Contingency plans are used by smart managers who are aware that there are always risks that can sideline any project or business. Without having a contingency plan in place, you don’t have a risk management recovery plan, which reduces the chances of project success, even if that project plan was made with planning software.
Contingency planning applies to any business venture. Governments, for example, use them to prepare for disaster recovery or economic disruption, such as those caused by the coronavirus pandemic. However, we’ll focus on business and project management contingency plans. Let’s start by defining what a business contingency plan is.
What Is a Business Contingency Plan?
A business contingency plan is an action plan that is used to respond to future events that might or might not affect a company in the future. In most cases, a contingency plan is devised to respond to a negative event that can tarnish a company’s reputation or even its business continuity. However, there are positive contingency plans, such as what to do if the organization receives an unexpected sum of money or other resources.
The contingency plan is a proactive strategy, different from a risk response plan, which is more of a reaction to a risk event. A business contingency plan is set up to account for those disruptive events, so you’re prepared if and when they arrive.
While any organization is going to plan for its product or service to work successfully in the marketplace, that marketplace is anything but stable. That’s why every company needs a business contingency plan to be ready for both positive and negative risk management.
ProjectManager has everything you need to build plans for your company, contingency or otherwise. Make project timelines on Gantt charts, assign work to your team and collaborate in multiple views. Plus, there are dashboards and reports so you can tell the ROI on your projects instantly. Get started today for free.
Contingency Planning In Project Management
In project management, contingency planning is often part of risk management. Any project manager knows that a project plan is only an outline. Sometimes, unexpected changes and risks cause projects to extend beyond those lines. The more a manager can prepare for those risks, the more effective his project will be.
But risk management isn’t the same as contingency planning. Risk management is a project management knowledge area that consists of a set of tools and techniques that are used by project managers to create a risk management plan.
A risk management plan is a comprehensive document that covers everything about identifying, assessing, avoiding and mitigating risks.
On the other hand, a contingency plan is about developing risk management strategies to take when an actual issue occurs, similar to a risk response plan. Creating a contingency plan in project management can be as simple as asking, “What if…?,” and then outlining the steps to your plan as you answer that question.
Related: Free Action Plan Template
How to Create a Contingency Plan
A contingency plan is an action plan, and like any plan, it requires a great deal of research and brainstorming. And like any good plan, there are steps to take to make sure you’re doing it right.
1. Identify and Prioritize Resources
Research your company and list its crucial resources, such as teams, tools, facilities, etc., then prioritize that list from most important to least important.
2. What Are the Key Risks?
Figure out where you’re vulnerable by meeting with teams, executives and stakeholders to get a full picture of what events could compromise your resources; hire an outside consultant, if necessary.
3. Draft a Contingency Plan
If you can, write a contingency plan for each risk that you identified in the above steps, but start with what’s most critical to your business. As time permits you can create a plan for everything on your list. Whatever the plan, the thought behind each should be the steps necessary to resume normal business operations, thinking about communications, people’s responsibilities, timelines, etc.
4. Share the Plan
When you’ve written the contingency plan and it’s been approved, the next step is to make sure everyone in the organization has a copy. A contingency plan, no matter how thorough, is not effective if it hasn’t been properly communicated.
5. Revisit the Plan
A contingency plan isn’t chiseled in stone. It must be revisited, revised and maintained to reflect changes to the organization. As new employees, technologies and resources enter the picture, the contingency plan must be updated to handle them.
Using ProjectManager for Contingency Planning
ProjectManager has the project planning and risk management tools you need to make a reliable contingency plan that can quickly be executed in a dire situation.
Use Task Lists to Outline the Elements
Use our task list feature to outline all the elements of a contingency plan. Since a contingency plan likely wouldn’t have any hard deadlines at first, this is a good way to list down all the necessary tasks and resources. You can add comments and files to each task, so everyone will know what to do when the time comes.
Dashboard to Monitor the Contingency Plan
Our dashboard gives you a bird’s eye view of all of the critical project metrics. It displays live data, so you’re getting a real-time look at how your project is progressing. This live information can help you spot issues and resolve them to make sure that your contingency plan is a success. Which, given that it’s your plan B, is tantamount.
If you’re planning a project, include a contingency plan, and if you’re working on a contingency plan then have the right tools to get it done right. ProjectManager is a cloud-based project management software that helps you create a shareable contingency plan, and then, if you need to, execute it, track its progress and make certain to resolve whatever problems it’s addressing. You can do this all in real-time! What are you waiting for? Check out ProjectManager with this free 30-day trial today!