PRINCE2 7 Foundation

Quick
Reference
Guide

Official Training Materials

Introduction 1. Key concepts relating to projects and
PRINCE2
PRINCE2 Foundation is intended for project managers and aspiring project managers. It is also
relevant to other key staff involved in the design, development, and delivery of projects, including The definition and characteristics of a project
project board members, team managers, project assurance, project support, and operational line
managers/staff. Project: a temporary organization that is created for the purpose of delivering one or more business
products according to an agreed business case.
The PRINCE2 Foundation examination is intended to assess whether a candidate can recall and Characteristics of a project that distinguish project work from business as usual:
understand the PRINCE2 project management method (as described in the syllabus). PRINCE2
Foundation is a prerequisite for the PRINCE2 Practitioner exam, which assesses the ability to apply Characteristics Description
understanding of the PRINCE2 project management method in context.
Change the means by which we introduce change.

Tew the desired change has been implemented, business as usual resumes

What you will learn

(in its new form) and the need for the project is removed.
Cross-functional a project involves a team of people with different skills working
together (on a temporary basis) to introduce a change that will impact
others outside the team.
Key concepts relating to projects and PRINCE2
Unique every project is unique. An organization may undertake many similar
How PRINCE2 principles underpin the PRINCE2 method projects and establish a familiar, proven pattern of project activity, but
PRINCE2 practices and how they are applied through projects each one will differ in a certain way.
Uncertainty these characteristics will introduce threats and opportunities over and
PRINCE2 processes and how they are carried out throughout projects

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above those typically encountered within business as usual.

The PRINCE2 Foundation exam is a 60 multiple-choice question (MCQ) exam and requires a
candidate to obtain 60% (36 questions) correct or more to pass.

The Quick Reference Guide (QRG) is a summarized version of the examinable content. Designed as a Project
handy reference to facilitate exam preparation, it aligns with the syllabus structure: each numbered context
section in the QRG corresponds to the same-numbered “Learning Outcome” in the Syllabus. Please
note that the use of the QRG does not guarantee passing the exam.

Practices People Processes

Principles

Figure 1.1 The five interrelated elements of PRINCE2

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The seven aspects of project performance to be managed
1. Benefits: who are we doing it for? The project management team must have a clear
understanding of the purpose of the project and what needs to be achieved to justify its investment.

2. Costs: many factors can affect the cost/budget available or may lead to (potential) underspend
or overspend against the cost budget. The project has to be affordable.

3. Time: when will the project start, when will the key products be delivered, and when will the
project finish?

4. Quality: finishing on time and within budget is not much consolation if the result of the project
is not as specified or does not work. What is delivered by the project must be fit for purpose.

5. Scope: the degree to which it is permissible to under-deliver or over-deliver benefits (realized

or estimated).

6. Sustainability: all projects have an impact on their environment, and project management
Adapted from Figure 1.1 The five integrated elements of PRINCE2
teams need to know the sustainability performance targets for the project work and for the
products required of the project.
4. PRINCE2 processes: these seven processes in PRINCE2 provide the set of activities
7. Risk: limits on the plan’s aggregated risks. required to direct, manage, and deliver a project successfully:
• starting up a project
The five integrated elements of PRINCE2 • directing a project
• initiating a project
1. The seven principles of PRINCE2: the seven principles are the guiding obligations and
• controlling a stage
good practices which determine whether the project is genuinely being managed using

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• managing product delivery
PRINCE2. Unless these following principles are applied, it is not a PRINCE2 project:
• managing a stage boundary
• ensure continued business justification • closing a project.
• learn from experience
5. The project context: PRINCE2 has been designed so it can work within any context including
• define roles, responsibilities and relationships
organizational and commercial context, delivery method, sustainability requirements, and project
• manage by stages
scale. The principles, practices, and processes are applied by the people involved to ensure that
• manage by exception
the method is fit for the project context.
• focus on products
• tailor to suit the project.
Initiation Subsequent Final
2. People: an understanding of the needs, capabilities, and motivations of the people involved and Pre-project
stage stage(s) stage
the relationships between them is crucial to how the project is established and managed. People
are at the centre of the PRINCE2 method.
Directing Directing a project
3. PRINCE2 practices: these seven practices describe essential aspects of project management
Starting
that must be applied consistently and throughout the project lifecycle. up a
Managing Managing Closing
project
a stage a stage a project
boundary boundary
Managing

Initiating Controlling Controlling

a project a stage a stage

Managing Managing
Delivering product delivery product delivery

Note
� Starting up a project is used by both the directing and managing levels.
� There should be at least two stages, the first of which is the initiation stage.
� Managing a stage boundary is first used at the end of the initiation stage and repeated at the end of each subsequent stage
except the final stage. It is also used to prepare exception plans, which can be done at any time including in the final stage.

