Continuing her series on the Most Common Questions from PRINCE2 Foundation Training, Lead Trainer Michelle Rowland addresses some of the most frequently asked questions from Chapters 7 through to 10 of the PRINCE2 textbook.
Why do we have three levels of plan in a PRINCE2 project?
The three levels of plan in a PRINCE2 project are:
A project plan is a high-level plan that covers the entire project, highlighting key decision points and major products throughout the project. It provides the project board with the overall cost and time for the project and is a key input to the project board decision-making.
A stage plan is a more detailed view of one stage shown on the project plan and is produced at the end of each stage in preparation for the following one; each stage boundary represents a key decision point highlighted in the project plan. It provides the Project Manager with more detailed information about products to be produced within the stage, the time and cost of the stage plus activities required and is therefore the basis for day-to-day management.
A team plan (optional) is a more detailed breakdown of a stage plan and is used by the Team Manager in order to allocate work to team members and enables them to monitor work.
What is the difference between avoiding a threat and reducing a threat?
Avoiding a threat typically involves changing a project so that the risk can no longer occur. If the risk cause is that you could be late to work as you have a long commute, booking a hotel next to where you work would avoid the threat as the risk cause is the long journey. To reduce a threat (reduce the probability and/or impact of it) you would leave for work earlier. In a project situation we can seek to avoid a threat, but this is often too costly or has too great an impact on project objectives, so often we seek to reduce the threat instead.
How do you transfer a risk?
This is about transferring the financial impact of a risk, for example, by having insurance or clauses in a contract with the supplier that would transfer some of the financial burden on to them and off the customer should a risk occur. Careful consideration needs to be given to what forms of contract terms are permissible. Consider a summer fête: if it rains the rides cannot operate; to transfer the risk you would take out insurance to cover this and if it rains the lost income from the rides is recovered from the insurer if the rides don’t run.
What is the difference between a request for change, an off-specification and a problem or concern?
A request for change is typically when a customer makes a request to add to or change the scope of the project or the quality of a product. This is something the customer has to pay for. For example, if you were project managing an extension on a house and the customer wants to add another window they need to pay to cover the extra costs as it’s something that wasn’t in the original plan.
An off-specification is where a supplier has made a mistake, either by failing to deliver a product or not meeting the quality criteria. If the supplier didn’t fit a window that was in the original plan then they are financially responsible for supplying and fitting the missing window.
A problem or a concern is simply, for example, when someone involved in the project is off sick or a supplier is no longer available.
What happens if your project board refuses to set tolerances of any kind on a project?
PRINCE2 is based around the principle of manage by exception. In order to follow this principle the project boards needs to set tolerances as a minimum for time and cost within a project. As long as the forecast still falls within the tolerances the Project Manager can handle an issue. If it’s forecast to go beyond the tolerances the Project Manager knows to escalate to the project board.
However, if the project board refuses to set tolerances then that leaves Project Managers with two options. One: escalate everything – any over- or under-spend, early or late delivery will need to be escalated to the project board – no matter how insignificant. Option two: the Project Manager becomes cavalier and escalates nothing but this involves the Project Manager bearing the full risk and going beyond their authority as this is not defined! In either case, there is a significant risk of overspend or project delay and the project board is either unaware of what is happening or is in fact acting as the Project Manager itself by needing to constantly intervene.
Neither situation is acceptable if using PRINCE2 to manage a project!
What is the purpose of splitting the project into stages?
Without separate stages you are trying to deliver everything in one go and it becomes very difficult to know where to start. Stages provide Project Managers with chunks of work to deliver in manageable pieces and enables you to group similar work together, commit funding and commit resources to one stage at a time. Having stages also provides you with the opportunity to stop the project should the project be no longer worthwhile and it also enables you to respond to customer needs and change direction if required therefore becoming more agile.
Read the other blog posts in this series
Most common questions from PRINCE2® Foundation training - Chapters 1-6
Most common questions from PRINCE2® Foundation training - Chapters 11-18
Did Michelle's blog post answer your key questions about this section of the PRINCE2 textbook and help your understanding of the project management methodology? Are there other questions you would like to see answered? Please share your thoughts in the comments box below.