Prompt engineering improves the instruction for a model response. Context engineering designs the information, tools, memory, constraints and retrieval surrounding that response. Fix the prompt first when the task is bounded; redesign context when failure follows missing or unstable information.
Choose the smallest sufficient AI layer
Is the task one output, a repeatable sequence or an open-ended objective?
Separates a prompt fix from workflow design and agent use.
What happens when a plausible output or action is wrong?
Sets the required review and human-control boundary.
Must the system read from tools or change external state?
Tests whether agent machinery is necessary at all.
Can a named person inspect success before the result matters?
Separates bounded experimentation from irresponsible delegation.
| Layer | Best fit | Next move |
|---|---|---|
| Context | Reliable inputs around repeated work | Design sources and checkpoints |
| Prompt | One inspectable output | Clarify context, constraints and acceptance criteria |
| Workflow | Repeated work with known checkpoints | Measure normal cases, exceptions and review cost |
| Agent | Variable steps with necessary tool use | Bound permissions, budget, logs and approvals |
A cheap evidence test
Write down the present human process and its baseline: time, quality, common exceptions and consequence of error. Run the smallest AI-assisted version on representative cases without letting it make a material external change.
Compare the result with the baseline. Include correction time and review effort rather than counting generation speed alone. Expand only the part that produced repeatable evidence; keep the rest human-led.
Frequently asked questions
Prompt engineering improves the instruction for a model response. Context engineering designs the information, tools, memory, constraints and retrieval surrounding that response. Fix the prompt first when the task is bounded; redesign context when failure follows missing or unstable information.
Usually not. Start with the smallest layer that can prove value: a prompt, then a reviewed workflow, then a bounded agent only if variable tool use is genuinely necessary.
Use representative test results, exception rates, correction time, human review cost and the consequence of failure rather than a polished demonstration.
Clarify the right layer
The short interview uses task shape, consequence, tools, review and evidence to distinguish a prompt fix, workflow, bounded agent or human-led stop.
Source: Narrative Studio Applied AI batch; evidence links support definitions and control boundaries.