Projects and PRINCE2 Key Concepts · Topic 2 of 2
Why Project Management and the Benefits of PRINCE2
Why organizations use project management, the challenges PRINCE2 addresses, the five project characteristics, project context and the benefits of PRINCE2.
- 5 min
- Projects introduce change; business as usual keeps things running.
- Five characteristics: change, temporary, cross-functional, unique, uncertainty.
- Project context covers organizations, programmes and portfolios, commercial relationships, sector and scale.
What it is
Organizations run two kinds of work: business as usual, which keeps things running, and projects, which introduce change. Projects need a different style of management because they are temporary, unique and uncertain.
This page explains why organizations use project management, the common challenges PRINCE2 is designed to address, the five characteristics that separate a project from business as usual, how the project's context matters, and what PRINCE2 offers in return.
How it works
Why project management is used
Organizations keep changing to respond to competition, regulation, technology and customer expectations. Change carries risk, and business as usual structures are not designed to manage it.
Project management gives the change a dedicated, temporary structure with clear decision making, control of the investment and a focus on delivering what was agreed. It lets the organization decide whether the change is worth pursuing and keep checking that it still is.
Challenges PRINCE2 is designed to address
Projects commonly struggle for a familiar set of reasons. PRINCE2 7 groups its response to them into the method's elements.
| Common challenge | How PRINCE2 responds |
|---|---|
| Unclear or changing justification | Business case kept up to date throughout |
| Nobody sure who decides what | Defined roles, responsibilities and relationships |
| Plans that are unrealistic or too detailed too early | Planning horizons and management stages |
| Senior managers overloaded or not involved | Manage by exception with clear tolerances |
| Products delivered that users do not accept | Focus on products with agreed quality criteria |
| Mistakes repeated from earlier projects | Learn from experience |
| Stakeholders and the people affected not engaged | The people element, engagement and communication |
You do not need a numbered list of challenges for the exam. Be ready to recognise that each PRINCE2 principle and practice exists to fix a known way projects go wrong.
The five characteristics of a project
| Characteristic | Meaning |
|---|---|
| Change | Projects are the means by which organizations introduce change |
| Temporary | A project has a defined start and end; business as usual continues indefinitely |
| Cross-functional | A project brings together people with different skills, often from different organizations |
| Unique | Every project is different in some way, even if similar to earlier ones |
| Uncertainty | Because of the other four, projects carry more risk than business as usual |
Exam distractors often offer "repetitive" or "permanent", which describe business as usual instead.
Projects in context
No project runs in isolation. The project context is the setting that shapes how the method is applied, and it is one of the five integrated elements.
Context includes the organization or organizations involved, whether the project is standalone or part of a programme or portfolio, whether there is a commercial relationship between a customer and suppliers, the sector and any regulation, and the project's scale and complexity. A large multi-supplier infrastructure project and a small internal process change will both use PRINCE2, but in very different ways.
Features and benefits of PRINCE2
| Feature | Benefit to the organization |
|---|---|
| Can be applied to any type, size and sector of project | One method across the organization |
| Widely recognised and understood | A common vocabulary for customers, suppliers and staff |
| Can be used alongside specialist and delivery models | Works with agile, engineering or other specialist approaches |
| Explicit roles and responsibilities | Everyone knows what is expected of them and who decides |
| Product focus | Clarity on what will be delivered and to what quality |
| Manage by exception | Efficient use of senior management time |
| Continued business justification | Investment stopped when the project is no longer worthwhile |
| Learning built in | Each project improves the next |
A worked example
A hospital trust is replacing its patient booking system. The work is temporary, involves IT, clinical and administrative staff, is new to this trust, and has uncertainty about data migration: all five characteristics are present.
It is part of a wider digital programme, a supplier is under contract, and patient data is regulated, so the project context is complex. The trust chooses PRINCE2 because the supplier already uses the same vocabulary and the programme board wants decisions only when tolerances are threatened.
How the exam asks about this
- "Which is a characteristic of a project?" Uncertainty (or change, temporary, cross-functional, unique). Not "repeatable" or "permanent".
- "Why does a project carry more risk than business as usual?" Because it introduces change, is temporary, unique and cross-functional, so its outcome is uncertain.
- "Which is a benefit of PRINCE2?" For example, it gives a common vocabulary, or manage by exception makes efficient use of management time.
What to remember for the exam
- Projects introduce change; business as usual keeps things running.
- Five characteristics: change, temporary, cross-functional, unique, uncertainty.
- Project context covers organizations, programmes and portfolios, commercial relationships, sector and scale.
- PRINCE2 can be applied to any project and combined with specialist models.
- Each principle and practice answers a known cause of project problems.
"Uncertainty" is a characteristic caused by the other four. Do not pick "risk free" or "repetitive" as a project characteristic.
Common mistakes
Treating the context as optional. Project context is one of the five integrated elements and drives tailoring.
Thinking PRINCE2 replaces specialist methods. It manages the project and works alongside specialist delivery approaches.
Calling a recurring process a project. Repeated, ongoing work is business as usual, not a project.
Check yourself
What are the five characteristics of a project?
Change, temporary, cross-functional, unique and uncertainty.
Why must a project's context be understood?
Because the organization, commercial setting, sector and scale all shape how PRINCE2 is tailored and applied.
How does manage by exception benefit an organization?
Senior managers are only involved when tolerances are forecast to be exceeded, which saves their time.
Topic 2 of 2 in Projects and PRINCE2 Key Concepts
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