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The events which might have a bearing on the organization’s financial health,
reputation or on its ability to continue with business operations. Such events may
include natural disasters, fire, network failure, and a data breach, to name a few.
Having a contingency plan template helps you make sure that there’s always a
continuity in the business. Most of the bigger business organizations have sets of
business contingency plan templates for various potential threats. These undergo
extensive research and the resulting appropriate responses get subjected to full
practice even before the crisis occurs.
It’s also worth noting that contingency plans don’t only exist in anticipation should
things go wrong but you can also create one to make the most of strategic
opportunities.
For instance, you have come to know of a new type of software for training that’s
about to get released soon. Should this occur during the project, you can create a
contingency plan on how to include this into the training stage of your project.
Also, keep in mind that the contingency planning process is a proactive strategy,
unlike crisis management which is a reaction to something that has happened. A
contingency plan accounts for any disruptive events to ensure that the company is
always prepared if and when such events should occur.
Contingency plans are usually part of the risk management department and project
managers should know that the plan is simply an outline. However, there are times
when the project may extend beyond this. This means that the manager can be more
prepared to make changes in the plan if he deems it would be more effective.
Risk management isn’t the same as the contingency planning process. Risk
management is more about establishing, assessing, mitigating, avoiding, sharing,
transferring, and accepting risks, whereas a contingency plan focuses on developing
steps for when a risk occurs. But they share a common aspect. They both describe
the steps to take in such an occurrence.
In its simplest form, a contingency plan definition is what you should do when an
unexpected event takes place. Simpler still is “What if….?”, then creating an outline of
the steps that answer this question.
Technical issues may be a risk factor too, where the system stops
functioning as needed for the delivery of the project as scheduled and
within the budget.
Human resources can be another risk too as teams may leave projects,
get sick or get terminated.
In a much larger scale, risk factors beyond the project manager’s
control are social and political changes. As an example, you can work
with a contract which can drastically change depending on who’s in
control. Nothing remains stable with risk factors. Communities can even
protest against projects and bring them to a halt.
There are also liability issues where there are potential threats in the
form of compensation plans and legal actions.
Make it a point to know which resources can you use in the event of an
emergency and in which part of the contingency plan you can apply
these resources.
Identify important dates that, if you miss, might negatively affect the
plan. For instance, getting approval from committees which rarely
meet.
Know your plan. Check its weaknesses and strengths. Identify slack
which you may find.
Check for any points in the plan where you can apply alternative routes
and evaluate each scenario to make your plan more flexible.