Figure 12.1 The PRINCE2 processes

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The features and benefits of PRINCE2 2. How PRINCE2 principles underpin the
As PRINCE2 is flexible and based on proven principles, organizations adopting the method as a
standard can substantially improve their organizational capability and maturity across multiple areas
PRINCE2 method
of business activity.

In addition to being an established method and qualification used worldwide, PRINCE2 has the
Ensure continued business justification
following benefits: A PRINCE2 project has business justification sufficient to warrant investment to initiate the project
and ongoing investment through to successful completion. If it does not, it should be stopped.
• Proven: based on established and proven practice and governance for project management.
• Universal: can be applied to any project, of any scale, and easily implemented alongside
specialist, industry-specific models. Learn from experience
• Flexible: can be tailored to meet the specific needs of the organizations involved.
A PRINCE2 project team actively seeks, records, and implements improvements as a result of relevant
• Common language and concepts: widely recognized and provides a common vocabulary
lessons learned from prior projects and throughout the life of the project. It applies them in future
for all participants.
projects and shares them for others to apply.
• Outcome-focused: ensures that project participants focus on the viability of the project in
relation to its business case objectives.
• Increased organizational maturity: promotes learning and continual improvement. Defined roles and responsibilities
• Part of an integrated suite of methods: designed to work with other PeopleCert guides on
A PRINCE2 project has defined and agreed roles and responsibilities within an organization structure
programme, portfolio and risk management.
that engages the business, user, and supplier stakeholder interests. Moreover, a PRINCE2 project
management team initiates and builds relationships with and between internal and external
The organizational context stakeholders.

The PRINCE2 method does not assume any specific organizational context. There may be users who
Manage by stages

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specify the desired outputs (referred to as products in PRINCE2), suppliers who will provide the
resources and expertise to deliver the products, and business decision-makers who will ensure A PRINCE2 project is planned, monitored, and controlled on a stage-by-stage basis.
that the project investment can be justified and remains justified through the project lifecycle.

The project may be part of a programme or portfolio structure, or it may be a standalone project Manage by exception
reporting to the business unit’s management structure.
A PRINCE2 project establishes limits of delegated authority by defining tolerances for performance
against its plans.
Business
Focus on products
A PRINCE2 project focuses on the definition and delivery of products, in particular their user quality
Portfolio expectations and requirements.

Tailor to suit the project

Programme Programme A PRINCE2 project applies and tailors the PRINCE2 method to suit the project environment, size,
complexity, importance, delivery method, team capability, and level of risk.

Project A Project B Project C Project D Project E

Figure 1.2 Various project contexts

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3. People in PRINCE2 Leading a successful change
Change management is the means by which an organization transitions from the current state to
People are central to the PRINCE2 method. The purpose of a project is to deliver change, which the target state. Effective leadership is required to deliver this change.
will affect people in their business as usual (BAU) activities, routines, and responsibilities. How well
PRINCE2 addresses change by creating and maintaining a change management approach for the
the change is implemented, and therefore how well the project performs, depends on the capabilities
project.
of the project team, the strength of the relationships between them, and the people impacted by the
change.

In PRINCE2, ‘people’ covers those who are working on a project and the relationships between them, Project
as well as those impacted by a project. ecosystem

Suppliers

Leading
successful
change
Users
Business

Ecosystem
People
central to Intersection/Interaction
of ecosystems
the method
Organizational Main project stakeholder
Leading ecosystem

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groups
Communication successful
Relationships
teams
People or groups

Figure 3.2 The three project interests

Projects will impact people or stakeholders from across the organizational ecosystem.
Figure 3.3 People central to the method
A stakeholder is any individual, group, or organization that can affect or be affected by (or perceives
itself to be affected by) the project.

Therefore, a project will need to involve those with a formal role in the project team and key people
either impacted by or critical to the success of the project (who may not hold a formal role).

Leading successful teams

Projects are delivered by people in a temporary team, typically working across organizational
boundaries. This means that project teams require a different style of management and leadership
than that used for established business teams, as it can be more challenging for a temporary leader
or manager to exercise their authority.

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Managing successful teams
• Cultural intelligence or the ability to relate and work across cultures within the
organizational ecosystem.document the rules for delegating change authority responsibilities,
if required
• Competencies and capabilities of those assigned to the project to identify and mitigate
gaps
• Team building to build trust and find compatible ways of working.
• Bringing teams together and building social cohesion within teams that are co-located,
or have virtual or hybrid working arrangements.

