in addition to the classical variant, an agile variant of PRINCE2 has now been established: PRINCE2 Agile®. Since 2015, an additional manual has described the integration of agile frameworks into the PRINCE2 process model. Agile methods such as Scrum and Kanban are characterized by their flexibility, rapid iterations and high adaptability. PRINCE2 Agile integrates these elements so that organizations can benefit from both worlds.

What is PRINCE2 Agile? PRINCE2 Agile combines the flexibility and responsiveness of AgilePM with the clearly defined overarching process control framework of PRINCE2. PRINCE2 Agile was developed for companies and individuals who use PRINCE2 and also want to benefit from the advantages of agile methods. The integration of agile approaches primarily relates to the concrete implementation. PRINCE2 Agile thus also enables agile work in complex projects and is a popular method for hybrid project management.

PRINCE2 is recognized worldwide as a professional and robust project management approach and can be applied to projects of any type, size, organization, geography, and culture. The method provides a clear framework without restricting the flexibility required in everyday project work.

Focus on benefits and cost-effectiveness: A key feature of PRINCE2 is continuous business justification. Projects are only started and continued if they deliver measurable benefits. The business case is reviewed regularly, preventing resources from being invested in projects that lose their cost-effectiveness over the course of the project.

Clear processes, standards, and templates: PRINCE2 provides clearly defined processes, roles, and management products. Standardized templates and a uniform vocabulary ensure repeatability and transparency—especially in large organizations or project landscapes with many participants. Employees who are familiar with PRINCE2 quickly find their way around new projects.

Management by exception: A central control principle is management by exception. Project managers can work independently within defined tolerances, while higher management levels only need to intervene when deviations occur. This reduces the control effort and increases efficiency.

Clear roles and responsibilities: The clear distribution of roles ensures that responsibilities are regulated transparently. Decision-making processes are clearly defined, conflicts are minimized, and cooperation between clients, users, and suppliers is supported in a structured manner.

Product-based planning: PRINCE2 pursues a consistently product-oriented approach. Right from the start, the project results are clearly defined and assigned acceptance criteria. This integrated requirements analysis reduces the risk of starting projects based on false assumptions or developing them in a way that does not meet actual needs.

Flexibility through scalability: Contrary to popular belief, PRINCE2 is not a rigid approach. The method can and must be adapted to the size and complexity of the project and the organizational framework conditions – from small internal projects to complex large-scale projects.

Despite its numerous strengths, PRINCE2 is regularly the subject of critical discussion. However, many of these criticisms can be put into perspective or classified.

“Too much documentation”: This criticism is particularly true when PRINCE2 is not scaled appropriately. The method does not require unnecessary bureaucracy, but rather appropriate documentation. If management products are adapted to the size of the project, the documentation effort remains manageable and reasonable.

“Not agile enough”: PRINCE2 follows a clear, classic structure. However, this does not exclude agility. PRINCE2 Agile is an approach that combines agile working methods with the governance structure of PRINCE2. In practice, PRINCE2 is often successfully supplemented with agile methods.

“High complexity for beginners”: The multitude of roles, topics, and processes can seem overwhelming at first. However, this phenomenon is not specific to PRINCE2, but affects almost all established project management methods. With increasing use, routine increases—comparable to learning a foreign language.

“Limited coverage of methods and soft skills”: PRINCE2 primarily describes methodological control mechanisms. Supplementary techniques such as critical path analysis or earned value analysis, as well as leadership and communication skills, must be added depending on the project. In practice, however, this is more of a conscious distinction than a disadvantage.

PRINCE2 is a powerful framework for managing individual projects. However, projects rarely stand alone. They are often part of larger initiatives, such as programs or portfolios. You will also regularly encounter topics such as risk management or IT-specific requirements in projects. This is precisely where PRINCE2 shows its strength: it can be flexibly combined with other recognized methods and frameworks. This allows you to create an integrated control system that is tailored to your organization and its challenges.

Portfolio and program management with MoP® and MSP®

Many organizations manage not only individual projects, but also a large number of initiatives that contribute to overarching business objectives. PRINCE2 focuses on managing the individual project – MoP® (Management of Portfolios) and MSP® (Managing Successful Programmes) are available to help manage entire project landscapes.

MoP helps you select the right projects and allocate resources effectively. It ensures that your organization implements precisely those projects that bring the greatest benefit. PRINCE2 comes into play when it comes to the actual implementation of these projects.

MSP, on the other hand, is aimed at managing programs, i.e. several interrelated projects that together implement a strategic change. PRINCE2 projects can be managed as building blocks of a larger program. By combining PRINCE2 and MSP, you create a clear framework: MSP sets the direction, PRINCE2 provides the methodology for implementation.

Risk management with M_o_R®

Risk management is part of every successful project. Although PRINCE2 has its own risk management guidelines, a deeper, more specific approach is necessary, which is where M_o_R® (Management of Risk) PRINCE2 ideally complements.

M_o_R provides a systematic framework for identifying, evaluating and managing risks in projects, programs and the entire company. While PRINCE2 keeps an eye on the risks of a project, M_o_R provides additional strategies and procedures to treat risks consistently across the company. This combination ensures consistency and security, especially for companies with many parallel projects.

