Saturday, October 27, 2018

Risk Management - Contingency Plan vs Fallback Plan

Contingency and fallback plans are developed to manage identified risks. Since both plans are used to manage risks, you may wonder which plan you will use if any risk occurs.
A risk can be one of two types: identified risk, unidentified risk.
Identified risks can be further divided into many categories, such as: primary risk, secondary risk, residual risk, etc. Now you may think that if any of these risks occur, which plan will you use to contain the risk?
This complicates the situation.
You have two kinds of reserves to manage the reserve: contingency reserve and management reserve. Now the question comes to mind: which reserve will you use to implement the contingency plan and fallback plan?
This again complicates the situation.
Contingency Plan
Contingency is an event that may or may not occur. Therefore, you can say that the contingency plan is a plan that deals with events that may or may not occur.
In project management, a contingency plan is a part of the project management plan. It describes every action that you will take if the risk is about to happen or has happened.
Please note: this plan is developed to manage identified risks.
Let’s look at a real-world example of a contingency plan.

A real-world example

You are working on a construction project and there is a risk that rain may fall during your project execution, which will damage your consumables lying out in the open.
Therefore, you make a plan that says if there is an indication of rainfall, all consumables will be covered with a plastic sheet. You further add that after the rain stops, you will bring a blower/vacuum pump to clean and dry the wet consumables.
This is the contingency plan for this risk event.
If you examine these definitions, you will find that these are not different, just phrased differently:
  • Contingency plans are the plans describing the specific actions that will be taken if an opportunity or a threat occurs.
  • Contingency response strategy will be executed if there is a sufficient warning sign (risk trigger).

Fallback Plan

A fallback plan is implemented when the contingency plan fails or is not fully effective. In other words, you can say that the fallback plan is generally made for residual risks. It is a backup plan for the contingency plan.
The fallback plan is also a part of the project management plan and defines the cases where actions have to be taken.
Let’s look at a real-world example.

A real-world example

Let’s reconsider the above given example once again.
Suppose the rain continued to fall for a very long time, longer than you anticipated, which causes the consumables to be not usable any more.
In this case, you will implement your fallback plan. Your fallback plan says that if the rain continues to fall for a very long time, causing consumables to be damaged, you will reorder consumables from a pre-identified supplier, and start the work.
Before I go any further, let me share with you another example from my own experience.
For my blog, I always keep an updated copy of all posts and comments on my computer, so in case my blog gets hacked, I can restore my blog from this backup.
Now, suppose what would happen if my site got hacked, and at the same time my computer also crashed; how would I restore my blog?
This is where my fallback plan comes into play. To save myself from such disaster, I always send updated copies of my blog posts and comments to two separate email accounts from different email providers.
Now, if my blog is hacked and even my computer crashes, I can restore my blog from my backup saved in my email accounts.

The difference between Contingency Plan and Fallback Plan

There is no difference between the contingency plan and fallback plan. In fact, the fallback plan compliments the contingency plan and it only comes into use when the contingency plan fails.

Similarities between Contingency Plan and Fallback Plan

There are many similarities between these two plans, such as:
  • Both are used to manage identified risks.
  • To manage the contingency plan and fallback plan, a contingency reserve is used.


Contingency and fallback plans are the backbones of your risk management plan which help you manage the identified risks. If any identified risk occurs you will implement the contingency plan. However, if the contingency plan seems to be ineffective or has failed, you will implement the fallback plan.

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