Tolerances in PRINCE2 7 represent the permissible deviation from a plan before escalation is required. They serve as a fundamental mechanism for progress control, enabling management by exception and empowering team members to make decisions within defined boundaries.
There are six tolerance areas…Tolerances in PRINCE2 7 represent the permissible deviation from a plan before escalation is required. They serve as a fundamental mechanism for progress control, enabling management by exception and empowering team members to make decisions within defined boundaries.
There are six tolerance areas in PRINCE2: Time, Cost, Scope, Quality, Risk, and Benefits. Each tolerance defines an acceptable range of variation from planned targets. For example, a project might have a time tolerance of plus or minus two weeks, meaning the Project Manager can adjust schedules within this range before needing to escalate to the Project Board.
Tolerances operate at multiple levels within the project hierarchy. Corporate or programme management sets project-level tolerances for the Project Board. The Project Board then delegates stage-level tolerances to the Project Manager. The Project Manager may further delegate work package tolerances to Team Managers. This cascading structure ensures appropriate control at each management level.
When tolerances are forecast to be exceeded, this triggers an exception situation. The responsible manager must escalate the matter to the next higher authority level. For instance, if a Project Manager forecasts that stage tolerances will be breached, they must raise an Exception Report to the Project Board, who then decides on the appropriate response.
Effective use of tolerances reduces unnecessary escalation and reporting while maintaining proper oversight. They provide clear boundaries within which managers can exercise their authority and make operational decisions. This approach balances the need for control with efficient project execution.
Setting appropriate tolerances requires careful consideration of project context, organisational risk appetite, and stakeholder expectations. Too tight tolerances create excessive escalation and slow decision-making. Too loose tolerances may result in inadequate control and late identification of problems. Regular review of tolerance levels during stage boundaries helps ensure they remain appropriate throughout the project lifecycle.
Tolerances for Progress Control in PRINCE2 v7
Why Tolerances Are Important
Tolerances are a fundamental concept in PRINCE2 that enable effective management by exception. They provide the boundaries within which a manager can operate before needing to escalate issues to a higher authority. This approach allows senior management to delegate day-to-day control while maintaining oversight of potential problems. Tolerances prevent micro-management and ensure that escalation only occurs when genuinely needed.
What Are Tolerances?
Tolerances are the permissible deviation from a plan's targets. They define the acceptable range of variation for the six aspects of project performance:
• Time - How much earlier or later than planned • Cost - How much under or over budget • Quality - The acceptable range of quality criteria • Scope - What can be added or removed from deliverables • Risk - The threshold of aggregate risk exposure • Benefits - The acceptable deviation from expected benefits
Tolerances are typically expressed as a plus or minus value (e.g., +10 days, -£5,000).
How Tolerances Work in Practice
Tolerances operate through the management levels in PRINCE2:
1. Corporate/Programme Level sets project tolerances for the Project Board 2. Project Board sets stage tolerances for the Project Manager 3. Project Manager sets work package tolerances for Team Managers
When a tolerance is forecast to be exceeded, an exception occurs. The manager must escalate this to the next level through an exception report. This triggers a decision on how to proceed, potentially resulting in an exception plan.
Key Points to Remember
• Tolerances must be defined at each management level • They apply to all six performance targets • A forecast breach requires escalation before the tolerance is actually exceeded • Tolerances enable management by exception • Zero tolerance means any deviation must be escalated • Tolerances should be realistic and appropriate for the project context
Exam Tips: Answering Questions on Tolerances for Progress Control
1. Understand the hierarchy - Know which level sets tolerances for which other level. Questions often test whether you understand this delegation chain.
2. Remember all six aspects - Exam questions may ask you to identify all tolerance types. Memorize: Time, Cost, Quality, Scope, Risk, and Benefits.
3. Focus on forecasts - Escalation happens when a tolerance is forecast to be exceeded, not after it has already been breached. This is a common exam trap.
4. Link to management by exception - If a question mentions delegation, autonomy, or escalation, tolerances are likely the answer being sought.
5. Know the exception process - Tolerance breach leads to exception report, then potentially an exception plan. Understand this sequence.
6. Watch for scenario questions - When given a scenario where a project is going off track, consider whether tolerances apply and what action should follow.
7. Distinguish from targets - Targets are what you aim for; tolerances are the acceptable deviation from those targets. Do not confuse these terms.
8. Corporate tolerance source - Remember that project tolerances come from corporate or programme management, not from within the project itself.