Zedan IT Blog

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Contingency Vs Mitigation Planning


This paper identifies the Mitigation Planning and the Contingency planning and describes the differences between them.

Every project face some risks may lead to taking a decision for not continuing the project or impact business continuity, therefore Risk Management is an important area for Projects and Organizations.

Risk management is the identification, assessment, and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives, whether positive or negative).  Risks can come from uncertainty in financial markets, project failures, legal liabilities, accidents, natural causes and disasters as well as deliberate attacks.  Several risk management standards have been developed by the Project Management Institute including methods, definitions and goals.

The strategies to manage risk include transferring the risk to another party, avoiding the risk, reducing the negative effect of the risk, and accepting some or all of the consequences of a particular risk.

In ideal risk management, a prioritization process is followed whereby the risks with the greatest loss and the greatest probability of occurring are handled first, and risks with lower probability of occurrence and lower loss are handled in descending order.

Mitigation planning and Contingency Planning are parts of the Risk Management.


Mitigation planning:

The International Organization for Standardization (ISO) identifies specific principles of risk management and the process of risk management consists of several steps.  One of these steps is the Mitigation or Solution of risks using available technological, human and organizational resources.   Mitigation efforts attempt to prevent hazards from developing into disasters altogether, or to reduce the effects of disasters when they occur.

Mitigation is mainly about knowing and avoiding unnecessary risks. This includes an assessment of possible risks to personal/family health and to personal property.

However, specialists can be hired to conduct risk identification and assessment surveys.  Purchase of insurance covering the most prominent identified risks is a common measure.

Risk mitigation measures are usually formulated according to one or more of the following major risk options, which are:

1. Design a new business process with adequate built-in risk control and containment measures from the start.

2. Periodically re-assess risks that are accepted in ongoing processes as a normal feature of business operations and modify mitigation measures.

3. Transfer risks to an external agency (e.g. an insurance company)

4. Avoid risks altogether (e.g. by closing down a particular high-risk business area)

Contingency planning:

It is substituting one risk for another, so that if the undesirable event occurs you have a “Plan B” which can compensate for the ill consequences.

Also known as a worst-case scenario plan, backup plan, or a disaster recovery plan, the contingency plan is simply a secondary or alternative course of action that can be implemented in the event that the primary approach fails to function as it should. Plans of this type allow businesses and other entities to quickly adapt to changing circumstances and remain in operation, sometimes with very little inconvenience or loss of revenue. It is not unusual for organizations of different types to have both a master contingency plan that is relevant to the entire organization, as well as plans that are geared toward rapid response in specific areas of the operation.

A contingency plan is often developed by identifying possible breakdowns in the usual flow of operations, and developing strategies that make it possible to overcome those breakdowns and continue the function of the organization.

First, the plan allows the day to day operations of the business to continue without a great deal of interruption or interference.  
Next, the backup plan is capable of remaining functional for as long as it takes to restore proper function of the primary plan. 
Last, the emergency plan minimizes inconvenience to customers, allowing the business to continue providing goods and services in an orderly and time-efficient manner.

Business and government contingency plans need to include planning for marketing to gain stakeholder support and understanding. Stakeholders need to be kept informed of the reasons for any changes, the vision of the end result and the proposed plan for getting there.

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