An Exception Plan is a crucial component within the PRINCE2 7 framework that comes into play when a project stage or the entire project is forecast to exceed its agreed tolerances. When a Stage Plan or Project Plan is predicted to deviate beyond the permitted boundaries set for time, cost, scope, q…An Exception Plan is a crucial component within the PRINCE2 7 framework that comes into play when a project stage or the entire project is forecast to exceed its agreed tolerances. When a Stage Plan or Project Plan is predicted to deviate beyond the permitted boundaries set for time, cost, scope, quality, benefits, or risk, the Project Manager must escalate this situation to the Project Board through an Exception Report.
Once the Project Board receives the Exception Report, they have several options, one of which is to request an Exception Plan. This plan essentially replaces the current Stage Plan or Project Plan from the point of exception onwards. It provides a new baseline that accounts for the deviation and sets out how the remaining work will be completed.
The Exception Plan follows the same format and structure as the original plan it replaces. It includes revised schedules, resource allocations, costs, and any necessary adjustments to achieve the project objectives within newly agreed parameters. The plan must be approved by the Project Board before implementation can proceed.
Key characteristics of an Exception Plan include its role as a recovery mechanism, providing a formal route back to controlled project delivery. It demonstrates the PRINCE2 principle of management by exception, where higher authorities only become involved when tolerances are threatened.
The preparation of an Exception Plan involves reassessing risks, reviewing dependencies, and potentially re-negotiating with stakeholders regarding deliverables or timelines. The Project Manager develops this plan with support from Team Managers and relevant specialists.
Exception Plans ensure transparency and accountability in project governance. They provide the Project Board with visibility of how issues will be addressed while maintaining the structured approach that PRINCE2 advocates. This mechanism helps prevent uncontrolled changes and ensures that all significant deviations receive appropriate senior management attention and approval.
Exception Plan - PRINCE2 Foundation V7 Complete Guide
What is an Exception Plan?
An Exception Plan is a plan that replaces the current Stage Plan when a stage is forecast to exceed its tolerance levels. It is produced at the request of the Project Board when the Project Manager reports that the stage cannot be completed within the agreed tolerances for time, cost, scope, quality, benefits, or risk.
An Exception Plan covers the remaining work of the current stage from the point where the exception was identified to the end of that stage. It essentially becomes the new Stage Plan once approved by the Project Board.
Why is an Exception Plan Important?
Maintains Management Control: Exception Plans ensure that the Project Board retains control over the project when things deviate significantly from what was planned. This prevents the Project Manager from continuing with a plan that is no longer viable.
Enables Informed Decision-Making: The Exception Plan provides the Project Board with a realistic picture of what it will take to complete the stage, allowing them to make informed decisions about whether to continue, modify, or stop the project.
Supports the Management by Exception Principle: PRINCE2 operates on management by exception, meaning the Project Board only needs to intervene when tolerances are breached. The Exception Plan is the formal mechanism for handling these situations.
Documents Recovery Strategy: It formally documents how the project will recover from the exception situation and what resources, time, and costs are needed.
How Does an Exception Plan Work?
Step 1 - Exception Identified: The Project Manager identifies that the stage is forecast to exceed its agreed tolerances.
Step 2 - Exception Report Produced: The Project Manager creates an Exception Report detailing the situation, its cause, options for recovery, and recommendations.
Step 3 - Project Board Decision: The Project Board reviews the Exception Report and may request an Exception Plan if they wish to continue with the project.
Step 4 - Exception Plan Created: The Project Manager develops the Exception Plan, which covers the work from the current point to the end of the stage. This plan includes revised estimates, updated schedules, and any changes to the approach.
Step 5 - Project Board Approval: The Project Board reviews and approves the Exception Plan at an exception assessment meeting. Once approved, the Exception Plan replaces the current Stage Plan.
Step 6 - Implementation: The Project Manager manages the remainder of the stage using the new Exception Plan with new tolerances set by the Project Board.
Key Characteristics of an Exception Plan
- Replaces the current Stage Plan (not the Project Plan) - Covers only the remaining work in the current stage - Requires Project Board approval before implementation - Is triggered when tolerances are forecast to be exceeded - Contains the same level of detail as a Stage Plan - New tolerances are set by the Project Board for the Exception Plan
Common Scenarios Requiring an Exception Plan
- Significant delays causing time tolerance breach - Cost overruns exceeding budget tolerance - Quality issues requiring substantial rework - Scope changes that cannot be absorbed within tolerances - Major risks materializing that impact the stage
Exam Tips: Answering Questions on Exception Plan
Tip 1: Remember that an Exception Plan replaces the Stage Plan, not the Project Plan. If a question asks what plan is replaced, the answer is always the Stage Plan.
Tip 2: The Exception Plan is requested by the Project Board, not the Project Manager. The Project Manager produces it, but the board must request it first.
Tip 3: An Exception Plan is only created when tolerances are forecast to be exceeded. It is a proactive measure, not a reactive one after tolerances have already been breached.
Tip 4: The Exception Plan covers the period from now until the end of the current stage. It does not cover past work or future stages.
Tip 5: Know the sequence: Exception occurs → Exception Report → Project Board requests Exception Plan → Exception Plan produced → Project Board approves → Exception Plan replaces Stage Plan.
Tip 6: If a question mentions project-level tolerance breach, remember this goes to corporate or programme management, not handled by an Exception Plan alone.
Tip 7: Be careful with questions about who approves the Exception Plan. It is always the Project Board that approves it, similar to Stage Plan approval.
Tip 8: Look for keywords in questions such as 'forecast to exceed', 'tolerance breach', 'remaining work in stage', and 'replaces' - these often indicate Exception Plan is the correct answer.