Guide to Tolerances for Progress Control: PRINCE2 Practitioner v7
What are Tolerances?
In PRINCE2, a tolerance is the permissible deviation from a plan's target that is allowed before the deviation must be escalated to the next level of management. It is the practical mechanism that enforces the principle of Manage by exception. If a project remains within tolerance, the Project Manager has the authority to proceed without disturbing the Project Board. Tolerances can (and should) be defined for six aspects of project performance: Time, Cost, Quality, Scope, Benefits, and Risk.
Why are they Important?
Tolerances are crucial for efficiency. Without them, the Project Board would be forced to micro-manage, approving every minor delay or cost variance. Tolerances grant autonomy to the Project Manager to manage stages, and to Team Managers to manage Work Packages, ensuring that senior management time is only used for significant decisions (exceptions).
How it Works: The Hierarchy
Tolerances flow down through the management levels:
1. Project Tolerances: Set by Corporate, Programme Management, or the Customer. If these are forecast to be exceeded, the Project Board must escalate the issue upwards.
2. Stage Tolerances: Set by the Project Board when authorizing a stage. If the Project Manager forecasts these will be exceeded, they must write an Exception Report for the Project Board.
3. Work Package Tolerances: Set by the Project Manager when authorizing a Work Package. If the Team Manager forecasts these will be exceeded, they must raise an Issue to the Project Manager.
How to Answer Questions regarding Tolerances
In the Practitioner exam, questions often present a scenario where a project metric is slipping. To answer correctly:
1. Identify the Plan Level: Determine if the question refers to the Project Plan, Stage Plan, or a Team Plan (Work Package). This dictates who is accountable.
2. Identify the Aspect: Is the issue related to Cost, Time, Quality, Scope, Risk, or Benefits?
3. Compare Forecast vs. Limit: Look for the specific tolerance numbers in the scenario. Has the forecast exceeded the allowed deviation?
4. Select the Exception Action: If the tolerance is forecast to be breached, the correct answer usually involves creating an Exception Report or requesting advice from the level above.
Exam Tips: Answering Questions on Tolerances for Progress Control
Tip 1: 'Forecast' is Key. You do not wait for a tolerance to be breached physically before acting. The moment you have sufficient evidence to forecast a breach, it is an exception. Look for keywords like 'predicted to' or 'estimated to' in the question.
Tip 2: Scope Tolerance Nuance. Scope tolerance questions can be tricky. They often involve MoSCoW prioritization. For example, dropping a 'Could Have' item is usually within tolerance, but dropping a 'Must Have' item almost always breaches tolerance unless specifically stated otherwise.
Tip 3: Plus and Minus. Remember that tolerances apply to both over-delivery and under-delivery. Finishing a stage too early or too cheaply can be just as problematic (impacting resource scheduling) as finishing late. If the scenario says the project will save 50% of the budget, check if there is a 'minus' tolerance defined. If it exceeds the limit, it is an exception.