Controlling a stage I: authorizing work packages

Controlling a stage is the process the project manager uses to run a delivery stage. It starts when the board authorizes the stage, and it ends when the stage has been completed and the boundary decision has been made, or when the board stops the project. Its purpose is to assign the work, monitor it, deal with issues and risks, report progress to the board and take corrective action so that the stage stays within its tolerances. This lesson looks at the first and most important of its activities: authorizing work packages. Lessons 3 and 4 cover the rest of the process.

The activities of controlling a stage

Study guides describe eight activities in controlling a stage. They fall into three groups. The work package activities assign and receive the work. The monitoring and reporting activities keep track of the stage and keep the board informed. The issue and exception activities deal with problems and decide whether they can be handled within the stage or must be escalated.

The activities do not run in a fixed order. Authorizing work packages tends to happen early in the stage, but new work packages can be authorized at any point, for example when a change is approved or when one team finishes and the next can start. Reviewing stage status happens regularly, perhaps weekly. Capturing issues happens whenever something new arrives. The process is better thought of as a control loop than as a sequence.

What a work package is

A work package is the set of information about one or more required products, collated by the project manager to pass responsibility for their delivery formally to a team manager or team member. It is an agreement, not an instruction thrown over a wall. The team manager must be able to say whether the work can be done within the constraints, and the project manager must be able to hold the team manager to what was agreed. The work package is the main control between the managing and delivering levels.

Authorizing a work package

Authorizing a work package means agreeing its contents with the team manager and then formally handing over responsibility. The project manager prepares the work package from the stage plan, product descriptions and the relevant management approaches. The team manager reviews it, in managing product delivery, and may negotiate: the effort may be underestimated, a constraint may be unworkable, or a dependency on another team may be missing. Once both agree, the project manager authorizes it and updates the stage plan and the registers. Work starts only when the work package is authorized.

The project manager should also make sure that the team manager understands the tolerances and what happens when they are threatened. Work package tolerances are set by the project manager within the stage tolerances, and they are normally tighter than the stage tolerances so that the project manager keeps some room to move money or time between work packages. If a team manager forecasts that a work package will exceed its tolerances, the team manager raises an issue to the project manager. The team manager does not escalate to the board.

Checking that work package tolerances nest

Because work package tolerances sit inside stage tolerances, the project manager should check that the worst case of all work packages together does not already use up the whole stage tolerance. If it does, the project manager has no room to absorb problems and will escalate to the board far more often than necessary. The code below performs that check for the pilot stage.

stage_budget, stage_tol = 1450, 0.05   # stage cost +5 %
wps = {  # name: (cost, tolerance fraction)
    "WP1 installation": (980, 0.03),
    "WP2 network": (190, 0.05),
    "WP3 billing interface": (160, 0.05),
    "WP4 customer communication": (50, 0.05),
}
pm_and_contingency = 70
worst = sum(c * (1 + t) for c, t in wps.values()) + pm_and_contingency
stage_limit = stage_budget * (1 + stage_tol)
used = sum(c * t for c, t in wps.values())
print(f"stage upper limit {stage_limit:,.1f}k; work packages at worst case {worst:,.1f}k")
print(f"work package tolerances use {used:,.1f}k of the stage's {stage_budget * stage_tol:,.1f}k tolerance ({used / (stage_budget * stage_tol):.0%})")
print("nests" if worst <= stage_limit else "does not nest")

stage upper limit 1,522.5k; work packages at worst case 1,499.4k
work package tolerances use 49.4k of the stage's 72.5k tolerance (68%)
nests

The work package tolerances use about 68 % of the stage's cost tolerance, leaving the project manager about 23 thousand of room to absorb problems before the stage limit is reached. Using most but not all of the stage tolerance in this way is a sensible pattern: the team managers have enough freedom to manage their own work, and the project manager keeps a reserve.

Work packages and contracts

Two of Ridgeline Water's work packages go to internal teams and one goes to an external supplier. For an internal team, the work package is the whole agreement. For a supplier, the work package sits alongside a contract. The contract sets the commercial terms: price, payment, warranties, liability and termination. The work package sets the management terms for this piece of work: products, quality criteria, tolerances, reporting and escalation. The two must be consistent. If the contract says a fixed price for 3,000 meters and the work package says 2,800 after the exception plan, a contract variation is needed, handled through the commercial management approach.

Ridgeline Water's installation contract with Northline Metering includes holdback under the provincial construction and prompt payment legislation that applies to the installation work, so each progress payment holds back a percentage until the work is substantially complete and the lien period has passed. The work package's approval method gives the quality inspector's sample results to the payment certifier, so that the evidence for payment and the evidence for product approval are the same.

Work packages in agile delivery

PRINCE2 works with agile delivery, and work packages adapt naturally. For the billing interface, Ridgeline's IT team works in two-week sprints. The project manager authorizes one work package for the interface with a fixed time and cost, and lets the scope flex within agreed limits: the must-have features for billing accuracy are fixed, while some reporting features are could-haves. The team's sprint reviews act as the quality method, and the checkpoint report frequency matches the sprint cycle. What the project manager must not do is authorize a work package with no defined products, no acceptance criteria and no tolerances, and call it agile.

Who does what

Authorizing a work package involves several roles. The project manager prepares and authorizes it. The team manager reviews it and agrees it. Project assurance may check that the work package reflects the quality, risk and commercial approaches and that the approval method gives the user side a proper say. Project support updates the registers and the configuration records. The board is not normally involved, unless the work package needs a decision outside the project manager's authority, such as a supplier change.