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PRINCE2 - Directing a Project (DP) part 4

Authorising a Stage or Exception Plan (DP3)

Fundamental principles

Work should not start on a stage until the Project Board give approval.
For this to happen the project must be broken down into manageable stages.
At the end of each stage the Project Board must approve whether to continue or not.

It is also important to recognise problems early and react to them appropriately and swiftly.


This process authorises every stage (except for the initiation and the first stage) plus any Exception Plans.

Process description

The objective is to decide on whether to authorise the next stage and hence to commit resources.

This is based on:

  • A view of the current status of the project
  • A detailed forecast of the commitment of the resources required for the next stage of the project.
  • A detailed forecast of the products to be created in the next stage of the project.
  • A reassessment of the likely project end date
  • A reassessment of the risk situation
  • A reassessment of the Business Case and the chances of achieving the expected benefits

The Project Manager will usually present the status of the current project and include the results of the previous stage compared with expectations.

The detailed forecast comes from the plan for the next stage for which the Project Manager is seeking approval.
The detailed forecast should match the updated or revised Project Plan.

The updated Business Case and Project Plan are compared to the original documents at the start of the project and those at the beginning of the stage just completed. The aim is to check that the project is still viable.

Any change in the Business Case from the Project Mandate or Project Brief must be communicated to corporate or programme management.

As part of the approval of the next stage the Project Board will set the tolerances.

Any potential for exceeding tolerances of a stage should be communicated to the Project Board as early s possible.
This may be via Highlight Reports followed later by an Exception Report.
This is considered in process Giving Ad Hoc Direction (DP4).
The Exception Report explains the cause of the deviation, the current situation, the options, the Project Manager’s recommendation and the impact on the Project Plan, Business Case and risks.

If the tolerances for a stage might be exceeded the Project Board may request that the Project Manager prepares an Exception Plan for the approval of the Project Board.
An updated Project Plan, Business Case and Risk Log should accompany the Exception Plan.

In addition, the Project Board should consider whether the matter should be referred upwards to corporate or programme management.
The Project Board is responsible for gaining any decisions external to the project for any potential deviations from beyond the project tolerances.
This would be the case if the project was part of a programme.

Once authorised the Exception Plan replaces the one that was in trouble.

Before the authorisation of any Stage or Exception Plan the Project Board must bring any changes in the corporate environmental to the attention of the of the Project Manager and dealt with effectively.

Should the Project Board consider the project no longer viable they will instruct the Project Manager to terminate the project and close it down in an orderly manner.
This will involve the Project Manager triggering the process Closing a Project (CP).


The Project Board is responsible for this sub-process based on information provided by the Project Manager.
Advice would be given by the Project Assurance roles.

Information needs
Management informationUsageExplanation
Next Stage Plan or Exception PlanApprovalPlan for which the Project Manager is seeking approval
Project PlanInputTo allow the Project Board to review the whole project is still justified.
Project Initiation DocumentInputUsed to provide a baseline against which to assess the advisability of any deviations.
Project management team changesInputTo allow the Project Board to ratify any appointment changes.
Risk LogInputCheck that the risks are still acceptable.
End Stage ReportInputReport of stage just completed. Helps assessment of current situation.
Request for authorisation to proceedInputUsually a stage approval form for the Project Board to sign.
Authorisation to proceed or trigger for premature closeOutputAuthorisation to proceed with the submitted plan. During project initiation, the Project Board decides how formal or informal it wishes the approval to be. The Project Board, of course, has the authority to reject the plan.

It may ask for a resubmission or decide to close the project.

The Project Board also defines the levels of tolerance for the next stage or instruction from the Project Board to the Project Manager to close the project down before its expected end.
Stage Plan or Exception PlanOutputApproved by the Project Board.
Progress informationOutputThe Communication Plan may indicate the need to advise an external group of progress.

These are given in tabular form in the file ‘DP3 authorising a stage or exception plan.doc’ in the product package.

Key criteria

  • Was everything expected of the current stage delivered? If not, was this with the approval of the Project Board?
  • Are there clear statements about what is to be done about anything not delivered? Does a Project Issue cover it?
  • Is its delivery included in the next Stage Plan (or Exception Plan)
  • Is the project still viable and does it remain focussed on the same business need?
  • Are the risks still acceptable?
  • Are the countermeasures still valid, including any contingency plans?
  • Does the Project Board want to, and is it able to, commit the resources needed for the next stage of work?
  • In projects that have a different supplier for each stage, is it documented and agreed by all suppliers that the key project information will be made available to subsequent suppliers?

End stage assessments with the Project Board may not be easy to set up owing to commitments of the members.
Get these dates into the diary as soon as possible (usually at the end of the previous stage assessment).
These dated may not fall exactly at the end of a stage.
As people may not be available for the meetings any stage boundary issues should be discussed somewhere near the end of the stage before it actually ends.

There should be no surprises. Make sure that informal discussion occurs between the Project Manager and the Project Board.
This will allow problems to be sorted out before asking for formal authorisation for the next stage.

Where the project is part of a programme coordination with programme management may be necessary if any required programme approvals are not to be delayed.

If tolerances may be exceeded at some future point (even if alright at the moment) then this must be raised with the Project Board as soon as possible as an exception. This might arise, for example, if equipment costs will exceed expectations 1 year ahead.

If the deviations from tolerance are significant it may be better to stop the current project and restart with a new Project Initiation Document that reflects the new situation.

For smaller projects the Project Board and the Project Manager may agree to hold an informal end stage assessment and give authorisation for the next stage.
However, it is good practice to document the authorisation for the next stage and have it signed-off and filed to avoid any misunderstandings later.

Make sure the project is not affected by delays in customer or supplier management chains.

This product contains EVERYTHING in the publications:

Managing Successful Projects with PRINCE2 - 2005 edition
Managing successful Projects with PRINCE2 – 2009 edition
Directing Projects with PRINCE2.
The Complete Project Management package.

And much more besides - at a fantastic price.