What Is Axelos PRINCE2?

What Is Axelos PRINCE2? A Comprehensive Guide to the Project Management Methodology

PRINCE2 (PRojects IN Controlled Environments) stands as one of the world’s most widely adopted project management methodologies. Developed and maintained by Axelos, this structured approach provides organisations with a systematic framework for delivering projects of any size or complexity. Understanding PRINCE2 can significantly enhance your project management capabilities, providing clear guidelines for project governance, management, and delivery.

This comprehensive guide explores the origins, structure, and application of the PRINCE2 methodology, offering insights into how this framework can transform your approach to project management.

The Origins and Evolution of PRINCE2

From Government Standard to Global Methodology

PRINCE2 traces its roots back to 1989 when the UK government’s Central Computer and Telecommunications Agency (CCTA) developed PRINCE as a standard approach to IT project management. This original methodology, PROMPT II (Project Resource Organisation Management Planning Technique), was initially created by Simpact Systems Ltd in 1975. The government adopted and adapted this framework, renaming it PRINCE (PRojects IN Controlled Environments).

In 1996, a significant evolution occurred with the release of PRINCE2, expanding the methodology beyond IT projects to encompass all types of projects. This pivotal development transformed PRINCE2 into a generic, best-practice approach suitable for project management in any industry or sector.

Axelos and Modern PRINCE2 Development

Axelos, a joint venture company formed in 2013 between the UK Cabinet Office and Capita plc, now owns and maintains the PRINCE2 intellectual property. Under Axelos’s stewardship, PRINCE2 has undergone further refinements to enhance its applicability and accessibility.

Major updates include:

• PRINCE2 2009 Refresh: Focused on making the methodology more accessible and easier to tailor to different project environments
• PRINCE2 2017 Update (6th Edition): Emphasised flexibility and provided additional guidance on tailoring the methodology to suit various organisational contexts and project sizes
• PRINCE2 Agile: An extension that combines the governance and control of PRINCE2 with the flexibility and responsiveness of agile methods

These evolutions reflect the methodology’s commitment to remaining relevant amid changing project management practices while maintaining its core principles of controlled and organised project delivery.

Understanding the PRINCE2 Framework

The Seven Principles of PRINCE2

At the heart of PRINCE2 lie seven fundamental principles that guide all aspects of the methodology. These principles represent the essential elements that must be applied for a project to be genuinely PRINCE2-compliant:

1. Continued Business Justification: Every project must have valid business justification that remains viable throughout its lifecycle. If at any point the justification ceases to exist, the project should be reconsidered.
2. Learn from Experience: Project teams should learn from previous experiences, seeking lessons from earlier projects and applying them throughout the current project’s lifecycle.
3. Defined Roles and Responsibilities: A PRINCE2 project establishes a clear organisational structure with well-defined roles and responsibilities, ensuring accountability at every level.
4. Manage by Stages: Projects are planned, monitored, and controlled on a stage-by-stage basis, with each stage requiring authorisation before proceeding.
5. Manage by Exception: Each project level has defined tolerances (typically for time, cost, quality, scope, risk, and benefit). As long as these tolerances are not exceeded, no intervention from the level above is required.
6. Focus on Products: PRINCE2 emphasises the delivery of products rather than activities, with clear quality requirements for each product.
7. Tailor to Suit the Project Environment: PRINCE2 should be tailored to the specific context of the project, considering factors such as scale, complexity, importance, and risk.

These principles guide the application of PRINCE2 and ensure that the methodology delivers value regardless of the project’s nature.

The Seven Themes of PRINCE2

While the principles define why PRINCE2 works, the seven themes address specific aspects of project management that must be continually addressed throughout the project:

1. Business Case: Establishes mechanisms to determine whether the project remains viable and worthwhile
2. Organisation: Defines the project management team structure and roles within it
3. Quality: Implements means by which the project will verify that products are fit for purpose
4. Plans: Describes the steps needed to develop plans and the PRINCE2 planning techniques
5. Risk: Controls how to manage uncertainties in plans and the wider project environment
6. Change: Controls and manages potential changes to the baseline products
7. Progress: Establishes mechanisms to monitor and compare actual achievements against those planned

These themes are applied continuously and provide the framework for effectively managing the project. The themes align well with modern project change management strategies, particularly in how they address the critical aspects of managing project modifications.

The Seven Processes of PRINCE2

The PRINCE2 process model outlines a step-by-step path through the project lifecycle, from initial idea to project closure:

1. Starting up a Project (SU): Determines whether the project is worth investigating further and appointing the project management team
2. Directing a Project (DP): Enables the Project Board to be accountable for the project’s success by making key decisions and exercising overall control
3. Initiating a Project (IP): Establishes solid foundations for the project, enabling the organisation to understand the work to be done before committing significant resources
4. Controlling a Stage (CS): Describes the monitoring and control activities undertaken by the Project Manager on a day-to-day basis
5. Managing Product Delivery (MP): Establishes a controlled link between the Project Manager and Team Manager by setting requirements for work to be done
6. Managing Stage Boundaries (SB): Enables the Project Board to review stage performance, approve plans for the next stage, and confirm continued business justification
7. Closing a Project (CP): Confirms the acceptance of the project’s products and ensures objectives have been met or the project has nothing more to contribute

When these processes are combined with the principles and themes, PRINCE2 offers a comprehensive framework for managing projects effectively. The structured approach complements other methodologies, such as those described in the what is the Project Management Body of Knowledge (PMBOK) guide.

