Before understanding difference between mitigation plan and contingency plan let’s begin with PMBOK® definitions of Mitigation and Contingency plan
PMBOK® Guide Fifth Edition defines risk mitigation “Risk mitigation is a risk response strategy whereby the project team acts to reduce the probability of occurrence or impact of a risk.
It is important to understand that the aim of Risk Mitigation is to bring down the risk exposure within the acceptable threshold limits. The risk exposure is the function of the probability of occurrence of the risk and the impact of this risk on the project. Now, you need to understand, since, mitigation strategy is all about taking advance and proactive actions, the probability of occurrence of risk and its impact is identified and calculated at an early stage so as to prevent the foreseen damage to the project. In short, risk Mitigation follows ‘Prevention is better than cure” dictum.
Risk responses identified using contingent response strategy is called contingency plans.
PMBOK® Guide Fifth Edition defines Contingent Response as “Some responses are designed for use only if certain events occur.
Contingency responses are the ones that get executed only when certain unwanted events occur. You do not execute contingency responses unless you see a warning sign that some risk is about to occur. Now, take note we only execute contingency responses when sufficient warning signs are given. It is mandatory to track and define the triggers of the contingency response.
It’s often observed that test takers consider these two risk plans as mutually exclusive, which however is not the case. At times, you may have to plan both the mitigation risk response and the contingency response alongside. In such urgent situations, you have to make a proactive plan of actions to reduce the probability and impact of the risk and also stay prepared with the contingency plan and monitor triggers or warning signs in case the risk is inevitable.
You do not necessarily make both of these plans for all the identified risks. Instead the contingency plans are made for the risks which are under your threshold and flashes enough warning signs in advance.
Here is an Examples to illustrate the case for both the risk responses:
You are going to address a gathering of professionals, if the car tires get busted than it will result in delay of twenty minutes and you may miss your speaking slot.
The Mitigation Plan could be:
You take one car along, someone follows you, and in case there is any problem in the car you are traveling you change the car.
The Contingency Plan could be:
You keep some buffer time and if something happens to car tires, you change them and since you have timed buffer you still reach on time.
Difference between Mitigation plan and Contingency Plan
|Risk Mitigation Plan||Risk Contingency Plan|
|You identify actions which you will take in advance irrespective of the occurrence of risk||You plan actions, but you monitor certain warning signs. You take these actions only when you see the warning signs.|
|You spend time and money in advance for the given risk condition||You do not spend time or money in advance, but you keep them ready, and invest them when needed|
|We are expected to mitigate the risks which are outside the risk threshold. By applying a mitigation plan, we reduce the probability of impact of the identified risk.||By identifying the contingency plan, we do not change the probability or impact of the current risk, but we plan to control the impact as risk event looks like occurring.|
|This works as the first level of defense for the high exposure risks||This works as a fallback plan for the high exposure risks.|
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