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PRINCE2 Exception Report creation

PRINCE2 uses the principle of management by exception, with tolerances set at each appropriate level, for example project, stage, or work package levels, and the PRINCE2 Exception Report play a vital role in this. Also, the type of tolerance is specified at each level for example time, cost, benefits, scope, risk or quality will be used in creating the PRINCE2 Exception Report .

A PRINCE2 Exception Report  is created whenever a stage plan or project plan is forecast to exceed the relevant tolerance bounds.  At the first instance of forecasting that a tolerance is to be exceeded, the project manager will log it as an issue in the issue register.

The next step is to create the exception plan (based upon the information contained within the PRINCE2 Exception Report ), which is created by the project manager in order to advise the project board that tolerance is forecast to be exceeded as well as to present a range of options and recommendations outlining the actions to take in order to resolve the situation.

Based solely information laid out within the PRINCE2 Exception Report , the project board may choose to:

  • Approve or reject the situation
  • Defer making a decision until later
  • Request more information
  • Brought a concession for the project manager to proceed without the need for any corrective action
  • Instruct the project manager to resolve the problem
  • Give advice and guidance to the project manager
  • Request an exception plan based on one of the options (theirs or the project manager’s)
  • Seek advice and guidance from corporate or programme management
  • Instruct that the project be prematurely closed

The format of an PRINCE2 Exception Report  can be in the form of a document, an email, other form of electronic communication, or it may be given verbally.

PRINCE2 Exception report content

Exception Report title.  

This should described and overview of the exception situation that is being reported

Cause of the exception.  

This describes the root cause of the deviation that led to this exception and deviation from the current plan.  The reasons for the forecast deviation must be clearly stated and analysed.

The project manager will want to inspect the issue register and its impact analysis to help determine the cause.  Also, the project manager should get advice for all appropriate stakeholders such as the specialist team, the team manager, and the individual or group who raised or caused the issue in the first place as part of preparing their PRINCE2 Exception Report.

Consequences of the deviation.

Before any action or recommendations can be made, it must be first understood exactly what the implications for both the project and corporate or programme management are so that informed choices can be made.

Such impacts must be determined from the business, customer, user, and supplier perspectives.  Of particular importance are the implications for the business case, and these must be taken into consideration.  Also be impact on the overall project plan must have been calculated.  A useful checklist when determining such impacts within the PRINCE2 Exception Report are to consider the six variables that would be involved in any project such as:

  • Costs
  • Timescales
  • Quality
  • Scope
  • Risk
  • Benefits

Usual documentation to act as a reference within your PRINCE2 Exception Report in order to determine the impact are:

  • The issue register
  • Stage plan
  • Work package
  • Project initiation documentation
  • Product checklist
  • Quality register

The project manager will almost certainly want to involve the specialist team in helping to describe such impacts as well as to consider options for recovery or minimisation.  Other useful stakeholders to involve when creating the PRINCE2 Exception Report could be the users, customers, or appropriate operational managers.

PRINCE2 Exception Report Options

This lays down the options that are available to resolve the deviation, and for each option what the effect would be on the business case, risks and tolerances.  Wherever possible, several options for recovery should be given as this will give the project board confidence that sufficient thought has gone into considering all possibilities.  Each option must include the risks for such an option as this will assist in making a recommendation based on the project boards risk appetite.

There is a temptation for the project manager to start creating detailed plans around some or all of the options, but this should be resisted as the project board may decide all different actions or consider options of their own.  In such a case the effort involved in creating plans will have been wasted. Keep the PRINCE2 Exception Report simple and precise!

If time is of the essence, the project manager may wish to advise the board verbally that a PRINCE2 Exception Report  is being created and advising them of the options currently being considered within the report.  They may be able to shed some light on their favoured approach or even instruct the project manager to plan a chosen option in more detail.

PRINCE2 Exception Report Recommendation.

This is the project managers recommended option, and it is important to include the reasons why the other options were not considered, and why this option is the chosen one.  Remember, the project board may choose not to take this recommendation, so a project manager would be wise to articulate clearly why this recommendation is being made.

An important source of information for the project manager in both considering options and the recommendation, is the project initiation documentation.  The project plan and the various strategy documents will be helpful in the creation of your PRINCE2 Exception Report .

Of particular assistance is the project product description containing the acceptance criteria and project objectives.  The current stage plan will also be used as a source of reference.

The project manager is advised to have discussions with any or all appropriate stakeholders such as the senior user, senior supplier, project board executive, departmental or operational managers such as those responsible for finance, procurement, legal, end-product operators, to ensure that their PRINCE2 Exception Report contains up-to-date and accurate information.

PRINCE2 Lessons Log.

This should capture any lessons that can be learned from this PRINCE2 Exception Report  situation and consideration made whether such lessons can be applied for the remainder of this project and/or future projects.  Such as lessons should be added to the lessons log. If the project board request that an exception plan is created by the project manager to be reviewed at an exception assessment, then the end stage report will include such lessons.

PRINCE2 Exception Report Summary.

It is worth mentioning that the exception situation may have been caused by an external event that affects the project, indeed, it may be the project board that brought this to the attention of the project manager.  Other sources of information other than those mentioned above are the quality register, the checkpoint reports, or highlight reports.

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