Contingency Planning

The last tool and technique of the Plan Risk Responses process is called the contingent response strategy, better known as contingency planning. Contingency planning involves planning alternatives to deal with the risks should they occur. This is different from mitigation planning in that mitigation looks to reduce the probability of the risk and its impact, whereas contingency planning doesn't necessarily attempt to reduce the probability of a risk event or its impacts. Contingency planning says the risk might very well occur, and you better have plans in place to deal with it when it does.

Contingency comes into play when the risk event occurs. This implies you need to plan for your contingencies well in advance of the threat occurring. After the risks have been identified and quantified, contingency plans should be developed and kept at the ready.

Contingency allowances or reserves are a common contingency response. Contingency reserves include project funds that are held in reserve to offset any unavoidable threats to project scope, schedule, cost, or quality. It also includes reserving time and resources to account for risks. You should consider stakeholder risk tolerances when determining the amount of contingency reserves.

Fallback plans should be developed for risks with high impact or for risks with identified strategies that might not be the most effective at dealing with the risk.

In practice, you'll find that identifying, prioritizing, quantifying, and developing responses for potential threats might happen simultaneously. In any case, you don't want to be taken by surprise, and that's the point of the risk processes. If you know about potential risks early, you can often mitigate them or prepare appropriate response plans or contingency plans to deal with them.

As you've no doubt concluded, the purpose of the Plan Risk Responses process is to develop risk responses for those risks with the highest threat to or best opportunity for the project objectives. The Plan Risk Responses process has four outputs: risk register updates, risk-related contract decisions, project management plan updates, and project document updates.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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