What is a Contingency Plan in Project Management?
Plan B, back-up plan, safety net, or disaster recovery plan. All of these terms refer to the same thing: a plan that needs to be executed in case the plan you had originally devised fails.
Contingency planning is all about expecting the unexpected and preparing to deal with worst-case scenarios ahead of time before they hurt your project or your company. The use of contingency plans applies to any business and they are created to help organizations respond to different situations.
While they are most commonly used to prepare for negative scenarios, in project management contingency plans aren’t always linked to negative events. Unlike a mitigation plan or a crisis management strategy, a contingency plan focuses on being prepared to respond to disruptive events (such as what would happen if a company were to achieve higher sales than it had anticipated). Contingency plans can be created to take advantage of strategic opportunities, and as such, they are a powerful proactive strategy that can help you deal with any kind of disruptive event, positive or negative.
Benefits of a Contingency Plan
When managing projects, you’re going to want to avoid any unnecessary risks because a single event has the power to completely derail your plans. The purpose of contingency planning is to ensure that your business or your project can still run smoothly, despite changes, errors, and unexpected events.
- Contingency planning can help you react quickly to negative events. By preparing upfront, you and your team can focus on what you need to do rather than wasting time trying to come up with a solution while facing a crisis.
- You can significantly minimize risk and damage from a negative scenario by having a contingency plan in place.
How To Create a Contingency Plan
Here are the main steps you need to follow in an effective contingency planning process.
Step 1: Work out the risks & opportunities. At this point, you’re going to want to make a list of the things that may cause problems or that may jeopardize the direction of your plans. With the help of your team (and even other team leaders or stakeholders), identify the most relevant events that could hurt the course of your project or your business plan. You may do the same with opportunities, to draft a “positive scenario” contingency plan.
Step 2: Prioritize the risks based on their impact. Now that you have created a list of possible risks and problems, you need to prioritize them based on the threat they pose. You may have different scenarios, but not all of them pose the same level of harm. It’s helpful to categorize and evaluate the risks based on the impact or even the probability of them occurring.
Step 3: Create contingency plans. At this point, you need to create and set up different steps that outline the actions you and your team would need to complete based on the risks identified in the previous step. It’s important to be specific and to highlight steps that would need to be taken to restore your plan or your business after the event has taken place.
Step 4: Share your plans. Now that you have gone over your plans, it’s important to share them with everyone involved. Communicate it to team members and stakeholders, and make sure everyone understands it. This way, in case your company needs to implement it, everyone can act as quickly as possible.
Step 5. Revisit the plan. Contingency plans can change. Be sure to revisit your plan periodically to ensure you didn’t miss any threats, risks, or scenarios.
Take Your Contingency Plan to the Next Level With Instagantt
New projects are always exciting, so it makes sense your team would be eager to jump right in before taking the time to analyze what would happen if something unexpected were to happen down the road. But taking the time to think about the possible risks and create contingency plans will ensure that your project will run smoothly, without any issues.
Contingency plans require a certain level of order. You need to map and categorize information, but given the fact that they also require analysis and constant review, it’s important that they can be easily customized and shared. This is where project management software, such as Instagantt, can prove to be extremely helpful.
With Gantt charts, you’ll be able to create and share contingency plans in minutes. Moreover, you will be able to keep track of risks, scenarios, and opportunities, and you can revisit and edit your information as much as you need it.
