Today we are going to discuss the contingency plan and the fallback plan. This topic is very important both for a PMP and PMI-RMP exam point of view because you may see a number of questions testing your knowledge on this topic (especially the PMI-RMP candidates). So understand this topic very well.
Contingency and fallback plans are developed to manage identified risks. Since both plans are used to manage risks, you may wonder which plan you will use if any risk occurs. A risk can be one of two types: identified risk or unidentified risk. Identified risks can be further divided into many categories, such as: primary risk, secondary risk etc. Now if any of these risks occur, which plan will you use to contain the risk? This complicates the situation.
You have two kinds of reserves to manage: the contingency reserve and management reserve. Now the question comes to mind which reserve will you use to implement the contingency plan and fallback plan? This again complicates the situation.
So to find the answers to these questions, I did some research and went through many resources, and finally came to an understanding.
Merriam-Webster defines the term “contingency” as “an event that may but is not certain to occur”. This means a contingency is an event that may or may not occur. Therefore, you can say that the contingency plan is a plan that deals with events that may or may not occur. In project management, a contingency plan is a part of the project management plan and it describes every action that you will take if the risk is about to happen or has happened.
Let’s see a real world example of a contingency plan:
You are working on a construction project and there is a risk that rain may fall during your project execution, which will damage your consumables lying out in the open. Therefore, you make a plan that says if there is an indication of rain fall, all consumables will be covered with a plastic sheet. You further add that after the rain stops, you will bring a blower/vacuum pump to clean and dry the wet consumables. This is the contingency plan for this risk event.
Fallback plan is implemented when the contingency plan fails or is not fully effective. In other words, you can say that the fallback plan is generally made for residual risks. It is a backup plan for the contingency plan. The fallback plan is also a part of the project management plan and defines the cases where actions have to be taken. Let’s see a real world example:
Let’s reconsider the above given example once again but… suppose the rain continued to fall for a very long time, longer than you anticipated, which causes the consumables to be not usable any more. In this case, you will implement your fallback plan which you already had planned. Your fallback plan says that if the rain continues to fall for a very long time, causing consumables to be damaged, you will reorder consumables from a pre-identified supplier, and start the work.
The difference between Contingency Plan and Fallback Plan is that the fallback plan compliments the contingency plan and it comes into play when the contingency plan fails. On the other hand the similarities between Contingency Plan and Fallback Plan are many such as:
- Both are used to manage identified risks.
- To manage the contingency plan and fallback plan, a contingency reserve is used.
Contingency and fallback plans are the backbones of your risk management plan which help you manage the identified risks. If any identified risk occurs you will implement the contingency plan; however, if the contingency plan seems to be ineffective or has failed, you will implement the fallback plan. Please note that to implement these plans, you will utilize the contingency reserve and not the management reserve, because the contingency reserve is used to manage identified risks. The management reserve is used to manage unidentified risks.
I believe that now you understand these terms; however, if you still have some doubts, write in the comment box. I am ready to discuss.
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