7.3 Plans: Three Levels & Product-Based Planning
Key Takeaways
- The Plans practice facilitates communication and control by answering 'what, who, how, when, and how much' at three levels: Project Plan, Stage Plan, and Team Plan.
- The Project Manager owns the Project Plan and Stage Plan; the Team Manager owns the Team Plan; an optional Exception Plan is produced by the PM when a stage tolerance is forecast to be breached.
- Product-based planning is a four-step technique: write the Project Product Description, create the Product Breakdown Structure, write the Product Descriptions, then create the Product Flow Diagram.
- Each plan level defines tolerances per performance target, so control is delegated downwards without the board losing visibility of the overall project.
The Plans practice is PRINCE2's answer to the what, who, how, when, and how much of a project. Its purpose is to facilitate communication and control: a plan is a management product that sets out how a scope of work will be delivered, against which progress can be measured. PRINCE2 is explicit that a plan is not just a schedule — it must show the products to be delivered, the activities to produce them, the resources required, the dependencies, the tolerances, and the controls that will be applied.
Three Plan Levels
PRINCE2 structures planning into three levels, each serving a different audience and providing a different degree of detail.
| Plan Level | Owner | Audience | Scope & Detail |
|---|---|---|---|
| Project Plan | Project Manager | Project Board, corporate/programme | Whole project; high-level timeline, costs, major dependencies, project-level tolerances |
| Stage Plan | Project Manager | Project Board (for authorisation), PM (for control) | One management stage; enough detail for the PM to manage day-to-day within stage tolerances |
| Team Plan | Team Manager | Project Manager | One team's Work Package; the most detailed level, covering the team's work and team-level tolerances |
The Project Plan is the board's view of the whole project. It is produced during initiation and updated at each stage boundary. It carries the project-level tolerances set by the board across the six performance targets (time, cost, quality, scope, benefits, risk). Because the board uses it for oversight, it stays at a relatively high level — it is not a day-to-day management tool.
The Stage Plan is the PM's working document for the current management stage. It is produced near the end of the previous stage as part of managing a stage boundary and is approved by the board before the stage begins. It is more detailed than the Project Plan because the PM uses it to monitor progress, assign work, and control the stage within its tolerances. PRINCE2 requires that the current stage plan is always detailed; the next stage plan is produced at the boundary and approved before the stage starts.
The Team Plan is owned by the Team Manager and covers the work assigned through a Work Package. It is the most detailed level. Team Plans are optional in the method — on a small project the PM may do the work directly without Team Managers — but where Team Managers exist, they produce and manage their own Team Plans against the tolerances in the Work Package.
The Optional Exception Plan
If a stage tolerance is forecast to be breached, the PM cannot simply continue. The PM produces an Exception Plan to show how the project will recover, and presents it to the board for approval. The Exception Plan replaces the remaining part of the current Stage Plan and covers the work needed to bring the project back within tolerance (or to agree a new tolerance). It is produced only when an Exception Report has escalated the problem; it is not a routine plan.
Product-Based Planning Technique
All three plan levels are built using the product-based planning technique, which keeps plans focused on what the project will deliver before worrying about when. The technique has four steps, always applied in this order:
| Step | Activity | Output |
|---|---|---|
| 1 | Write the Project Product Description | A single, high-level description of the final product, its purpose, composition, quality criteria, and acceptance method |
| 2 | Create the Product Breakdown Structure (PBS) | A hierarchical decomposition of the project product into its major and minor products |
| 3 | Write the Product Descriptions | A description for each product in the PBS: purpose, composition, derivation, quality criteria, development skills required |
| 4 | Create the Product Flow Diagram (PFD) | A dependency diagram showing the sequence in which products must be developed |
Step 1 is always the Project Product Description — the single most important product in the project. Step 2 breaks that product down into its constituent products. Step 3 writes a Product Description for each product, which later becomes the quality check list when the product is delivered. Step 4 sequences the products by dependency so that the schedule can be built. A common exam trap is to reverse steps 3 and 4, or to skip the Project Product Description and jump straight to the PBS.
Tolerances in Plans
Every plan defines tolerances for each performance target. The Project Plan carries project-level tolerances set by the board; each Stage Plan carries stage-level tolerances delegated by the board; each Team Plan (or Work Package) carries team-level tolerances delegated by the PM. This layered tolerance model is what allows delegated control: the Team Manager can make decisions within their team tolerances without escalating to the PM, and the PM can manage within stage tolerances without escalating to the board. Only a forecast breach of a tolerance triggers escalation.
Exam Scenario Patterns
The exam tests three things here. First, which plan level for which audience — the board sees the Project Plan; the PM uses the Stage Plan; the Team Manager owns the Team Plan. Second, the sequence of product-based planning steps — Project Product Description, then PBS, then Product Descriptions, then PFD. Third, who owns which plan — the PM owns the Project and Stage Plans; the Team Manager owns the Team Plan; the PM produces the Exception Plan when a stage tolerance is forecast to be breached.
A Team Manager is planning the work their team will deliver against an approved Work Package. Which plan level are they producing, and who owns it?
A project is using product-based planning. Which sequence of steps is correct?