What is a Contingency Plan (and How Can You Make One?)

Modern approaches to project development, like the Agile methodology, give teams the ability to adjust to problems and possibilities quicker and more efficiently than ever before. But no matter how well thought out your primary plan for a project is, some things are just out of your control. Natural disasters, budget issues, and worker turnover can all cause a solid project outline to go off track.

A contingency plan helps project management teams prepare for the unknown. It’s a vital part of risk management. This guide will show you the importance of having a contingency plan in place for your next project. We’ll also give you step-by-step instructions for putting one together and implementing it.

What is a contingency plan?

A project contingency plan is an established, pragmatic set of actions that your team will follow if a predetermined risk materializes and makes your initial plan impossible.

For example, your software development team is updating a website for a retail company. In the middle of the project, your lead full-stack developer accepts a position with another company. How will the team continue the project? Who will take on extra responsibilities? What is the time frame to find a replacement?

Contingency planning answers these types of questions. It’s a proactive strategy that helps your team respond to unexpected events. Not all contingency plans are for negative events or disaster recovery, though. You might make a contingency plan for the best use of extra funding if your company secures a large investor.

Must-haves for a contingency plan

Contingency plans are all about protecting your project resources and helping your business operations move forward during a disruptive scenario. That’s why before you start mapping out continuity plans, you need to identify your most valuable resources. These include workers, software, or equipment needed to complete a project.

A useful project contingency plan outlines what steps to take to keep project continuity and when you’ll complete them in a given situation. Here are a few elements that a great contingency plan should have:

• An event that sets the plan in motion. The event could be, “A key team member has missed three consecutive days.

• ‍Immediate course of action to mitigate effects. An example would be halting production and scheduling a meeting with stakeholders if a client’s needs change in the middle of a website design project. ‍

• Key tasks for your team and a timeline for their completion. What specific tasks will each team member need to do? For example, you might have a front-end developer and back-end developer collaborate to take on the workload of a full-stack developer who leaves your team.‍

• Who to contact when the contingency occurs. This might be certain team members, your entire staff, or even the public. You might have a rule that all stakeholders must be notified if a web application build goes over budget.

How to create a contingency plan in 6 steps

The next few sections will cover steps to create a contingency plan for your next project. For a normal business, a contingency plan is about the mitigation of risk. While you may not need a contingency plan, it’s always wise to have one. You don’t want to get caught off guard if something makes it difficult to complete your initial project plans.

1. Assess possible risks

Identify the most likely potential threats that could be facing your project. Take some time with your team to discuss risk assessment by brainstorming issues that might be disruptive to your project.

After you’ve got all the ideas written down, establish which of these issues are the likeliest to occur and would have the greatest impact on your ability to complete your project. These are the situations that you want to create contingency plans for.

Let’s say your team is tasked with creating blog content for a customer relationship management (CRM) company’s digital marketing campaign. The client has given you a list of 10 articles that must be written with search engine optimization (SEO) considerations and released (on their website) by a specific date.

Two days before the delivery date, the client sends an email asking for two additional articles (due on the original due date). This is an increase in the scope of the project. A contingency plan for an increase in scope would outline strategies for managing your client’s expectations and finding the assets necessary to get the job done.

The types of issues that you might need a plan for include:

• Budget overruns or underruns. You need to know how to manage funds if your project runs over or under budget.
• Delays of various kinds. Things like miscommunication can cause delays in your production schedule.
• Changing project requirements. A client’s needs might change during your project run. Agile teams meet with stakeholders several times throughout a project’s life span to reduce this risk.
• Competitor actions. You might have to redesign a software product that violates another company’s patent or alter deadlines to compete with rivals.
• Market shifts. Consumers’ needs change over time. Your data could indicate that your digital product needs features you didn’t originally plan for.
• Economic shifts. Changes in the economy can change things like the affordability of a digital product. In down economic times, it can be hard to get businesses to invest in expensive software.
• Political shifts. If you’re working on a government project (like a federal aid website), newly elected leadership might change its scope or its objectives.
• Regulatory shifts. New laws or government oversight may make parts of your project more expensive or even illegal.
• Reputational shift. Mistakes or complaints can cause the public opinion of your organization to sour.

2. Identify resources to address risks

What materials will you need to respond to an issue if it arises and how will you attain those resources? Let’s revisit our digital marketing example to illustrate what this might look like. Here are a few things you would need to finish the extra two articles that your client requested:

• A content writer. You’d need someone to write your articles. You can ask members of your team to write the content if they have the necessary availability and skills. If not, a remote talent platform like Upwork can help you find a qualified independent content writer. If you don’t have time to find a professional on your own, though, Upwork’s Project Catalog can help with predefined projects. ‍

• A content outline. Your writer likely won’t have direct communication with your client. An outline will convey your client’s content guidelines and criteria to the writer.‍

• An extended deadline. If you’re unable to get the additional work done in time, you might have to meet with your stakeholders to see if your deadline can be extended.

3. Ensure you have the resources to respond to specific scenarios

You might find that you can minimize or even entirely avoid some problems by adding to your team’s skill set. Take an inventory of the people on your team. Compare their abilities to the ones you’ll need to handle a problem and return to normal operations. If you find any skills gaps, you might be able to fill them by hiring an independent team member on a project basis.

For example, let’s say you’re managing a team that is putting on a conference. Thousands of people will register for the conference. A big concern is that your server will crash, causing delays and unhappy customers.

However, you could hire a software developer (on a contract basis) to create a registration database and connect it to your website using server-side programming (e.g., Python, C++, PHP). This would let people register online and eliminate the risk of your server failing due to traffic.

4. Develop plans and procedures to utilize resources in specific events

What is the most effective use of all of your resources when you’re dealing with a contingency? Take into account the members of your team and any physical resources at your disposal.

For example, if one worker is unable to work, which of their colleagues will pick up the slack and what specific tasks will they need to do? For example, if the marketing expert for your website development project gets the flu, other capable team members might have to do marketing tasks like A/B testing or updating social media platforms, like Facebook.

5. Share plans with stakeholders and essential team members

Have your team read and sign off on your contingency plan. Sharing your plan with the people in your organization not only helps them prepare but it also gives you the chance to benefit from their suggestions.

Different members of your team or company might have expertise in areas that you don’t. For instance, a security analyst might offer better tools for protecting your information systems in the event of a cybersecurity breach like a malware attack.

6. Incorporate feedback and update regularly

Look for any opportunity to update your contingency plan. You might have meetings to review some of your most important plans with your team members on a regular basis to see if any improvement can be made.

You might simply learn new processes for dealing with a scenario over time. It’s also likely that you’ll be able to reevaluate a contingency plan after using it. Actually following a plan will give you a better perspective to see what works and what doesn’t.‍

Conclusion

Depending on the scope of a project, the planning process can require a huge amount of forethought and precision. However, having a plan B just in case plan A falls through can be the difference between keeping a project on track and letting it fall apart when unforeseen events happen.

When the unpredictable occurs, look to the skilled independent professionals on Upwork to help you deal with crisis management. Ensuring your team has access to the right resources and critical skills is a key aspect of project success.