Tolerance in PRINCE2 7 is a fundamental concept within the Progress practice that establishes the permissible deviation from planned targets before escalation becomes necessary. It serves as a control mechanism that enables effective delegation while maintaining appropriate oversight throughout the…Tolerance in PRINCE2 7 is a fundamental concept within the Progress practice that establishes the permissible deviation from planned targets before escalation becomes necessary. It serves as a control mechanism that enables effective delegation while maintaining appropriate oversight throughout the project lifecycle.
Tolerance operates across six key performance targets: time, cost, scope, quality, benefits, and risk. For each of these areas, upper and lower boundaries are set that define acceptable variation from the baseline plan. As long as performance remains within these boundaries, the responsible manager can continue working autonomously. However, when forecasts indicate that tolerance limits may be exceeded, escalation to the next management level is required.
The tolerance framework supports the management by exception principle, which is one of PRINCE2's seven principles. This approach allows senior managers to delegate day-to-day control while retaining the ability to intervene when significant deviations occur. It creates an efficient governance structure where decision-making happens at the appropriate level.
Tolerances cascade through the project management structure. Corporate or programme management sets project-level tolerances for the Project Board. The Project Board then allocates stage tolerances to the Project Manager for each management stage. Similarly, the Project Manager can delegate work package tolerances to Team Managers.
When setting tolerances, organizations must balance flexibility with control. Tolerances that are too tight result in excessive escalation and micromanagement, while overly generous tolerances may allow problems to develop before corrective action can be taken.
Effective use of tolerance requires regular monitoring and forecasting. Progress reports should compare actual performance against plans and predict whether tolerance boundaries will be breached. This proactive approach enables timely decision-making and keeps stakeholders informed about project health, ensuring appropriate management attention is applied where needed most.
Tolerance in Progress - PRINCE2 Foundation V7 Complete Guide
What is Tolerance in Progress?
Tolerance in Progress refers to the permissible deviation from planned targets that a Project Manager or Team Manager can work within before they need to escalate an issue to a higher authority. In PRINCE2, tolerances are set for the six performance targets: time, cost, quality, scope, benefits, and risk.
Within the Progress practice, tolerance acts as a control mechanism that enables management by exception. This means that as long as work remains within agreed tolerances, the manager responsible can continue making decisions independently. Only when a tolerance is forecast to be exceeded must the matter be escalated.
Why is Tolerance Important?
Tolerance is crucial for several reasons:
• Efficient decision-making: It prevents senior management from being involved in every minor decision, allowing them to focus on strategic matters.
• Empowerment: Project Managers and Team Managers can operate with autonomy within defined boundaries.
• Early warning system: When tolerances are forecast to be breached, it triggers escalation before problems become critical.
• Clear accountability: Everyone understands the limits of their authority and when to seek guidance.
Project Level: The sponsoring organization or programme sets project tolerances, which the Project Board must work within. If these are forecast to be exceeded, the Project Board must escalate to corporate or programme management.
Stage Level: The Project Board sets stage tolerances for each management stage. The Project Manager must work within these. If a stage tolerance breach is forecast, the Project Manager raises an exception report to the Project Board.
Work Package Level: The Project Manager sets tolerances for each work package. Team Managers must escalate to the Project Manager if these are forecast to be exceeded.
Types of Tolerance
• Time tolerance: How much earlier or later than planned delivery is acceptable • Cost tolerance: How much under or over budget is permissible • Quality tolerance: Acceptable range for quality criteria • Scope tolerance: Which deliverables can be added, removed, or modified • Benefit tolerance: Acceptable variation in expected benefits • Risk tolerance: Level of risk exposure that can be accepted
Exception Management
When a tolerance is forecast to be exceeded:
1. An exception report is produced explaining the situation, options, and recommendations 2. The appropriate authority decides on the course of action 3. If the project or stage continues, an exception plan may be required to replace the current plan
Exam Tips: Answering Questions on Tolerance in Progress
• Remember the hierarchy: Corporate/Programme sets project tolerances, Project Board sets stage tolerances, Project Manager sets work package tolerances.
• Focus on forecasts: Escalation happens when a breach is forecast, not after it has occurred. PRINCE2 emphasizes proactive management.
• Know all six aspects: Questions may test whether you know that tolerance applies to time, cost, quality, scope, benefits, and risk.
• Understand management by exception: Tolerance enables this principle. If asked about the purpose of tolerance, connect it to efficient governance and escalation.
• Link to roles: Know who sets tolerances for whom and who escalates to whom when breaches are forecast.
• Exception reports vs exception plans: The report describes the problem and options; the plan replaces the current plan if approved to continue.
• Read questions carefully: Distinguish between questions asking about tolerance setting versus tolerance breach responses.
• Zero tolerance is valid: Some tolerances can be set to zero, meaning any deviation requires escalation.