5.4 Progress Practice & Control Mechanisms

5.4 Progress Practice & Control Mechanisms

Planning establishes how a project intends to achieve its objectives. However, plans alone do not guarantee success. In PRINCE2 7, the Progress Practice establishes the mechanisms required to monitor actual achievements against planned baselines, forecast future performance, control deviations, and provide governance bodies with the information needed to make informed decisions.

PRINCE2 7 Purpose: The purpose of the Progress practice is to establish mechanisms to monitor and compare actual achievements against those planned, provide a forecast for the project objectives and overall project viability, and control any unacceptable deviations.

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Management Stages vs. Technical Stages

A central concept in PRINCE2 progress control is dividing the project into discrete decision-making intervals called Management Stages.

Management Stages

• Definition: Partitioning of the project into management intervals for which the Project Board authorizes resources and grants stage tolerances to the Project Manager.
• Mandatory Requirement: PRINCE2 requires a minimum of two management stages: an Initiation Stage (to detail plans and the Business Case) and at least one Delivery Stage.
• Decision Gateways: At the end of each management stage, the Project Board conducts an End Stage Review to decide whether to authorize the next stage or terminate the project.
• Key Factors Influencing Stage Boundaries: Project risk profile, executive control requirements, commercial payment milestones, and key technical decision points.

Technical Stages

• Definition: Groups of technical activities categorized by skill sets, technical design phases, or manufacturing cycles (e.g., Requirements Gathering, Architectural Design, Testing, Deployment).
• Key Distinction: Technical stages often overlap or span across multiple management stages. In PRINCE2, governance is driven by management stages, not technical stages.

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The 7 Performance Targets and Tolerances

Control in PRINCE2 relies on setting performance targets and granting permissible margins of variation—known as Tolerances—across seven key dimensions:

PRINCE2 7 Expansion: PRINCE2 7 features seven performance targets by explicitly adding Sustainability alongside Time, Cost, Quality, Scope, Risk, Benefit, and Sustainability.

1. Time Tolerance: Permissible variance on target completion dates (e.g., $\pm 2\text{ weeks}$ on stage completion).
2. Cost Tolerance: Permissible variance on financial budgets (e.g., $\pm $50,000$ or $\pm 5%$ of stage budget).
3. Quality Tolerance: Permissible variance on product specifications (e.g., server uptime between $99.9%$ and $99.99%$).
4. Scope Tolerance: Permissible variance in deliverable features, managed via MoSCoW prioritization (e.g., all Must Haves required, Should Haves subject to tolerance).
5. Risk Tolerance: Thresholds on overall risk exposure (e.g., aggregate financial risk exposure must not exceed $$100,000$).
6. Benefit Tolerance: Permissible variance on business return expectations (e.g., annual operational savings target of $$500,000 \pm 10%$).
7. Sustainability Tolerance: Permissible variance on environmental and social metrics (e.g., carbon emissions limit of $\le 50\text{ tonnes CO}_2\text{e} \pm 5%$).

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Tolerance Cascade Across Governance Levels

Tolerances are granted downward through the four project governance levels, establishing clear boundaries of authority:

┌────────────────────────────────────────────────────────┐
│         CORPORATE / PROGRAMME / PORTFOLIO              │ Sets Project Tolerances
└───────────────────────────┬────────────────────────────┘
                            ▼
┌────────────────────────────────────────────────────────┐
│                    PROJECT BOARD                       │ Grants Stage Tolerances
└───────────────────────────┬────────────────────────────┘
                            ▼
┌────────────────────────────────────────────────────────┐
│                   PROJECT MANAGER                      │ Grants Work Package Tolerances
└───────────────────────────┬────────────────────────────┘
                            ▼
┌────────────────────────────────────────────────────────┐
│                    TEAM MANAGER                        │ Delivers within Work Package Limits
└───────────────────────────┴────────────────────────────┘

Governance Level Responsibilities:

• Corporate / Programme Management: Sets overall Project Tolerances. If project tolerances are breached, the Project Board escalates to corporate management.
• Project Board: Sets Stage Tolerances for the Project Manager. If stage tolerances are breached, the Project Manager escalates to the Project Board.
• Project Manager: Sets Work Package Tolerances for Team Managers. If Work Package tolerances are breached, the Team Manager escalates to the Project Manager.
• Team Manager: Operates within Work Package tolerances and reports progress via Checkpoint Reports.

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Exception Management & Escalation Workflow

PRINCE2 operates on the principle of Management by Exception. As long as targets are forecast to remain within granted tolerances, managers operate autonomously without bothering higher governance levels.

However, as soon as a manager forecasts that performance will breach granted tolerances, an Exception occurs, triggering mandatory escalation:

1. Work Package Exception: The Team Manager forecasts a breach of Work Package tolerances $\rightarrow$ Immediately notifies the Project Manager.
2. Stage or Project Exception: The Project Manager forecasts a breach of Stage or Project tolerances $\rightarrow$ Immediately drafts and submits an Exception Report to the Project Board.
3. Board Review: The Project Board evaluates the Exception Report options:
   • Option A: Approve tolerance increase or scope reduction.
   • Option B: Request the Project Manager to create an Exception Plan to replace the current plan.
   • Option C: Terminate the project if business viability is destroyed.
4. Exception Plan Execution: If requested, the Project Manager drafts an Exception Plan (covering the remaining portion of the current stage or project). Upon formal Board approval, the Exception Plan replaces the baselined plan.