Communication
Communication is important to avoid misconceptions and unnecessary barriers in implementing
changes. Figure 5.1 Relationship between outputs, outcomes, and benefits

PRINCE2 addresses communication in a communication management approach. This defines and

Business case: documents the business justification for undertaking a project, based on the
describes the means and frequency of communication with and receiving feedback from across the
estimated costs against the expected benefits to be gained and offset by any associated risks.
project ecosystem, supporting alignment and shaping of the project. It facilitates engagement with
Benefits management approach: defines the management actions that will be established to
stakeholders through the establishment of a controlled and bidirectional flow of information.
ensure that the project’s outcomes are achieved and to confirm that the project’s benefits are
How project teams communicate will also depend on whether they are co-located, remote, or hybrid. realized.
Sustainability management approach: defines the actions, reviews, and controls that will be

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established to ensure that sustainability performance targets for the project are achieved.

4. PRINCE2 practices and how they are

PRINCE2 technique for business case management
applied throughout projects
Confirm Confirm Confirm
Business Case benefits benefits benefits

The purpose of the business case practice is to establish mechanisms to judge whether the
Subsequent Final
project is (and remains) desirable, viable, and achievable as a means to support decision-making in its Initiation
Pre-project delivery delivery Post-project
continued investment. stage
stages stage

Key concepts related to business case Check outline Check full Check updated
business case business case business case
• Capability: the completed set of project outputs required to deliver an outcome.
• Output: the tangible or intangible deliverable of an activity. Develop business case Maintain business case
• Outcome: the result of change, normally affecting real-world behaviour and circumstances. Outside the project lifecycle

Changes are implemented to achieve outcomes, which are achieved as a result of the Within the project lifecycle

activities undertaken to facilitate the change. Figure 5.3 Business case through the project lifecycle

• Benefit: the measurable improvement resulting from an outcome that is perceived as

an advantage by the investing organization and contributes towards one or more business
objectives.
• Dis-benefit: the measurable decline resulting from an outcome perceived as negative by the
investing organization, which detracts from one or more business objectives.
• Business objective: the measurable outcomes that demonstrate progress in relation to the
organization’s strategy and to which the project should contribute.

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Organizing PRINCE2 project team management roles
The purpose of the organizing practice is to define and establish the project’s structure of
accountability and responsibilities (the ‘who’). Business layer

The PRINCE2 method focuses on three principal categories of project stakeholders

Project board
(business, user, and supplier) and includes them in the governance and management arrangements
for the project.

1. Business: projects are created to meet a business need, which needs to be continuously Senior Business layer Senior
Executive
justified as value for money throughout the lifetime of the project PRINCE2 defines a project user(s) supplier(s)
executive role to represent this viewpoint on the project. Project board

2. User: the products of a project should provide benefits to a defined set of users who support
both defining the requirements of the product and ensuring these requirements are met. Senior
Executive
Senior
Users can sit within the business as end users, be impacted by the project, or have a role in user(s) supplier(s)

operating or maintaining the products. Users can also sit outside of the business as end users
or be impacted by the outputs of the project. PRINCE2 defines a senior user role to represent Project
user interests on the project. assurance

3. Supplier: projects require people with the necessary skills and knowledge to collaborate to Project Project
deliver the products. They may come from within the organization, or external suppliers may be assurance
manager
used for their skills and knowledge. PRINCE2 defines a senior supplier role to represent supplier
interest on the project. Project
manager
Project
support

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Project
support Inside the project
Team management team
Inside the project
manager(s)
Team From the business
management team Lines of authority
manager(s) From the business Lines of authority
From the supplier Project assurance
responsibility
Business From the supplier Project assurance
responsibility
Other roles in a project
Other roles in a project
management team Lines of support/advice
management team Lines of support/advice

Team members
Team members Outside
Outside the the project
project
management
management teamteam

Figure 6.3 Project management team structure

Project The role and responsibilities of the executive

Appointed by the business as the single point of accountability for the project, the executive is
ultimately accountable for the success of the project. This accountability cannot be delegated. The
User Supplier project executive secures funding for the project and is responsible for the business case and the
continued business justification of the project. They are responsible for effectively governing the
project in a way that is aligned to the business strategy, including ensuring longer-term thinking on
topics such as environmental, social, and economic impacts. There cannot be more than one project
executive and the role cannot be combined with the project manager.