PRINCE2 Certification Levels and Pathways

Axelos offers various PRINCE2 certification levels to suit different career stages and project management roles:

PRINCE2 Foundation

This entry-level certification validates a basic understanding of the PRINCE2 methodology and terminology. It’s ideal for those new to project management or professionals working in a PRINCE2 environment who need to understand the core concepts.

Key aspects include:

• No prerequisites
• Multiple-choice examination format
• Tests knowledge of the PRINCE2 principles, themes, and processes
• Serves as a prerequisite for the PRINCE2 Practitioner certification

PRINCE2 Practitioner

This advanced certification demonstrates the ability to apply PRINCE2 principles, themes, and processes to real project scenarios. It’s designed for active project managers who will be implementing PRINCE2 in their work environment.

Key aspects include:

• Requires PRINCE2 Foundation certification as a prerequisite
• Objective testing examination format (complex multiple-choice)
• Tests the ability to apply PRINCE2 to scenario-based questions
• Validates the capacity to tailor PRINCE2 to different project environments

PRINCE2 Agile

This specialised certification combines PRINCE2 governance with agile methods, offering a flexible approach for projects requiring both control and adaptability.

Key aspects include:

• Available at both Foundation and Practitioner levels
• Focuses on integrating PRINCE2 with agile frameworks like Scrum, Kanban, and Lean Startup
• Ideal for organisations transitioning to or operating in agile environments
• Helps project managers blend traditional and agile approaches effectively

These certifications provide a structured pathway for project management professionals to develop and validate their PRINCE2 knowledge and skills. For a broader understanding of available certifications in the field, you might explore our comprehensive guide to top project management certifications.

Practical Applications of PRINCE2 in Various Industries

PRINCE2’s flexibility makes it applicable across a wide range of industries and project types. Here’s how different sectors leverage this methodology:

PRINCE2 in IT and Software Development

Despite its evolution beyond IT, PRINCE2 remains particularly valuable in technology projects, where its structured approach helps manage complex requirements and stakeholder expectations.

Key benefits in IT include:

• Clear stage boundaries aligning with software development phases
• Robust change control processes essential for scope management
• Product-based planning that complements software delivery
• Integration possibilities with agile methodologies via PRINCE2 Agile

For IT projects specifically, combining PRINCE2 with agile approaches can be particularly effective, as outlined in our article on agile implementation strategies for non-software projects.

PRINCE2 in Construction and Engineering

The construction industry benefits from PRINCE2’s emphasis on controls, stage planning, and quality management.

Key applications include:

• Defining clear quality requirements for construction deliverables
• Managing complex stakeholder relationships between contractors, clients, and regulatory bodies
• Providing a structured approach to risk management crucial in high-risk projects
• Enabling controlled handling of common construction project changes

Construction projects often face unique challenges, and PRINCE2 can help address many of the common errors in construction project management through its systematic approach.

PRINCE2 in Government and Public Sector

Many government departments worldwide have adopted PRINCE2 as their standard methodology, appreciating its focus on business justification and accountability.

Key advantages include:

• Clear audit trails for public spending decisions
• Structured governance supporting public accountability
• Defined tolerances for escalation in complex hierarchical organisations
• Consistent approach across multiple departments and agencies

PRINCE2 in Financial Services

Financial institutions value PRINCE2’s emphasis on business case validation and controlled progress.

Key implementations include:

• Regular business case reviews ensuring continued investment viability
• Clear risk management processes aligning with financial sector requirements
• Defined quality criteria supporting compliance demands
• Structured change control essential in regulated environments

This adaptability across industries demonstrates PRINCE2’s value as a versatile methodology capable of handling diverse project requirements.

Implementing PRINCE2: Best Practices and Common Challenges

Tailoring PRINCE2 Effectively

One of PRINCE2’s core principles is its adaptability to different project environments. Effective tailoring ensures the methodology adds value without unnecessary bureaucracy.

Key tailoring considerations include:

• Adapting the methodology to the project’s size, complexity, and importance
• Scaling documentation requirements appropriately
• Adjusting management stages to suit the project timeline
• Combining roles for smaller projects while maintaining separation of duties

Overcoming Common Implementation Challenges

Organisations often face obstacles when implementing PRINCE2. Awareness of these challenges can help prepare for a smoother adoption.

Common challenges include:

• Perception of excessive documentation and bureaucracy
• Resistance to change from existing project management practices
• Misunderstanding of how to tailor the methodology appropriately
• Lack of senior management support and understanding

Successful strategies to address these challenges include:

• Focusing on the principles rather than slavishly following all processes
• Demonstrating early wins and benefits
• Providing adequate training and support
• Establishing a centre of excellence to support implementation

When implementing any project management methodology, it’s critical to avoid common pitfalls. Our guide on avoiding project management pitfalls offers additional insights that complement PRINCE2 implementation.

