this weeks assignments in 250 words
PJM410 Discussion Post Peer Responses
Please reply to both POST1: and POST2: in at least 250 words each
I have included the original post as reference.
Weâ€™ve talked about risk treatment and how the risk management plan documents the actions needed when a risk becomes an issue, but where do the contingency funds come from? Contingency planning is part of the risk management planning process. Define contingency planning and discuss when you would use it. Talk about the contingency planning strategies for each type of risk.
Ayub, Thaheem, and Ullah (2019) state that contingency management is frequently attributed as simply an estimation and collection of funds during planning and budgeting. Instead, contingency management is the exercise of managing residual risk and uncertainty (Ortiz, Pellicer, & Molenaar, 2019). Contingency is essentially â€œPlan Bâ€ and can apply in multiple ways. It should be used for any project where there is risk that in doubt.
One way that it is applicable is to add additional resources to the project either by adding more labor or money to the project to pay for short comings or address an unseen risk. If there is a commercial or external risk, having extra money in a contingency fund will help to offset these costs as they arise. If there is a technical risk, paying for additional needed technologies or related services can be addressed. If there is a management risk, the plan could be to bring on additional oversight for the project or to facilitate face to face meetings for stakeholders if the project is geographically spread out.
Additionally, the contingency plan can act as a backup. In a situation where it turns out that a technology is not ideal for use, switching to a back up technology and integrating it could be needed and addressed in the contingency plan.
Ayub, B., Thaheem, M. J., & Ullah, F. (2019). Contingency Release During Project Execution: The Contractor’s Decision-Making Dilemma. Project Management Journal, 50, 734â€“748. doi: https://doi.org/10.1177/8756972819848250
Ortiz, J. I., Pellicer, E., & Molenaar, K. R. (2019). Determining Contingencies in the Management of Construction Projects. Project Management Journal, 50, 226â€“242. Retrieved from https://www.pmi.org/learning/library/determining-c…
Contingency planning is an integral component of disaster recovery, risk management, and business continuity (Project Management Institute, 2017). It is a process that involves preparation to counter anything that happens beyond the scope of regular operations in a business and may negatively affect the ability of an organization to operate. Simply stated, this planning involves being ready to counter risks. A contingency plan is typically used in the management of exceptional risks that may have disastrous impacts. A plan can be department-specific or organization-wide. I would use this plan when working at the department of information service of a company to create an effective plan of recovery in case a disaster strike. Such a plan would safeguard and restore company data such as instructional manuals, hardware, and software components.
Contingency planning has three components, such as emergency response, management of a crisis, and business continuity. A plan involves different strategies. One technique involves creating a list of different likely scenarios and ranking them in order of importance. This technique would note the probability of various disasters happening. The second strategy involves the determination of possible internal sabotage by employees who are unhappy with organizational processes. This strategy is essential since a quarter of interruptions usually originate from internal sabotage. Securing critical servers and creating an effective backup system mitigates the possibility of loss in case of unauthorized access. By and large, strategies focus on areas that can affect business infrastructure, people, and the reputation of a business. Any strategy should follow the five steps of preparation, analysis, development, implementation, and review of any process that would address a risk. It is no doubt that putting the risk management concepts into action is an ingredient for successful projects. Therefore, a business must be innovative in finding methods that ultimately achieve greater success in all projects (Bissonette, 2016).
Bissonette, M. (2016). Project risk management: A practical implementation approach. Newtown Square, Pennsylvania: Project Management Institute.
Project Management Institute. (2017). A guide to the project management body of knowledge: (PMBOKÂ® guide) (6th ed.). Newtown Square, PA, USA: Project Management Institute.
POST2: (A question from the professor concerning my post)
Welcome to week seven and thank you for the engagement. Contingency planning does have multiple components, one being budgeting for contingency. When thinking about contingency planning, how does one manage contingency costs on a project?
More specifically, how do you know how much money to allocate to contingency funds?