The PRINCE2 Exception Plan
There is much confusion about the PRINCE2 Exception Plan regarding when and how it should be used, so this article will clear this up once and for all!
Exception Plans are created to show how the project stage will recover from a breach in project or stage tolerances. To understand how Exception Plans work, you must understand a little about tolerances and exceptions.
Remember that there are four levels of management in PRINCE2, corporate or programme management, the Project Board, Project Manager, or the Team Manager for the team members themselves if there is no Team Manager.
Each level of management sets out certain constraints within which the level below must work. These constraints on may need to find in terms of the amount of money and/or time the level of management must work within.
Constraints could be set around other things as well, such as quality, scope, benefit, and risk.
It might be that the constraints are set with some flexibility.
For example, corporate or programme management could tell the Project Board that the objective is to deliver the project within 12 months, but it would be acceptable to deliver its in two months earlier or one month later.
PRINCE2 Exception Plan and Tolerances
In PRINCE2 these allowable deviations are called tolerances.
There are different levels of these tolerances that are aligned with the levels of management.
Corporate or programme management set project tolerances for the Project Board, the Project Board set stage tolerances for the Project Manager, and the Project Manager sets work package tolerances for the team or Team Manager.
Obviously, project tolerances are the largest, and then stage tolerances, and finally the smallest, work package tolerances.
If any level of management realizes they are forecasting to breach the tolerances given to them by the management level above, they are in what PRINCE2 calls an exception situation.
The exception signals that level of management has run out of authority and must escalate the situation to the level of management above.
As you will see in the following example, the exception situation might eventually lead to the creation of an Exception Plan.
Using an Exception Plan to replace a stage plan
In a project to build a hotel, the project has reached a stage where each of the floor’s bedrooms are being built. Possibly, when building one of the floors, there has been a mistake.
Instead of building 20 double rooms, 10 smaller rooms and 15 double rooms have been built.
The Project Manager consults with the construction manager and finds out that this situation could be handled in one of the following ways:
- Leave the rooms as they are and build five more double rooms and no single rooms in the next floor to be built
- Rebuild the single rooms as double rooms. Doing so, will take an additional eight weeks of work
When the Project Manager is given a stage to manage by the Project Board, he agrees to build the products according to their product descriptions. However, the product description for this floor of rooms, say there should be 20 double rooms – which in this case there are not!
The Project Manager checks to see if he can authorize work to correct the problem without breaching the stage tolerances he has been given by the Project Board.
In this example, he has been given a two-week time tolerance for the stage, however, the work to correct the problem will take an additional eight weeks.
He cannot correct the problem within the stage time tolerance, so he is in exception and must escalate the situation to the Project Board.
The Project Manager escalates a situation to the Project Board using an Exception Report. The Exception Report describes the various options to deal with the problem and recommends one of them.
In this case, the Project Manager would describe the two options and maybe he would recommend rebuilding the single rooms as double rooms and taking the additional eight weeks.
On receiving the Exception Report, the Project Board can do a number of things.
In the extreme case, they could decide that the problem is so serious that the project needs to be closed prematurely. But that seems unlikely in this situation.
Alternatively, in the case of products that have been created incorrectly – called an off specification, the Project Board could approve the incorrect products – in PRINCE2, this is called giving a concession.
Finally, the Project Board could decide to investigate the Project Managers recommended option in more detail.
They will ask the Project Manager for an Exception Plan that shows what work is involved with rebuilding the single rooms as double rooms.
In this situation, the Exception Plan will show that work needs to be done from the time of the exception to the end of the current stage.
Much of the work it details, could be the same as the original stage plan for this stage, showing the remaining work involved with building all the other floors’ bedrooms.
However, there will now be some additional tasks to change those incorrect single rooms into double rooms – and of course, the Exception Plan will run eight weeks longer than the original stage plan to allow for this additional work.
The final part to this story is that the Project Board will review the Exception Plan (in the Directing a Project process), and decide whether to authorize it.
If they do authorize it, the Exception Plan becomes the new Stage Plan that the Project Manager will then use to control the monitor the remaining work in that stage plus the new additional corrective work.