Figure 6.1 The three project stakeholder groups

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The role and responsibilities of the senior user Depending on scale, complexity, skill and capacity, the project manager may also perform the team
Represents the user community and is accountable for the approach taken to capture user manager and project support roles or delegate these directly to team members.
requirements and for the specification of benefits aligned to the business case. The role is
The role and responsibilities of the team manager
responsible for:
Responsible for delivering the work allocated to them within the tolerances and constraints agreed
• ensuring user buy-in to the approach with the project manager, through:
• monitoring products against the requirements in line with the business case • delivering the products to the agreed specifications
• demonstrating to the business that the forecasted benefits in the business case are on track • setting the tolerances and constraints for team members to work within
to being realized • ensuring team decisions are in line with the project manager’s guidance and the tolerances
• controlling change to requirements and benefits • managing relationships both within their team and any interfaces with others
• successful handover and adoption of products into the business. • monitoring and supporting the safety and wellbeing of team members and the sustainability
of the team’s approach.
Depending on the scale and complexity of the user community, more than one person may
represent users. The role and responsibilities of project assurance
Project board members are accountable for the assurance of their respective areas of concern. The
The role and responsibilities of the senior supplier
project board is responsible for establishing how project assurance will be undertaken, ensuring
Represents the supplier community that is involved in all aspects of delivering the project products,
clarity in the roles and responsibilities and how those appointed to assurance roles will interact with
and must ensure sufficient ongoing commitment of people and resources from the supplier to
each other.
support the project work. The senior supplier is accountable for the quality of the products delivered
by the suppliers and for the technical integrity of the project. Depending on the scale and complexity The role and responsibilities of project support
of the supplier community, more than one person may represent suppliers. Responsible for providing services such as: administrative support, facilitating meetings and
workshops, advice and guidance on the project tools, planning support, risk management, issue
The roles and responsibilities of the project board
management, and change management. Although the role is the responsibility of the project
Accountable to the business for the success of the project and has authority and responsibility for
manager, it can be delegated to suppliers, individuals, or groups within the business or to other
the project within the project tolerances set by the business, often captured in a project mandate.
team members. Project support must be kept separate from project assurance roles to maintain the

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They are responsible for creating the right environment for the project to succeed, including:
independence of assurance.
• having sufficient funding, people, and resources to deliver the project objectives
• establishing clear feedback loops to support adapting and evolving the project Key concepts related to organizing
• assuring all aspects of the project’s performance and products independently of the project
manager Organizational levels
• ensuring business strategy and objectives are reflected in the business case The project management structure has four levels, three of which represent the project management
• ensuring the project and its management approaches are aligned to the business’ team and a fourth that sits outside the project.
environmental, social, and governance (ESG) commitments
The business layer
• setting stage tolerances to enable management by exception
The commissioning party within the business is responsible for providing the project mandate,
• governing the project and determining the rules, constraints, shared values, and perspectives
identifying the executive, and defining the project level tolerances within which the project board will
needed to guide decision-making at all levels
work.
• establishing the tolerances and change budget to support effective decision-making
• focusing on the safety and well-being of the project team Directing
• monitoring and supporting social cohesion within the project ecosystem The project board has representations from the business, user, and supplier communities and
• managing relationships at the interface of the organizational ecosystem and project is accountable for the success of the project. It is also responsible for the overall direction and
ecosystem. management of the project within the constraints established by the commissioning party.

The role and responsibilities of the project manager Managing

Has the authority to run the project on behalf of the project board within the agreed project The project manager is responsible for the day-to-day management of the project within the
tolerances and constraints. They are responsible for day-to-day management of a project, including: constraints established by the project board. The project manager’s primary responsibility is to
manage the relationships within the project to ensure that the project produces the products in
• managing and delegating the work to the team managers or team members
accordance with the strategic objectives and the agreed requirements.
• setting the work package tolerances and constraints for the team managers and project
support roles to work within Delivering
• ensuring decisions are being made in line with the project board guidance and tolerances Team managers and members are responsible for the day-to-day management and decision-making
• managing relationships within the project ecosystem for their element of the project within the constraints established by the project manager, co-creating
• monitoring and supporting the safety and well-being of team members and the sustainability where required with other team members from across the project ecosystem
of the project approach.

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Work breakdown structure
A hierarchy of all work to be done during a project that forms a link between the product breakdown
PRINCE2 technique for organizational design and
structure and the work packages. development

Commissioning
(business layer)

Figure 6.5 PRINCE2 technique for organizational design and development

Plans
Directing
(project board) The purpose of the plans practice: is to facilitate communication and control by defining the
products to be delivered (the ‘what’) and the means to deliver them (the ‘who’, the ‘how’, the ‘where’,
and estimates of the ‘when’ and for ‘how much’) to satisfy the project business case (the ‘why’).

Plan: is a proposal that outlines the what, where, when, how, and who of the project as a whole (or
a subset of its activities). In PRINCE2, there are the following types of plan: project plan, stage plan,
team plan, and exception plan.
Project Managing

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management (project
team manager)

Delivering
(team
managers)

Figure 6.2 The four organizational layers

Figure 7.1 Relationship between PRINCE2 plans

Project plan: a high-level plan showing the major products of the project and when, how, and at
what cost they will be delivered.

