In project management, project risk management (Contingency Planning) is given a lot of importance and considered a vital element that contributes effectively to project success.
Any situation which may adversely affect the performance, quality or timeline of the project is considered as a risk. You can use templates/tool of contingency for mitigation of any type of Irish during any phase of the project lifecycle.
Related Article: Risk Register Template
It’s the responsibility of project managers to devise a mitigation strategy ahead of project execution to minimize the likelihood of risk occurrence and impact on the project. In project risk management following steps are taken to reduce the likelihood of risk occurrence;
- Identification of Risk
- Quantitative and Qualitative Risk Analysis
- Planning of Risk Responses
- Implementation of Responses
- Monitoring Risks
Despite taking the above measures, a cataclysmic situation may happen that will make all project efforts in waste such as political mishaps or natural disasters. But these cataclysmic situations aren’t just limited to natural disasters and major crises.
Why is Contingency Planning Important for Business?
It may be something like the loss of key asset or resource, loss of data or un-addressable conflicts in the relationship (Requirement Management) with customer or supplier. To deal with such a situation, there must a Plan B in place.
Plan B is sometimes referred to as a Contingency plan. These contingency plans aren’t just negative. There are two basic types of contingency plans;
- Negative Contingency Plan
- Positive Contingency Plan
Unlike crisis management, a contingency plan isn’t a reactive approach. It is a proactive approach that is set up in place well before and keeps the project team prepared to deal with any unpredicted circumstance.
What aspects a Contingency Plan should Cover?
To make an effective contingency plan, it must include the following key elements;
- Scenarios: Based on project risk management outcomes, it focuses on the most devastating and likely scenarios.
- Triggers: It defines what exactly will cause to put a contingency plan into action.
- Responses: It’s a brief overview of actions/strategies which will be applied in response to scenarios.
- Who to Inform: It defines the key stakeholder to inform at earliest and communication strategies according to the situation.
- Key Responsibilities: It contains RAM (Responsibility Assignment Matrix) to define key responsibilities while a contingency planning is in action.
- Timeline: It describes the detailed action plan of activities for different possible potential scenarios.
How to make a Contingency Plan (5 Steps)?
A contingency plan is a provident approach, it required a lot of brainstorming and research to make an effective contingency plan. Below is a simple 5 steps approach that can be followed to make an effective contingency plan;
Resources Identification and Prioritizing:
In this step team meetings and brainstorming sessions are organized for identification of project key resources such as teams, equipment and their prioritization based on important and valuable for the project.
Key Risks Identification:
With the help of mind mapping and brainstorming techniques, potential catastrophic situations are identified. It’s usually a part of the project risk management stage.
Contingency Plan Drafting:
In drafting technique, mainly focus on responsibility and project time-line according to the desired action plan. You can also help through project launch checklist template & configuration management techniques.
Contingency Plan Presentation:
After drafting and approval of the contingency plan, it’s important to present it to all stakeholders and make them understand it clearly to avoid any confusion which may cause trouble in the need of the hour.
Contingency Plan Upgradation:
It is important to reconsider and revise the contingency plan during the project lifecycle. It will help to better align it with the project resources and timeline (Check Project Management Template).
In addition, for more detail about the Contingency Planning template, and importance in project management you can contact us.