IT project management and PRINCE2 in software development

Many companies also use PRINCE2 in IT and software projects. In these projects, questions often arise as to how classic project management structures can be combined with agile methods such as Scrum® or SAFe.

PRINCE2 offers PRINCE2 Agile®, a specially extended variant that combines agile working methods with the proven PRINCE2 structures. This allows you to benefit from the advantages of both worlds: the flexibility of agile development teams is maintained, while PRINCE2 provides the necessary control and transparency.

In software development, you can also combine PRINCE2 with ITIL® or DevOps. ITIL manages your service processes, while PRINCE2 ensures the structured implementation of software projects. DevOps builds the bridge to continuous integration and delivery of software (CI/CD), with PRINCE2 ensuring overarching project management and release processes.

Anyone who wants to apply PRINCE2 successfully in projects will benefit from sound training. PRINCE2 certifications provide you with exactly this foundation. They not only prove your knowledge, but also give you a structured understanding of how to apply PRINCE2 in practice. The certifications are divided into two levels: Foundation and Practitioner.

PRINCE2 Foundation certification is aimed at those new to project management or those who want to understand the basic principles and terminology of PRINCE2. You will learn how the framework is structured, which processes and roles are available and how PRINCE2 works in a structured way. With Foundation certification, you demonstrate that you understand the method and can work in projects with PRINCE2 teams. The route to Foundation certification usually involves official training, which often lasts two to three days. At the end, you take an exam that tests your knowledge of the basics.

The PRINCE2 Practitioner certification builds on the Foundation. It is aimed at people who want to actively apply and manage PRINCE2 in projects. The aim of the Practitioner level is to use PRINCE2 flexibly and in a way that suits the situation. Here you will learn how to adapt the method to different projects, how to evaluate specific project situations and which decisions are necessary in which step. For Practitioner certification, you will usually attend an advanced training course (usually two days) that focuses on practical application. The subsequent exam is complex: in a scenario-based test, you will have to apply your knowledge in practice and show how you would deal with typical project situations.

Both exams are conducted by PeopleCert, the official PRINCE2 examining body. There are numerous PRINCE2 training providers, ranging from large training companies to specialized PRINCE2 training providers. It is important that the training is accredited and adheres to the official syllabus. To prepare successfully, it is recommended that you work through the official PRINCE2 manual intensively.

If you are looking for a project management software that can map the PRINCE2 method in the best possible way, without you having to make concessions or even do without certain PRINCE2-specific functions, you should already pay attention to the corresponding functions when selecting the software. As our current market overview and project management software comparison show, not every popular and well-known project management software is suitable for implementing projects according to PRINCE2. Follow our 9-step plan when selecting project management software to evaluate purposefully and make the right decision in the long term.

BCS itself was introduced as a PRINCE2 project. To promote acceptance within the company, a multi-level training concept was developed and an internal coaching program was established that is still in place today. Supplemented by an internal trade fair, employees were able to familiarize themselves with the new solution at an early stage.

DVZ placed particular emphasis on the complete mapping of the PRINCE2 project process: with the BCS-supported assistants, the project managers are guided securely through all the phases – from initiation to completion. A graphical product structure plan always shows the current project status transparently, while standardized reports and dashboards support communication with management and the steering committees.

By introducing BCS, the number of tools used was reduced from 15 to a single solution. Manual and paper-based processes that were previously necessary are now completely eliminated. The PMO also benefits from a significant reduction in administrative effort and better control of the entire project landscape.

An additional added value: data from other systems such as SAP or the service recording can be synchronized via interfaces. This means that decision-relevant information is available in real time – a basis for successful project management and control according to PRINCE2.

In the success story of DVZ GmbH, Arne Hennes provides detailed insights into the use of BCS for implementing project management according to PRINCE2 at DVZ GmbH.

PRINCE2 has proven itself over decades and is one of the world's leading standards in project management. The method offers a clear structure, defined roles, and consistent product-based planning. This creates transparency about goals, responsibilities, and progress at all times—a key prerequisite for efficient and controllable projects.

A key success factor of PRINCE2 is its consistent focus on benefits and cost-effectiveness. Projects are not only planned carefully, but also critically examined and controlled throughout their entire course. This ensures that resources are used in a targeted manner and that projects are only continued if they deliver real added value.

At the same time, PRINCE2 is not a rigid set of rules. The method can be flexibly adapted to project size, complexity, and organizational conditions and can be effectively combined with agile approaches. For example, teams can work operationally according to Scrum, while PRINCE2 provides the overarching governance and control framework. The PRINCE2 Agile extension explicitly supports this combination.

In my experience, PRINCE2 is a particularly good choice when professionalism, traceability, and reliability are required in project management—for example, in:

complex projects

regulated industries (e.g., finance, medicine, energy)

Projects with many stakeholders

Public and government projects

For organizations that want to professionalize their project management in the long term, PRINCE2 remains a powerful and future-proof framework.

FAQ – PRINCE2