Stage plan: a detailed plan used as the basis for project management control throughout a stage.

Team plan: a plan used as the basis for organizing and controlling the work of a team when
executing a work package. Team plans are optional in PRINCE2.

Exception plan: a plan that follows an exception report and explains how the project will respond to
the exception within the stage.

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PRINCE2 technique for planning Defining and analysing the product
The PRINCE2 technique leads to a plan based on the creation and delivery of the required products. Defining and analysing products comprises four steps as illustrated.

Product-based planning: takes the definition and analysis of the required products as the starting Defining and analysing the products involves writing:
point for planning and deriving any supporting elements of the plan from these product descriptions,
A project product description: a description of the project’s major products or outcomes,
such as the work breakdown structure, estimates, and project schedule.
including the user’s quality expectations, together with the acceptance criteria and acceptance
methods for the project.
Defining and analysing products
A product breakdown structure: a hierarchy of all the products to be produced during a plan.

Write a project product description For project plan only

Organizing work packages

Create a product breakdown structure

Analysing risks

Preparing estimates
Repeated for:
� Project plan
� Stage plan
� Team plan
Preparing schedule
Write product descriptions For all levels of plan

Preparing the budget

Create a product flow diagram

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Documenting the plan Figure 7.4 Analysing products

Figure 7.3 The PRINCE2 planning structure

PRINCE2 structures the management of the project on a stage-by-stage basis. Combined with the
Quality
focus on products principle, managing by stages helps the project management team to plan and The purpose of the quality practice: to document the user’s requirements of the project products
deliver what is required when it is required. The number of stages can vary, based on the nature of and to establish the means by which they will be met.
the products and the necessary delivery activities.
The quality management approach: describes the quality techniques and standards to be
applied and the roles and responsibilities for achieving the required quality specifications and
acceptance criteria during a project.

Key quality terminology

Quality: the degree to which a set of inherent characteristics of a product, service, process, person,
organization, system, or resource fulfils its requirements.

User’s quality expectations: a statement about the quality expected from the project product,
captured in the project.

Requirement: a need or expectation that is documented in an approved management product.

Acceptance criteria: a prioritized list of criteria that the project product must meet before the user
will accept it.

Quality specifications: a description of the quality measures that will be applied by those
performing quality control and the levels that the finished product must meet.

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 PRINCE2 quality management procedure Risk management concepts
Focuses on three elements: Risk owner: the person who is assigned to take responsibility for responding to a risk.

• Quality planning: the capturing of quality specifications for the project products and Risk action owner: the person who is the nominated owner of agreed actions to respond to a risk.
generating the associated product descriptions and quality management approach. This role is also known as the risk actionee.
• Quality control: the procedures to monitor the specific products of a project and their
development or delivery activities to determine whether they comply with relevant standards Risk probability: the estimated chance that a risk will occur. Probability is often estimated by
and identify ways to minimize causes of unsatisfactory performance. considering the probability or frequency of occurrence of a risk.
• Quality assurance: a planned and systematic activity that provides confidence that Risk impact: the estimated effect on objectives should a risk occur.
products will meet their defined quality specifications when tested under quality control.
Quality assurance is typically a function managed independently from the project team. Risk proximity: how near in time a risk might occur.

Risk velocity: how quickly a risk would have an impact on objectives should it occur.

From user Project response Risk exposure: the degree to which a particular objective is ‘at risk’. Risk exposure is a neutral
concept as exposure can be positive or negative.
Quality planning

Project product
Quality management approach
description
Risk appetite: the amount and type of risk that the business is willing to take in pursuit of its
objectives.
Product descriptions
Risk budget: a sum of money to fund specific management responses to the project’s threats and
Quality specifications
and tolerances
Quality methods opportunities (for example, to cover the costs of any contingent plans should a risk materialize).

Risk tolerance: a measurable threshold to represent the tolerable range of outcomes for each
objective ‘at risk’ using the same units as for measuring performance for that objective.

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Quality register
Quality control Risk response: the best actions to take in response to risks will depend on the particular situation

Quality control
activities
and type of risk. Different responses may be appropriate for threats and opportunities:
• avoid a threat/exploit an opportunity
Product register
• reduce a threat/enhance an opportunity
• transfer the risk
• share the risk
Acceptance Product
• accept the risk
• prepare contingent plans.

Figure 8.1 Product quality lifecycle

Risk
The purpose of the risk practice: to identify, assess, and control uncertainties that would affect
the project’s objectives, and, as a result, improve the ability of the project to succeed.

