Effective contingency planning in project management

Contingency planning is all about having a backup strategy for your business in case of any unforeseen events that may knock off your plans off track.

Every project undertaken in a business has a unique set of risks, therefore when project managers carry out a risk assessment and identify potential threats, a proactive backup plan needs to come into place.

What is contingency planning?

A contingency plan in project management is a defined, actionable plan that comes into force if an identified risk becomes a reality. No one wants their ‘Plan A’ to fail but it is essential to keep a ‘Plan B’ in place when things go differently than the original flow. However, businesses must have an effective contingency plan in place that can address any negative development and ensure business continuity.

Contingency planning is an essential part of effective supply chain management and the overall risk management of your business. By understanding the business needs, implementing a few best practices, and investing in the right tools, businesses can guard against both short and long-term disruptions, improve disaster recovery capabilities and risk mitigation, and safeguard business continuity when it matters the most.

Must-haves for a contingency plan

Effective contingency planning in project management is all about protecting your project resources and helping your business operations move forward during any unforeseen event.

Therefore, when preparing a contingency plan following elements should be taken into consideration

  • Pinpoint what specific event or events can trigger the implementation of Plan B.
  • In each step of your plan cover- who will be involved, what do they have to do, when it needs to happen, where will it take place, and how will it be executed.
  • Ensure that there are clear guidelines for communication and reporting during the implementation of the plan- who will draft and send the notice, and how soon after the incident will it be released? How often updates will be given? How will external and internak stakeholders be notified?
  • Regular monitoring of the plan should be done to ensure it is up-to-date.            

How to prepare an effective contingency plan?

If businesses don’t want to get caught off guard if any unforeseen event disrupts the initial project plans then it is essential to prepare an effective contingency plan.

Risk assessment

Identify the most likely potential threats that a project could face. The project manager should do risk assessment by brainstorming issues with his team that might disrupt the project. Once all the issues are identified, establish which of the identified issues are the likeliest to happen and would have the biggest impact on the team’s ability to complete the project. These are the situations that call for contingency planning.

Risk quantification

Once the risks have been identified, the next step is to quantify them to determine which risks would be the most detrimental to the project if they happen. The project manager with his team need to determine the probability of a risk occurring and its severity if it were to occur. The severity impact can be quantified as low, medium, and high.

Identify and ensure that resources are available to respond to specific scenarios

For a contingency plan to be effective, a project manager should ensure that resources are available to respond to the identified and quantified risks if they happen. Taking inventory of the people in the team, comparing their abilities to the one’s that may be required to handle a problem and returning to normal operations is a must.

Project managers should also develop plans and procedures to utilize those resources in specific events. For instance, if one worker is unable to work, which other team member will pick up the slack and what specific task he/she will have to do?

Share the plan with all stakeholders

A contingency plan should be shared with all stakeholders so that they are not only prepared for any contingency but the project team can also benefit from their suggestions. Different members of the team or organization may have expertise in areas that could help make ‘Plan B’ effective if it is to be put in place.

Take feedback and update regularly

Look for any opportunity to update the contingency plan. Having regular updates with team members is essential to see if any improvements can be made.


Depending upon the scope of the project, the planning process can require a huge amount of precision and forethought. Having a contingency plan just in case the original plan fails can be the difference between keeping the project on track and letting it fall apart when an unforeseen event happens.

The bottom line is that risks cannot be eliminated in project management, and having effective contingency planning is the last line of defense against the risk.