Exception Management
Exception Management forms a critical component within PRINCE2's Progress theme, focusing on how to handle situations where projects deviate significantly from their approved tolerances. When a forecast indicates that tolerances will be exceeded, this constitutes an exception that must be formally addressed. The Project Manager must immediately notify the next management level via an Exception Report, which details the nature of the deviation, its impact on objectives, available options, and recommendations. Following this notification, the Project Board typically requests an Exception Plan that outlines how to recover from the deviation or proposes revised objectives. This process ensures that authority levels are respected—when a management level forecasts it will exceed its delegated tolerances, decision-making authority returns to the level above. Exception Management exemplifies PRINCE2's 'Manage by Exception' principle, allowing senior management to focus attention only when significant issues arise rather than being involved in day-to-day operations. It creates a controlled escalation path that ensures appropriate governance while maintaining efficiency. The process also supports the 'Learn from Experience' principle by documenting deviations and responses, creating organizational knowledge for future projects. Exception Management connects closely with Risk Management, as many exceptions stem from realized risks or emerging threats. Effective Exception Management requires clear tolerance definitions at project initiation, regular and accurate progress monitoring, and honest reporting of forecasts—even when they indicate problems. This transparent approach to managing deviations is fundamental to maintaining control and ensuring that projects remain viable and aligned with business justification.
Exception Management in PRINCE2 - Complete Guide
Exception Management in PRINCE2: A Comprehensive Guide
Exception Management is a critical component of the Progress theme in PRINCE2 methodology. This guide will explain what Exception Management is, why it's important, how it works, and provide tips for answering exam questions on this topic.
What is Exception Management?
Exception Management is the process of handling situations when a plan's tolerances (time, cost, quality, scope, risk, and benefits) are forecast to be exceeded. In PRINCE2, an exception is any situation where a plan's approved tolerances are predicted to be breached. Exception Management provides a controlled way to deal with these situations, ensuring that appropriate decisions are made at the right management level.
Why is Exception Management Important?
Exception Management is essential because it:
1. Maintains control over the project when issues arise
2. Ensures management by exception principle is upheld
3. Provides a structured approach to handling deviations from plans
4. Escalates issues to the appropriate management level
5. Prevents small issues from becoming major problems
6. Maintains stakeholder confidence through transparent issue handling
How Exception Management Works
The Exception Process:
1. Issue Identification: A team member or the Project Manager identifies a potential tolerance breach
2. Exception Report: The Project Manager creates an Exception Report that details:
- The exception and its impact
- Options for addressing the exception
- Recommendation for the preferred option
- Lessons learned
3. Escalation: The Exception Report is escalated to the next management level (e.g., from Team Manager to Project Manager, or from Project Manager to Project Board)
4. Decision: The appropriate management level reviews the Exception Report and decides on action
5. Exception Plan: If approved, an Exception Plan is created to replace the current plan
Types of Exceptions:
Exceptions can occur at different levels:
- Stage exceptions: Handled by the Project Board
- Work Package exceptions: Handled by the Project Manager
- Project exceptions: Escalated by the Project Board to corporate or programme management
Exam Tips: Answering Questions on Exception Management
1. Understand the PRINCE2 principles involved:
- Management by Exception
- Defined Roles and Responsibilities
- Focus on Products
2. Know the tolerance types:
- Time
- Cost
- Quality
- Scope
- Risk
- Benefits
3. Memorize the escalation path:
- Team Manager to Project Manager
- Project Manager to Project Board
- Project Board to Corporate/Programme Management
4. Be clear on documentation:
- Exception Reports contain analysis of the situation
- Exception Plans replace existing plans
- They follow the same format as the plan they replace
5. Focus on roles in Exception Management:
- Project Manager: Creates Exception Reports for stage exceptions
- Project Board: Reviews Exception Reports and approves Exception Plans
- Team Manager: Reports Work Package exceptions to the Project Manager
6. Common exam question scenarios:
- Identifying when exceptions should be raised
- Determining which management level handles specific exceptions
- Identifying appropriate responses to exceptions
- Understanding the content requirements for Exception Reports and Plans
7. Remember that:
- Not all issues require exceptions - only forecast tolerance breaches
- Exception Plans always require approval from the level that set the tolerance
- Exception Management is about escalation and decision-making at the right level
When answering exam questions, always relate your answer back to the core PRINCE2 principles, particularly Management by Exception. Consider the specific roles involved and the appropriate documentation needed in the scenario described.
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