A risk: an uncertain event or set of events that, should they occur, will affect the achievement of
objectives. A risk is measured by a combination of the probability of a perceived threat or opportunity
occurring and the magnitude of its impact on objectives.

The risk management approach: describes how risk will be managed on the project. This includes
the specific procedures, techniques, standards, and responsibilities to be applied.

The risk register: maintains a record of identified risks related to the project, including their status
and history.

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 t Ide
PRINCE2 technique for issue management
en n
m

le

tif
Imp

y
Project board/change approval authority

Communicate
Request for advice
Request for advice
or exception report

s
an Capture Assess Recommend Decide Implement

es
Pl
s
As
� Determine � Assess impact � Identify � Escalate if � Take
issue type on project options beyond corrective
business case delegated action
� Determine and project � Evaluate authority
Figure 9.2 PRINCE2 technique for risk management severity/ risk profile options � Update
priority � Approve, records and
� Check severity/ � Recommend reject, ask for project

PRINCE2 technique for risk management � Register the

issue
priority options an exception
plan, and
baseline, if
necessary
request more
Identify: review the plan’s context and objectives so that threats and opportunities can be identified. information

Assess: prioritize risks and assess the combined risk profile.

Plan: decide on risk responses and monitoring arrangements.

Implement: establish monitoring arrangements and execute actions for priority risks or realized Project log: Issue register
risks.
Figure 10.1 PRINCE2 Issue management technique
Communicate: how to communicate information regarding threats and opportunities within the

*
project ecosystem and to external stakeholders where needed.

Progress
Issues The purpose of the progress practice is to:
The purpose of the issues practice is to collect and assess issues and control changes to the
• establish mechanisms to monitor and compare actual achievements against those planned
project’s baseline.
• provide a forecast for the project’s objectives and continued viability
An issue is an event relevant to the project that requires project management consideration. There • control any deviations causing an exception.
are different types of issues:
The progress management practice is based on an overarching plan-do-check-act cycle. Effective
• A problem: an issue with an immediate and negative impact. progress management includes:
• A concern: an issue whose timelines and impact need to be assessed.
• defining management levels and tolerances for progress control
• An event external to the project: that may impact the project in some way.
• applying two types of control (event-driven and time-driven)
• A business opportunity: an issue that represents unanticipated positive consequences for
• reviewing progress and lessons
the project or user organization.
• reporting progress and lessons
• A request for change: a proposal for a change to baseline.
• forecasting remaining work
• Off-specification: a product that will not meet its quality specifications.
• escalating
In PRINCE2, issue management encompasses change control. • using data.
A change is defined as a modification to any of the approved products that constitute the project
baseline.

A project baseline is the current approved versions of the management products and project
products that are subject to change control.

Change budget is the money or authorized constraints set aside in a plan to cover changes. It is
allocated by those with delegated authority to deliver authorized changes.

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Key concepts related to the progress practice Types of control
Management levels and tolerances for progress control: The PRINCE2 method provides two types of progress control throughout the life of a project:

the project is managed by exception between four management levels against tolerances for seven
performance targets. Event-driven control
A control that occurs when a specific event occurs. For example:
Business layer
• the end of a stage
• the completion of the project initiation documentation
• the creation of an exception report
Project Reporting
Project Project status/ format and • organizational events that may affect the project, such as the end of the financial year.
Project plan
tolerances progress/exceptions Exception frequency to
report be confirmed
with business
layer
Time-driven control
A management control that occurs at predefined periodic intervals. For example:
Project board
• producing highlight reports for the project board
• checkpoint reports showing the progress of a work package.

Highlight Reporting
Stage plan
Stage
tolerances
Stage
progress/exceptions
report/ format and
Exception frequency to
Escalating exceptions
report be confirmed
with the An exception is a situation where it can be forecast that there will be a deviation beyond the
project board tolerance levels agreed between the project manager and the project board (or between the project

*
board and business layer).
Project manager

Checkpoint Reporting
Work package Work package Work package report/ format and
description tolerances progress/issues Issue frequency to
be confirmed
with project
manager

Team manager

Figure 11.2 Delegating tolerance and reporting actual and forecast progress

The tolerance levels establish limits of delegated authority:

• Benefits: the degree to which it is permissible to under deliver or over deliver benefits
(realized or estimated).
• Costs: the degree of permissible overspend or underspend against an agreed budget.
• Time: the degree to which a project is permitted to deliver later or earlier than an agreed
target completion date.
• Quality: how much something can vary from agreed quality criteria.
• Scope: permissible variation of the plan’s products.
• Sustainability: limits on the agreed metrics for sustainability.
• Risk: limits on the plan’s aggregated risks.

