Contingency Planning Maintains Operational Excellence of Your Business

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Most of the time, you relate situations like spreading of fire, occurrence of storms, or floods with contingency situations. But, what will happen if your key vendor suddenly becomes bankrupt or your staffs fall ill due to infection from food at the annual general meeting? Such uncertain incidents generate disorder and confusion if you have not taken suitable measures beforehand. Contingency planning is important for carrying out every day business operations in safe manner.

You can see that contingency planning not only takes care of tackling the risks of natural disasters, but, it also helps you in becoming alert of events like lose of suppliers, customers, data, people, etc. This is the reason; it is crucial for making contingency planning a normal part of way in which your business operates.

Assessing Risks

The requirement for preparing a contingency plan emerges from detailed analysis of risks, which your company faces. It is a useful tool that helps you to make decisions regarding ongoing and new projects.

Have you ever thought if your primary business plan does not go well, then what will happen? In normal scenario, primary plan deals with day- to- day business operation. In some cases, the primary plan can become your response for dealing with an unidentified risk. When this kind of plan fails to work, you press contingency plan into action.

Use the Following Principles during Assessment of Risks

# Address Critical Business Operations

An effective contingency plan identifies every critical business function and devises ways for minimizing losses.

# Identify Risks

For each business function, you have to carry out risk analysis for identifying different risks, which your business may face. Find out the intensity with which a risk can harm or disrupt your business. The end result or risk analysis comprises of various threats. While preparing a contingency plan, you may become confused. So, you need to prioritize risk assessments.

# Prioritize Risks

One of the biggest challenges of contingency planning is for making sure that you do not plan more than the required. You require careful balancing between adequate preparation and over preparing for something, which may never occur. In this way, you can respond effectively and quickly to a critical situation when it surfaces.

How to Study Risk Impact?

Risk probability charts can help you to study risk impact. These charts assist you in analyzing the effect of each risk and its possibilities of occurrence. You can then figure out the risks that need effort and expense of risk mitigation.

Contingency planning is not the only action, which emerges as an outcome of risk analysis. You can manage risks by using current assets more effectively or by investing in new services, which help you to manage them.

# Developing the Contingency Plan

Go through the following tips when you prepare a contingency plan for your company.

# Maintaining Business Operations

Your prime objective is maintaining the business operations. You should look closely at what you have to do for ensuring right level functionality and service delivery.

# Identifying Triggers

You have to note the things or situations that will require you for implementing the contingency plan. Decide upon the actions that you need to take. Also, you need to determine the person who will be in charge of each stage and the type of reporting system they should follow.

# Defining Time Period

What should be done during the first hour after the plan has been implemented. If you look at the contingency plan in this manner, you can cover up major details.

# Keeping the Contingency Plan Simple

You do not know who will study and implement the plan when it is required. So, use clear and plain language.

# Considering Related Resource Restrictions

If you are required to implement other plan, will the company be able to operate in same way? Also, you have to think whether the other plan can reduce capabilities.

# Defining Success

While defining success, you have to clearly state the decisions that are required for bringing back the business operations in previous forms.

# Identifying Everybody’s Need

In order to run business operations by implementing contingency plan, in first place, you should identify the requirements of your employees. After assessing the needs, provide suitable resources to them for fulfilling business objectives.

# Managing Risks

You should look for opportunities that will help you in reducing risks, wherever possible. This will help you to reduce or even eliminate the requirement for full contingency plan in certain areas.

# Identifying Operational Inefficiencies

Provide a standard for documenting the planning process and find ways of performance improvement.

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Maintenance of Contingency Plan

After you have prepared the contingency plan, you have to perform various tasks for keeping it relevant and practical. Do not just prepare a document to keep it in folder and transfer it to shelf. You have to review your plan after certain intervals and make updates accordingly.

Follow these steps for maintaining the contingency plan.

  • Communicate the plan to every employee of your company.
  • Make people aware of their responsibilities and roles with respect to the plan.
  • Conduct sessions that will help to become your employees proactive in case a contingency situation arises.
  • You have to analyze the results of training sessions and make changes accordingly.
  • Consider reviewing of plan after certain intervals, as there may be changes in operational and technological standards.
  • Discard the old plan and distribute the revised one to all employees.


Many organizations ignore the importance of contingency planning. It is difficult to take out time for preparing a good plan as the possibility of significant business disruption is small and every day operations are demanding.

However, if you implement proactive steps in short time, you can quickly and efficiently recover losses from operational setback in long run. You can save your company from failure during situations where risks dominate. Contingency planning requires investment of resources as well as time. This will also help you to make your employees aware of tasks, which they have to perform in case of an untoward situation.

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