Contingency Plan VS Workaround

Contingency Plan VS Workaround

Contingency Plan VS Workaround Su-Cheng Wu 1. Explain the difference between a contingency plan and a workaround. The PMBOK Guide discusses both Workaround and Contingency Plans in section 11.6.3. Specifically: • Recommended corrective actions include contingency plans and workarounds. The latter are responses that were not initially planned, but are required to deal with the emerging risks that were previously unidentified or accepted passively. (PMBOK, 2008. P.312) In short, contingency plans are made based on potential risks that were identified and planned for. Workarounds are responses to problems, issues, developed while the project is being worked that were never identified or planned for. 2. What is the difference between mitigating a risk and contingency planning? The main difference between mitigating a risk versus contingency planning is they are 2 different Risk Response Strategies. While both are “Strategies for Negative Risks or Threats”, PMI PMBOK states that: (PMBOK, 2008. P.303) • Mitigate: Risk mitigation implies a reduction in the probability and/or impact ofan adverse risk event… • Accept: The most common active acceptance strategy is to establish a contingency reserve, including amounts of time, money or resources to handle the risks. 3. What is residual risk and how would this be budgeted in time and cost? No Risk Management plan can fully eliminate the risk; therefore, all projects or organization will need to accept certain level of residual risk and plan accordingly. At the project level, PMBOK 11.5.3 Plan Risk Responses: Outputs states that: (PMBOK, 2008. P306) 11.5.3.1 Risk Register Updates: • Components of the risk register at this point can include: Residual risks that are expected to remain after planned responses have been taken, as well as those that have been deliberately accepted; At an organization level, residual risk can be budgeted in time and cost via Business Continuity Planning (BCP). BCP can have the following phases: Analysis, Solution Design, Implementation, Testing and Organization Acceptance and Maintenance. BCP establish plans to deal with the consequences of realized residual risks. Low probability and high impact risks are especially suitable for BCP to plan for as part of an organizational level active residual risk acceptance strategy. (Naef, 2003) References PMI. (2008). Project Management Body of Knowledge (PMBOK Guide). Project Management Institute: 4th Edition Wanja Eric Naef (2003) Business Continuity Planning – A safety net for business Infocon Magazine Issue One http://www.iwar.org.uk/infocon/business-continuity-planning.htm .

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