The Health and Safety Training Project is part of a programme of strategic expansion, which is important for ABC Company's continued operation. At the end of stage 2, the estimated project costs are greater than the expected benefits in the business case. The project board has reviewed the situation and asked programme management to decide whether the project should be closed prematurely.
Is this an appropriate application of the 'manage by stages' principle, and why?
This is an appropriate application of the 'manage by stages' principle because decisions about closure should be escalated to programme management, unless otherwise instructed. This ensures that the project is reviewed and assessed at critical points, allowing for informed decisions about its continuation based on the current validity of the business case and projected benefits.
Refer Page 24 If the project no longer has a valid business case, and the project board has been delegated the appropriate authority, it will prematurely close the project. Without this authority, the project board will escalate its recommendation for closure to the corporate, programme management or customer decision makers.
The answer is A. Yes, because decisions about closure should be escalated to programme management, unless otherwise instructed. In PRINCE2, if the project board thinks the project tolerances will be breached, they no longer have authority to continue with the project and must escalate the situation back up to corporate, programme management, or the customer1. This is part of the ‘manage by stages’ principle, which involves reviewing the project at the end of each stage and deciding whether to proceed with the next stage2.