ESCALATE ISSUES AND RISKS IN PRINCE2

PRINCE2 (PRojects IN Controlled Environments) RISK

When the PRINCE2 project board approves the next stage plan, they are entrusting the project manager to deliver against it within tolerances.  It could be seen as an unofficial contract of understanding between the project board and the project manager.

As with all human endeavors, things don't always go to plan, and the PRINCE2 project manager can only take corrective action to maintain the status quo and resolve any  issues and risks as long as the stage and/or project is forecast to be completed within the tolerance limits.

The PRINCE2 project manager must therefore expect issues and risks to arise  so they had better be prepared for it. This article covers how to handle such events.

Sometimes and issue or a risk does not have anything to do with a change request - it just happens! Issues and risks can be passed to the PRINCE2 project manager from just about anybody with an interest in the project. It can be about any topic and can be sent at any time.

PRINCE2 - The Mindset

So the mindset of the PRINCE2 project manager should be that whenever a deviation from plan occurs, the project manager can only apply corrective action for issues and risks such that the stage will remain within tolerance limits.

Your first decision will be whether or not you wish such PRINCE2 issues and risks to be treated formally or informally. If it's the latter, all you need to do is enter it into the Daily Log for you to manage such issues and risks through to a  satisfactory outcome. If it's the former, then it must be entered in the Issue or Risk Register.

PRINCE2 - Customer Acceptance and Approval

It is important to see that customer acceptance at this point may just mean a signature from the appropriate individual or organisation. The project manager will now seek approval to give notice to corporate or programme management via the project board that the project’s resources are about to be released.

Examining PRINCE2 issues and risks.

The first step when examining issues and risks after they have been entered into the appropriate document or register, is to carry out an impact analysis.

The PRINCE2 project manager will normally need to seek advice and guidance about handling such issues and risks from many other individuals such as team managers, team members, suppliers, project assurance or members of the project board, etc...

The PRINCE2 impact analysis for issues and risks should look for impacts in the following areas:

With regard to the last two bullets above, remember that a new issues or risks may give rise to a new risk or modify an existing one, and a new risk or an existing one may give rise to a new or modified current issue.

The next step is to consider options for issues and risks either to minimize a given issues and risks situation, or to remove them.

If issues and risks would cause a PRINCE2 project or stage tolerance to be exceeded, then it must use the 'escalate issues and risks activity by raising an Exception Report to bring the matter to the attention of the project board.

If the issues and risks situation can be managed within tolerance, then the PRINCE2 project manager will use the 'take corrective action' activity to resolve it, only bringing it to the attention of the project board when the project manager creates their next Highlight Report.

Whenever corrective action would not save the stage all the project from going beyond tolerance limits, then the situation must be escalated - in this case to the project board.

PRINCE2 Issues and Risks escalation - the purpose

Escalating issues and risks and ultimately producing an Exception Report, containing all the above information, and this should be seen as good practice and not in any way an admission of failure by the project manager.  Remember, the project board set tolerance with the specific intent of being informed immediately that tolerance is forecast to be exceeded.

If a PRINCE2 Exception Report is required, it will have always been preceded by an issue or risk having occurred.

It is vital in PRINCE2 project management control, that a view is gained of what would happen if the project manager took no action, the resulting forecast will give the project manager a view on what options can be, or must be, considered.

Therefore a series of options to recover the situation must now be determined.  The impact of each option must be assessed against the business case, either positive or negative.  Also the impact of each option for recovery should be assessed against the stage plan for the current stage.

These options must therefore include a different set of future actions which in turn would require modified resources whether people-based or nonhuman.  The availability of such resources should be considered within each option.  The PRINCE2 project manager must recommend which is the best option and why, including an opinion on why the other options would not be the best choice.

All of this information is captured in the PRINCE2 Exception Report and sent to the project board for their immediate attention.  Although the project board may wish to discuss the information in more detail with the project manager, the next steps and decisions belong to the project board.

Choices they may take include, requesting more information from the project manager or indeed more time for them to consider the next steps; they may approve and agree with the option chosen, or they may defer or reject a request for change (if this was the issue that caused this PRINCE2 Exception Report).  If the issue is an off specification, the project board may grant it a con session or regain defer or reject it.

From this point on, the responsibility for decision-making belongs to the PRINCE2 project board.  One option is to instruct the project manager to prematurely close the project, or a second option is to instruct the project manager to create an Exception Plan.  If their choice is the second option, then the project manager will use the Managing a Stage Boundary process to prepare for an Exception Assessment.  In the case of an instruction to prematurely close to the project, the project manager will use the Closing a Project process to carry out the necessary activities.