Skip to main content

Risk Contingency Plan Vs Mitigation Plan

 Risk Contingency Plan Vs Mitigation Plan


Contingency plan: (Reactive)

The Project Management Institute defines contingency planning as, “involving defining action steps to be taken if an identified risk event should occur."

A contingency plan in project management is a defined, actionable plan that is to be enacted if an identified risk becomes a reality. 

It is essentially a “Plan B”, to be put in place when things go differently than expected for a "Plan A".

The essential components of an effective risk contingency strategy are:

  • Make a list of risks
  • Weigh risks based on severity and likelihood
  • Identify important risks
  • Conduct a business impact analysis
  • Create contingency plans for the biggest risks
  • Get approval for contingency plans
  • Share your contingency plans
  • Monitor contingency plan
Example for contingency plan:
A brokerage company may have a backup power generator to ensure that trades can be executed in the event of a power failure, preventing possible financial loss.

Synchronise data with a second data centre and switch operations to the second data centre in the event of the first one going down.

Mitigation Plan: (Proactive)

Risk mitigation describes a process by which a project reduces its exposure to risk and works towards minimizing the likelihood of any issues arising during the project.

It involves a process that we’ll explore in a moment but essentially addresses the top risks to fully protect the project.

The essential components of an effective risk mitigation strategy are:

  • Identifying likely risks
  • Prioritizing risk 
  • Preparation and responses
  • Monitoring
  • Updating the risk mitigation plan

The key difference between a contingency plan and a mitigation plan is that a contingency plan is reactive, while a mitigation plan is proactive.

Example for Mitigation Plan:

Airlines create risk mitigation plans to operate flights that are profitable and safe for all parties. They train pilots and check systems to limit internal risks and create guidelines that specify acceptable flying conditions.

Comments

Post a Comment

Popular posts from this blog

New way of product development

Today is the era of fast-paced world and competitive world. Companies are realizing that the old sequential approach to developing new products won’t get the job done and product can’t be reached to market when compared to competitors. The 4 stages of product development are as follows – R&D, Growth, Maturation, and Decline. Instead of sequential approach, companies are using holistic approach – as in rugby game, the ball gets passed within the team as it moves as a unit up the field. This holistic approach has six characteristics: 1)     Build-in-instability 2)   Self-organizing project teams 3)   Overlapping development phases 4)   Multi-learning 5)   Subtle (very clear and strong) control 6)   Organizational change to explore and learning The above six characteristics forming a fast and flexible process for new product development with advantage of act as a change agent, creative, market driven ideas, flexi...
Post a Comment
Read more

Product Manager vs Product Owner

Both the product manager and the product owner work towards a common goal, to build and improve products that create meaningful value for customers and all stakeholders within the company. This usually happens by delivering and optimizing product features. Product Manager Product Owner The product manager discovers what users need, prioritizes what to build next, and rallies the team around a product roadmap. The product owner is responsible for maximizing the value of the product by creating and managing the product backlog. This person creates user stories for the development team and communicates the voice of the customer in the Scrum process.      Product Manager and Product Owner's work on below vacuum. Product manager focus on: Business Strategy Long term Product Vision Long term Product Strategy Product Roadmap Alignment with Product Owner Product owner focus on: Release Plan (Product Backlog ie: ...
Post a Comment
Read more

Data & Analytics

Data and analytics is the management of data for all uses and the analysis of data to drive business processes and improve business outcomes through more effective decision making and enhanced customer experiences. Four Types of data analytics: 1.         Predictive data analysis Predictive analytics may be the most commonly used category of data analytics. Businesses use predictive analytics to identify trends, connections between data, and relationship between data. 2.        Prescriptive data analytics Prescriptive analytics is where AI and big data combine to help predict outcomes and identify what actions to take. Prescriptive analytics can help answer questions such as “What if we try this?” and “What is the best action?” You can test the correct variables and even suggest new variables that offer a higher chance of generating a positive outcome. 3.        Diagnostic data analyti...
Post a Comment
Read more