Directing a Project Process

The correct approach is to escalate this issue to the Project Board as an exception.

While the Project Manager correctly notes that the changes fall within stage tolerances (8 weeks added and 18% cost increase), several critical factors require immediate Project Board attention:

1. Strategic Nature of the Issue: The regulatory changes affect three key markets and require substantial modifications to core platform capabilities (data handling). This represents a fundamental change to the project's scope and deliverables, not merely a timing or cost variance.

2. Business Case Impact: An 18% cost increase at Stage 2 of 5, combined with substantial scope modifications, likely threatens the viability of the overall Business Case. The cumulative effect across remaining stages could be significant, and the Project Board must assess whether the project remains justified.

3. Regulatory Compliance Implications: In the pharmaceutical industry, regulatory compliance is not an operational detail but a strategic concern requiring corporate-level assessment. The compliance department's identification of these requirements suggests potential legal and business risks that exceed the Project Manager's authority to resolve independently.

4. PRINCE2 Exception Principle: Even when variances fall within stage tolerances, exceptions should be raised when the issue threatens project objectives, business justification, or requires strategic decisions beyond the Project Manager's delegated authority.

The other approaches are inadequate because:

• Simply proceeding and reporting in the End Stage Report delays critical strategic decisions and could result in further investment in a project whose Business Case may no longer be viable.

• Requesting guidance without formally raising an exception understates the severity and doesn't trigger the proper governance response required for strategic decisions.

• Updating the Risk Register and implementing changes treats this as a routine management issue when it requires strategic Project Board decision-making about the project's continued viability and approach.

In PRINCE2 7, the 'Managing a Stage Boundary' process requires formal authorization from the project board before any new management stage can begin. This is a fundamental principle of the method's governance structure.

The correct approach is for the project board to arrange an ad-hoc decision-making meeting with available members or through correspondence to review the End Stage Report and authorize or reject the Stage 3 Plan before any stage work begins. This maintains proper governance while addressing the timing constraints.

Key principles supporting this answer:

1. Authorization is mandatory: The project board must authorize each management stage before work begins. This is not optional or deferrable, regardless of previous performance.

2. Flexible decision-making: PRINCE2 recognizes that project boards may need to make decisions through various means including ad-hoc meetings, written correspondence, or electronic communication when face-to-face meetings are not feasible.

3. Governance cannot be bypassed: Good past performance does not justify proceeding without authorization. Each stage boundary is a critical decision point.

4. Accountability: The project board is collectively accountable for the project's direction and must make authorization decisions before commitments are made.

Why the other options are incorrect:

Delegating authorization to the project manager violates the fundamental separation of responsibilities in PRINCE2. The project board directs; the project manager manages. Authorization decisions cannot be delegated to the project manager as this removes the essential governance control that stage boundaries provide.

Waiting three weeks for all members unnecessarily delays the project when alternative decision-making mechanisms exist. PRINCE2 emphasizes pragmatic governance that doesn't create artificial delays.

Proceeding based on one board member's recommendation without proper authorization process breaches governance requirements. The project board acts collectively, and informal suggestions from individual members do not constitute proper authorization.

The project board must find a way to make a timely but proper authorization decision through available channels.

The correct answer is Exception Report.

In PRINCE2 7, when a stage or project tolerance is forecast to be exceeded, the Project Manager must escalate this to the Project Board through an Exception Report. This management product provides the Project Board with the essential information they need to understand:

• The nature and impact of the exception
• The options available to address the situation
• The Project Manager's recommendation
• The implications of each option

The Project Board cannot make an informed decision about authorizing an Exception Plan without first reviewing the Exception Report. This report is the formal mechanism for escalating exceptions and requesting authority to deviate from the current Stage Plan or Project Plan.

Why the other answers are incorrect:

An Issue Report is used to document and track individual issues, problems, or concerns during the project. While issues may contribute to an exception situation, the Issue Report itself is not the management product that the Project Board reviews to authorize an Exception Plan.

A Highlight Report is a progress report that the Project Manager sends to the Project Board at agreed intervals during a stage. It provides a summary of stage progress but is not specifically used for exception situations requiring authorization of an Exception Plan.

A Checkpoint Report is used by Team Managers to report progress to the Project Manager at team level. This is an internal team-level report and is not reviewed by the Project Board for exception decisions. The Project Board operates at a higher governance level and requires the Exception Report for such critical decisions.