Project Risk Management: What is the difference between Contingency Plan and Fallback Plan for PMP Exam

Project Risk Management: What is the difference between Contingency Plan and Fallback Plan for PMP Exam

January 29, 2022 0 By managementproject

Project Risk Management: What is the difference between Contingency Plan and Fallback Plan for PMP Exam

 

In project risk management, actions are required to be planned should identified risks actually occur. There are two major types of planning: Contingency Plan and Fallback Plan — both the Contingency Plan and the Fallback Plan are developed in advance during Plan Risk Responses process.

This post will expound on the similarities and differences of Contingency Plan vs Fallback Plan and what project managers would need to know for the exam.

 

The difference between Contingency Plan and Fallback Plan

 

  • Contingency Plan: A contingency plan is a course of action designed to help an organization respond effectively to a significant future event or situation that may or may not happen
    • only for risks that have been accepted (i.e. no proactive actions to be taken to minimize their occurrence)
    • for identified risks (known unknowns)
    • developed during Plan Risk Responses process
  • Fallback Plan: The fallback plan is a set of alternative actions as well as tasks that are available in the event that the main plan needs to be abandoned due to some issues, risks as well as other causes.
    • to be taken after the Contingency Plan
    • for identified risks (known unknowns)
    • developed during Plan Risk Responses process

Conclusion: Contingency Plan and Fallback Plan

In project risk management, identified accepted risks may be handled (should they occur) with Contingency Plan and Fallback Plan :

  • Contingency Plan: the pre-developed risk response strategies to be taken if the actively accepted risks occur
  • Fallback Plan: the pre-developed risk response strategies to be taken if the primary risk response is not effective

Note: the costs dealing with identified risks are included in the contingency reserve

In addition, for all unidentified risks (unknown unknowns), workaround would be carried out:

  • Workaround: the immediate risk response strategies for unidentified or passively accepted risks occur in order to contain the damages against the project plan (the costs dealing with identified risks can be obtained from the management reserve upon management approval)