Level 6

Certificate
in
Project Management

Ing. Norman Zammit

 LO3.3 – Certificate in Project Management

Project Contingency Planning

Section 3.3 of Unit

 Your Learning Outcome:

Understand how to monitor and control the progress

of projects.

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 LO3.3 – Certificate in Project Management

Agenda for the Section 3.3 of Unit

This section will cover the following topics:

 What is Contingency planning
 Contingency planning vs. risk management vs. mitigation
planning
 When to use contingency planning
 How to create a contingency plan
 How to maintain a contingency plan
 How to implement a contingency plan
 What are the Challenges to contingency planning

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 LO3.3 – Certificate in Project Management

What is a Contingency Plan?

 A contingency plan is a backup plan in place for when things go differently
than expected or known as “Plan B”
 A contingency plan in project management is a defined, actionable plan
that is to be enacted if an identified risk becomes a reality
 The contingency planning process involves defining action steps to be
taken if an identified risk event should occur. Contingency planning covers
planning for positive events too
 Contingency plans in project management are a component of risk
management, and they should be part of the risk management plan
(Project Management Guide, n.d)
 Contingency planning comes with some challenges

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Contingency Planning Concepts

 Contingency: A specific situation or event that could occur in the
foreseeable future. Contingencies are planned activities that come into
play when the risk occurs

 Contingency prioritisation: The process of selecting contingencies for

planning purposes

 Contingency planning: The process of establishing programme objectives,

approaches and procedures to respond to specific situations or events
that are likely to occur, including identifying those events and developing
likely scenarios and appropriate plans to prepare and respond to them in
an effective manner

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Contingency Plan vs. Risk Management

 In project management,
contingency planning is often part
of risk management
 Contingency planning is not the
same as risk management, however
they do share the aspect of what to
do when the risk happens
 Risk management is about
identifying, assessing, mitigating,
transferring, sharing and accepting
risk
 A contingency plan is about
developing steps to take when an
actual issue occurs

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 LO3.3 – Certificate in Project Management

Contingency Plan vs. Mitigation Plan

 A mitigation plan attempts to decrease the chances of a risk occurring, or

decrease the impact of the risk if it occurs. Therefore, it is implemented in
advance

 A contingency plan explains the steps to take after the identified risk
occurs, in order to reduce its impact. Think of a contingency plan as the
last line of defense

(Hughes, 2018)

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Need for Contingency Planning

Start with “What if”:

 What will you do if things start to go wrong?

 How will you know if a risk materialises?

 How will you check and manage the risk?

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 LO3.3 – Certificate in Project Management

When to Use a Contingency Plan?

 Contingency plans can only be created for identified risks, not unidentified
or unknown risks

 Contingency plans are not only put in place to anticipate when things go
wrong. They can also be created to take advantage of strategic
opportunities

 A contingency plan is set up to account for those disruptive events, so

you’re prepared if and when they arrive

 The contingency plan is a proactive strategy

(Hughes, 2018)

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Contingency Planning Process 1/3

The main steps of the process of making contingency plans include:

 Chose a collaborative team

 In order to design and implement a contingency plan, it is important
to choose a collaborative team that includes experts from all relevant
departments or units of your organization.

 Identify and analyse potential emergencies, risks or/and opportunities

 Identify what specific event or events need to happen to trigger the
implementation of the original project plan

 Prioritize contingencies
 You should analyse the potential impact of the potential emergencies,
risks or/and opportunities starting out with the most critical/likely,
then progressing to plans for lesser threats or opportunities
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Contingency Planning Process 2/3

 Create a contingency plan for each contingency
 You should create a contingency plan for each threat/opportunity you
have identified.
 establish clear objectives and strategies for each of the
contingencies
 develop scenarios for each of the contingencies and the overall
planning process
 prepare a contingency plan for each selected scenario developing
actions to be taken to respond to specific situations or events that
are likely to occur
 plan the resources, budgets, timeframes, roles and
responsibilities, and communication of plan

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Contingency Planning Process 3/3

 Implement the contingency plan (if necessary)

 implementation of the planned actions to respond to specific event
when they occur in the most effective manner

 Maintaining and updating the contingency plan

 maintain the contingency plan updated.
 revise the plan periodically
 assess the risks of your contingency plan as new events, threat or
opportunities might happen.

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Contingency Planning

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How to Prepare a Contingency Plan 1/3

After you have identified what specific event(s) need to happen to trigger
the implementation of the original project plan, you need to:

 Plan (actions, resources and procedures) - Cover the five bases in each
step of your plan:
 who will be involved,
 what do they need to do
 when does it need to happen
 where will the plan take place,
 and how will it be executed

 Have a definitive timeframe and schedule; organize your tasks within

your contingency plan based on how long it takes to finish them

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How to Prepare a Contingency Plan 2/3

 Have clear guidelines for reporting and communication during the

implementation of the plan
 How will internal and external stakeholders be notified?
 Who will draft and send the notice, and how soon after the incident
will it be released?
 How often will updates be provided?

 Monitor the plan on a regular basis to ensure it is up-to-date

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How to Prepare a Contingency Plan 3/3

 Prepare for the common challenges that Project Managers face with
contingency planning

 Keep your resources in mind and think about the effect of contingency
plan in your organization and project

 Standardize your contingency plan ensuring that everyone is aware of the

plan and are always informed with the necessary updates

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Contingency Planning?
 Planning concurrent / quasi
Concept
concurrent activities enables
duration shortening Design

Market Test

 “time crushing” helps reduce Launch

project time, especially if baseline
project is already contracted – time
winning contingency time
Concept

 Saving time = saving costs = Design

earlier revenue streams
Market Test

Launch

time
 LO3.3 – Certificate in Project Management

Implementing the Contingency Plan

 Disseminate the plan’s information to everyone

 Involve people: Let every people involved know their task and duties of
the contingency plan
 Revise the plan: Constantly evaluates the changes occurring in the plan
and if necessary, implement some changes
 Communicate the revised plan: Deploy revised plans to the entire
organization and ensure that the old plan is eliminated
 Access: Keep your plan’s documents accessible for future reference
 Monitor: Run various analysis and evaluation regularly to keep track of
the process

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Project Contingency Planning Challenges

 Contingency planning is viewed as a low priority
 Since the plan may never be needed, there can be a tendency to put
off the creation of it

 Poor motivation
 Confrontation between plan A and plan B
 Too much motivation, hard work, time and effort is invested in plan A,
therefore lack of motivation to create a plan B

 Lack of project-wide plan awareness and buy-in

 If all stakeholders in the organization are not aware of and bought into
the plan, there may be delays in enacting it

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Project Contingency Planning Challenges

 Not spending enough time identifying all risks
 If a risk has not been properly identified, it’s impossible to prepare a
viable contingency plan

 Organizational mistakes
 The conflict between organizational elements is often found too late –
this requires first risk assessment and prioritization process then
project recovery and contingency planning

 Inadequate analysis
 The lack of sense of urgency because of inadequately analyse of
existing situation
 Inadequate analysis increases the probability of crisis occurring

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