Measuring PRINCE2 Implementation Success

Evaluating the effectiveness of your PRINCE2 implementation helps refine and improve your approach over time.

Key performance indicators might include:

• Improvement in on-time and on-budget project delivery
• Reduction in project failures or significant issues
• Enhanced stakeholder satisfaction with project governance
• Increased business value realisation from projects

By continually assessing and refining your PRINCE2 implementation, you can maximise the benefits of this structured approach to project management. Effective performance measurement aligns with broader project performance metrics that can help evaluate the success of your approach.

Comparing PRINCE2 with Other Project Management Methodologies

Understanding how PRINCE2 compares with other methodologies helps organisations select the most appropriate approach for their needs.

PRINCE2 vs PMI’s PMBOK Guide

The Project Management Body of Knowledge (PMBOK) Guide, maintained by the Project Management Institute (PMI), differs significantly from PRINCE2 in its approach.

Key differences include:

• PMBOK is a knowledge base rather than a methodology
• PRINCE2 defines specific processes while PMBOK describes knowledge areas
• PRINCE2 emphasises the business case more strongly
• PMBOK offers more detailed techniques for schedule and cost management

Many organisations benefit from combining elements of both approaches, using PRINCE2 for governance structure and PMBOK for detailed techniques.

PRINCE2 vs Agile Methodologies

Agile methods like Scrum focus on flexibility and iterative delivery, contrasting with PRINCE2’s structured approach.

Key differences include:

• Agile embraces change while PRINCE2 controls it
• PRINCE2 emphasises upfront planning; Agile favours adaptive planning
• Agile typically works in short iterations with immediate delivery
• PRINCE2 has stronger governance and documentation requirements

The development of PRINCE2 Agile recognises the value of combining these approaches, offering governance framework with delivery flexibility. Understanding the distinctions between methodologies is similar to the comparison between waterfall vs agile approaches outlined in our detailed comparison.

PRINCE2 vs Waterfall

Traditional waterfall approaches share some characteristics with PRINCE2 but differ in key areas.

Key comparisons include:

• Both use stage-based approaches
• PRINCE2 offers stronger governance and business justification
• Waterfall is typically more rigid in its sequential progression
• PRINCE2 provides more comprehensive risk and change management

Understanding these differences helps organisations select the most appropriate approach for their specific project needs and organisational culture.

The Future of PRINCE2 in an Evolving Project Management Landscape

PRINCE2 and Digital Transformation

As organisations embrace digital transformation, PRINCE2 continues to evolve to support modern project delivery needs.

Key trends include:

• Integration with digital delivery frameworks
• Adaptation to support faster delivery cycles
• Incorporation of data-driven decision-making
• Enhanced guidance for managing virtual teams

In the era of distributed work, PRINCE2 is being adapted to support remote project management, combining its structured approach with tools and techniques for virtual team coordination.

PRINCE2 and Hybrid Project Management

The future of project management increasingly lies in hybrid approaches that combine multiple methodologies.

Emerging developments include:

• Further integration of agile and traditional approaches
• Flexible frameworks that adapt to different project phases
• Emphasis on outcomes rather than strict methodological compliance
• Tools that support multiple methodologies simultaneously

Continuous Evolution of the PRINCE2 Framework

Axelos continues to refine PRINCE2 to ensure it remains relevant in a changing project environment.

Future directions may include:

• Enhanced guidance on sustainability in project management
• Greater emphasis on stakeholder engagement and benefits realisation
• Simplified approaches for small projects and teams
• Expanded digital resources and support tools

By staying attuned to these developments, project management professionals can continue to leverage PRINCE2’s strengths while adapting to emerging best practices.

Conclusion: Is PRINCE2 Right for Your Organisation?

PRINCE2 offers a comprehensive, flexible framework for project management that has stood the test of time. Its principles of business justification, learning from experience, defined roles, management by stages and exception, product focus, and tailoring provide a solid foundation for successful project delivery across various industries and project types.

Whether PRINCE2 is right for your organisation depends on several factors, including your project management maturity, organisational culture, and specific project requirements. For many organisations, the methodology’s structured approach to governance, combined with its flexibility for tailoring, makes it an excellent choice either as a standalone methodology or as part of a hybrid approach.

As with any methodology, successful implementation requires commitment, understanding, and appropriate adaptation to your specific context. When properly implemented, PRINCE2 can significantly enhance your project management capabilities, leading to more consistent, controlled, and successful project outcomes.

Take Your Project Management to the Next Level with Venko Group

At Venko Group, we specialise in helping New Zealand businesses implement effective project management methodologies tailored to their specific needs. Our team of experienced project management professionals can guide you through implementing PRINCE2 principles in a practical, results-focused way that adds value without unnecessary complexity.

Whether you’re considering adopting PRINCE2, need support with an existing implementation, or want to develop a hybrid approach combining PRINCE2 with other methodologies, our consultants can provide the expertise and support you need.

Contact us today to discover how our practical, hands-on approach to project management can transform your project outcomes and deliver measurable results for your business.

Book your free consultation today