An Exception Report is a crucial document within PRINCE2 7 that serves as a formal notification when a stage or project is forecast to exceed its agreed tolerances. This report is prepared by the Project Manager and submitted to the Project Board when the situation requires escalation beyond the de…An Exception Report is a crucial document within PRINCE2 7 that serves as a formal notification when a stage or project is forecast to exceed its agreed tolerances. This report is prepared by the Project Manager and submitted to the Project Board when the situation requires escalation beyond the delegated authority levels.
The Exception Report is triggered when monitoring reveals that cost, time, scope, quality, benefits, or risk tolerances are likely to be breached. Rather than waiting for problems to occur, this proactive approach allows for timely intervention and decision-making at the appropriate management level.
The report typically contains several key elements. First, it describes the cause of the deviation and explains why the tolerance breach is anticipated. Second, it outlines the consequences of the deviation and what impact this will have on the project objectives. Third, it presents available options for resolving the situation, including doing nothing, adjusting the plan, or taking corrective action. Fourth, it provides a recommendation from the Project Manager on which option should be pursued.
The Project Board reviews the Exception Report and decides on the appropriate course of action. They may request an Exception Plan to replace the current stage plan or project plan, approve one of the suggested options, or in extreme cases, consider premature closure of the project.
This mechanism is fundamental to the management by exception principle in PRINCE2, which ensures that senior management time is used efficiently. Project Boards only need to become involved when situations fall outside normal parameters, allowing them to focus on strategic matters while Project Managers handle day-to-day operations within their defined boundaries.
The Exception Report maintains clear communication channels and ensures accountability throughout the project lifecycle, supporting effective governance and control.
Exception Report - PRINCE2 Foundation v7 Complete Guide
What is an Exception Report?
An Exception Report is a management product used in PRINCE2 to escalate situations where a stage or project is forecast to exceed its agreed tolerance levels. It is produced by the Project Manager and submitted to the Project Board when deviation beyond tolerance is predicted.
Why is the Exception Report Important?
The Exception Report is crucial because it:
• Maintains management by exception - It ensures the Project Board only gets involved when necessary, allowing them to focus on strategic decisions rather than day-to-day management • Provides transparency - It keeps stakeholders informed about significant deviations that could impact project success • Enables informed decision-making - It gives the Project Board the information needed to decide how to proceed • Documents issues formally - It creates an audit trail of significant project challenges and responses • Protects the Project Manager - It demonstrates proper escalation procedures were followed
How Does the Exception Report Work?
The Exception Report process follows these steps:
1. Trigger: The Project Manager identifies that a stage or project tolerance will be exceeded
2. Creation: The Project Manager prepares the Exception Report describing the deviation, its cause, consequences, and available options
3. Submission: The report is sent to the Project Board for review
4. Decision: The Project Board reviews the report and decides on the appropriate course of action
5. Outcome: The Project Board may request an Exception Plan, prematurely close the project, or take other corrective action
Key Contents of an Exception Report:
• Description of the exception - What tolerance has been or will be exceeded • Cause of the deviation - Why the exception occurred • Consequences - Impact on the stage plan, project plan, and business case • Options available - Possible ways to address the situation • Recommendation - The Project Manager's suggested approach • Lessons learned - Any insights gained from the situation
Who is Involved?
• Project Manager: Creates and submits the Exception Report • Project Board: Receives and reviews the report, then makes decisions • Project Assurance: May review the report to ensure accuracy
Exam Tips: Answering Questions on Exception Report
Tip 1: Remember the trigger Exception Reports are created when tolerances are forecast to be exceeded, not after they have been exceeded. Questions often test whether you understand this proactive approach.
Tip 2: Know who creates it The Project Manager creates the Exception Report. The Project Board receives it. This is a common exam question.
Tip 3: Understand the relationship with Exception Plans An Exception Report may lead to the Project Board requesting an Exception Plan. These are different products - the report describes the problem and options, while the plan replaces the remainder of the current stage or project plan.
Tip 4: Focus on the escalation principle Exception Reports support the principle of manage by exception. If a question asks about escalation procedures or tolerance breaches, think about Exception Reports.
Tip 5: Know the difference between reports Do not confuse Exception Reports with Highlight Reports or Checkpoint Reports. Highlight Reports are regular status updates to the Project Board. Exception Reports are triggered by tolerance breaches.
Tip 6: Remember the context Exception Reports are part of the Progress practice and are used in the Controlling a Stage process. Questions may reference these connections.
Tip 7: Options must be included The Exception Report should include options for the Project Board to consider. This gives them choices rather than just presenting a problem.