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Every project involve uncertainty and risk. It is likely that you will need to develop contingency plans for key areas of risk. The number of scenarios likely to require a full contingency plan depends on the project. Contingency planning should not be confused with the normal re-planning necessary to react to minor variances in the developing project plan. The following steps will help to manage both major and minor risks.

 Identification

As mentioned previously, brainstorming and identifying the full set of risks is essential for the smooth running of the project. Once identified, breakdown or description of the risk will allow all parties to recognize the risks.

 Likelihood

Assigning a likelihood category to a risk enables you to determine the time or manpower needed to manage the risk. For example, if it is highly likely that the new software programme will develop problems in the first months of its launch then time and budget must be set aside to rectify the faults as they arise. You can categories likelihood as Low, Medium or High.

 Impact

What will be the impact of a risk becoming a reality? The impact can be categorized as Negligible, Marginal, Critical or Catastrophic. Could it mean the whole viability of the project coming under question if classed as Critical or Catastrophic? Major risks must have a contingency plan which must be continually reviewed and discussed with the project team if their impact is to be managed. The feasibility study should have impact strategies included so that project stakeholders have full knowledge of plans and the risk of non-project completion.

 Contingency Plans

 For minor risks these can be as simple as Mitigation Strategies. Mitigation is designed to reduce the probability that a risk will materialise. Normally you will only do this for High and Medium elements. You might want to mitigate low risk items but certainly address the other ones first. For example, if one of your risk elements is that there could be a delay in delivery of critical parts, you might mitigate the risk by ordering early in the project. For major risks the contingency plan should also carry a status level Green, Amber or Red and carry ownership depending on who owns that part of the project. An example of a contingency plan is below.

  General Contingency Plans

 Catastrophic risks

§  If a catastrophic risk occurs we will make an honest reassessment of the viability of the project and involve the relevant project stakeholders.

§  If a catastrophic risk occurs we will cancel the project. We will take away our lessons learned and any valuable project bi-products.

§  We do not recognise any catastrophic risks. If one occurs we will pretend everything is fine and hope that none of the stakeholders notice.

 Risks that consume development resources.

§  The project has a fixed deadline. The requirements are prioritized. If we lose time, we will reduce project scope.

§  The features specified are all essential. If we lose time, we will delay delivery.

§  If we lose time, we will make time estimates for the remaining features, and meet with the customers to reconsider scope and delivery date.

  This article has been extracted from one of the Impression Training course books. These are developed by experienced trainers and consultants.

 Impression Training runs courses related to this topic.