24 PRINCE2® 7 Foundation | Copyright© PeopleCert International Ltd. PRINCE2® 7 Foundation | Copyright© PeopleCert International Ltd. 25
PRINCE2 technique for exception management Directing
a project

Stage 2 Stage 2a (new) Project Business Project initiation

mandate layer request

Directing a project Appoint the Starting up

executive and
a project
3 5 project manager

Exception Exception New stage

report plan plan
2 4 Assess previous Appoint the project
lessons management team
Managing a stage
Controlling a stage 6 Controlling a stage
boundary

Prepare the Select the project

! outline business approach
Issue case
1
Managing product
delivery Assemble the
project brief

Figure 11.3 PRINCE2 technique for exception management

Plan the Request
initiation stage project initiation

*
5. PRINCE2 processes and how they are
Figure 13.1 Overview of starting up a project
carried out throughout projects
Starting up a project Directing a project
The purpose of the process of starting up a project is to ensure that the prerequisites for The purpose of the process of directing a project is to enable the project board to be
initiating a project are established by answering the question, ‘do we have a viable and worthwhile accountable for the project’s success by making key decisions and exercising overall control while
project?’. The decision to start the project must be explicit, as the activities within the process of delegating day-to-day management of the project to the project manager.
starting up a project happen before this decision. The objectives of the process of directing a project are to ensure that:
The project brief ensures that the project has a commonly understood and well-defined starting • there is authority to initiate the project
point. • there is authority to deliver the project product
• appropriate management direction and control are provided throughout the project’s life
The objectives of the process of starting up a project are to ensure that:
• the project remains viable
• there is a business justification for initiating the project (documented in an outline business • the business layer has a connection to the project
case) • there is authority to close the project
• all the necessary authorities exist for initiating the project (for example, to assign people and • plans for realizing the post-project benefits are managed and reviewed.
secure resources)
• sufficient information is available to define and confirm the scope of the project (in the form
of a project brief)
• alternative approaches have been evaluated and the chosen project approach agreed
• individuals are appointed who will undertake the work required in the initiation stage or take
significant project management roles during the project
• the work required for the initiation stage (documented in a stage plan) is planned
• time is not wasted initiating a project based on unsound assumptions regarding the project’s
scope, timescales, acceptance criteria, or constraints.

26 PRINCE2® 7 Foundation | Copyright© PeopleCert International Ltd. PRINCE2® 7 Foundation | Copyright© PeopleCert International Ltd. 27
 Project Project board Advice and
Initiation
authorization request for decisions from Closure notice
notice
notice advice the business

Directing
Authorize Authorize the Directing a project a project
initiation project

Authorize a stage or Authorize

Give ongoing direction
exception plan project closure

Initiate a Project
Project board’s
project authorization
Stage Next stage Advice
authorized request request
advice and
decisions
authorization request
OR OR OR

Exception plan Exception plan Exception plan Exception

authorized approval request request raised

Project initiation
request
Project initiation
authorized
Project
authorization
Premature
close notice
Project closure
request
Agree tailoring
request
requirements

Starting up Initiating Managing a

Closing a project
a project a project stage boundary

Controlling
a stage Agree the
management
Figure 14.1 Overview of directing a project approaches

Initiating a project Establish Prepare the

*
project controls project plan
The purpose of the process of initiating a project is to establish solid foundations for the
project, enabling the business to understand the work that needs to be done to deliver the project
product before committing to any significant expenditure or resources.

The objectives of the process of initiating a project are to ensure that there is common Prepare the
full business
understanding of:
case
• the reasons for doing the project, the benefits expected, and the associated risks
(documented in a full business case)
• the scope of what is to be done and the products to be delivered Request
Assemble the
• how and when the products will be delivered and at what cost Initiating a
project initiation project
• who is to be involved in the project decision-making project documentation authorization
• how the quality required will be achieved
• how baselines will be established and controlled
• how risks and issues will be identified, assessed, and controlled
Stage
• how progress will be monitored and controlled Managing a
boundary
stage boundary
• who needs information, in what format, and at what time approaching
• how the project applies business policies, methods, and guidance.

The full business case will be used by the project board to authorize the project and provides the Figure 15.1 Overview of intiatiating a project

basis of the ongoing check that the project remains viable.

The project initiation documentation (PID) is an aggregation of many of the management

products created or updated during initiation and used to gain authorization for the project to
proceed.

28 PRINCE2® 7 Foundation | Copyright© PeopleCert International Ltd. PRINCE2® 7 Foundation | Copyright© PeopleCert International Ltd. 29
Controlling a stage Managing product delivery
The purpose of the process of controlling a stage is to assign work, monitor such work, handle The purpose of the process of managing product delivery is to control the link between
issues, report progress to the project board, and take corrective actions to ensure that the stage the project manager and the team manager. This is achieved by agreeing the requirements for
remains within the tolerances set by the project board.
acceptance, execution, reporting, and delivery of specialist products.
The objectives of the process of controlling a stage are to ensure that:
The objectives of the process of managing product delivery are to ensure that:
• attention is focused on delivery of the stage’s products; any movement away from the
• work on products allocated to the team is authorized and agreed
products and delivery method that was agreed at the start of the stage is monitored to avoid
• team managers and their teams are clear as to what is to be produced and what is the
uncontrolled change
expected effort, cost, and timescales are
• risks and issues are controlled
• the planned products are delivered to quality expectations and within the tolerances
• the business case is kept under review
• accurate progress information is provided to the project manager at an agreed frequency to
• the agreed products for the stage meet the agreed quality expectations and are accepted
manage expectations.
• the project management team focus on delivery within the established tolerances.
Controlling
a stage
Directing
a project

Exception plan
authorized
Work package Completed work
OR authorized package notice
Stage Exception Request Project board’s
authorized raised for advice advice
Managing a Closing a
stage boundary project

Notify work

*
package completion
Stage boundary Project end
approaching approaching

Escalate issues Report

Controlling and risks highlights Accept a Execute a Evaluate a
a stage work package work package work package

Take corrective Evaluate stage Managing product delivery

action status

Capture issues New issue

and risks or risk
Figure 17.1 Overview of management product delivery
Evaluate work Receive
Authorize a package status completed work
work package
package

Work package Completed work

Work-package description
authorized package notice
The purpose of a work-package description is to describe how one or more products will be
produced and delivered. It is used to pass responsibility for work formally to a team manager or
Managing
product delivery team member.

Figure 16.1 Overview of controlling a stage

30 PRINCE2® 7 Foundation | Copyright© PeopleCert International Ltd. PRINCE2® 7 Foundation | Copyright© PeopleCert International Ltd. 31
Managing a stage boundary
Directing
The purpose of the process of managing a stage boundary is to enable the project manager to
a project
provide the project board with sufficient information to be able to:

• review the success of the current stage Exception plan Exception plan
• prepare the next stage plan approval request
• review the updated project plan request
• confirm continued business justification and acceptability of the risks. OR
Therefore, this process should be executed at, or close to, the end of each stage.
Next stage
The objectives of the process of managing a stage boundary are to: request

• assure the project board that all products in the current stage plan have been completed and
approved
• prepare a stage plan or exception plan for the next stage Request
• review and if necessary, update the project initiation documentation, in particular the next stage
business case, project plan, user’s quality expectations, management approaches, project
management team structure, and role descriptions
• provide the information needed for the project board to assess the continuing viability of the
project Evaluate Update the Prepare
• record any information or lessons that can help later stages of this project or other projects the stage business case exception plan
• request authorization to start the next stage.

*
For exceptions, the objectives of the process of managing a stage boundary are similar to those
listed above but include preparing an exception plan and seeking approval to replace the project or
current stage plan with the exception plan. Update the
project plan

Prepare next
stage plan Managing a
stage boundary

Initiating a Stage Controlling a

project boundary stage
approaching

Figure 18.1 Overview of managing a stage boundary

32 PRINCE2® 7 Foundation | Copyright© PeopleCert International Ltd. PRINCE2® 7 Foundation | Copyright© PeopleCert International Ltd. 33
Closing a project Notes
The purpose of the process of closing a project is to provide a fixed point at which acceptance
of the project product is confirmed. It also provides a point to recognize that the objectives or the
approved changes to the objectives, as established in the project initiation documentation, have
been achieved.

Where there is a cause for a premature close, this process ensures the project is closed in an orderly
way.

The objectives of the process of closing a project are to:

• check user acceptance of the project product

• ensure that the business can support the products when the project is closed
• review the performance of the project against its baselines
• assess any benefits that have already been realized, and update the benefits management
approach to include any post-project benefit reviews
• ensure provision has been made to address all open issues and risks, with follow-on action
recommendations
• ensure the project is closed in an orderly way and not simply abandoned (in the case of a
premature close).

*
Controlling Directing
a stage a project

Project end Premature

approaching close request

Prepare Prepare
planned closure premature closure

Confirm project
acceptance

Request Evaluate
project closure the project

Closing a
project
Project closure
request

Figure 19.1 Overview of closing a project

34 PRINCE2® 7 Foundation | Copyright© PeopleCert International Ltd. PRINCE2® 7 Foundation | Copyright© PeopleCert International Ltd. 35
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