In any project, there’s an element of risk. Some risks are things you can plan for in advance, while others are harder to anticipate. A good project management plan includes options for managing these risks and keeping the project on track. These options can include a contingency plan and a fallback plan. But what’s the difference between these plans, and how can you use them in risk management?
What is a fallback plan?
A fallback plan is one of the backup plans that your project team should have in place as a part of your project management strategy. It serves as a backup for your contingency plan and is implemented if the contingency plan fails or doesn’t fully mitigate the issue.
A fallback plan is implemented when a contingency plan fails, serving as a backup plan for residual risks.
Overall, contingency plans and fallback plans have many similarities:
- Both are a form of risk response
- Both are implemented using the contingency reserve
- Both are a way of responding to identified risks
However, they are different in some ways, and yet the two plans complement each other.
“Fallback plan” is a part of our Project Management Glossary — check out the full list of terms and definitions!
A fallback plan vs. a contingency plan
A “contingency” is defined as “an event that may but is not certain to occur”. Contingency plans deal with events that might happen, but that isn’t guaranteed. If an undesirable event occurs, the contingency plan is activated. Contingency plans are particularly useful for identified risks, but can also be used broadly for unidentified risks too.
Contingency plans manage identified risks. A fallback plan is an additional response strategy for if the contingency plan fails.The contingency plan is the first response to a risk event. Let’s imagine you run a contact center and you’re worried about a power cut. Your contingency plan could be to have an Uninterruptible Power Source (UPS) that will keep your critical systems running for a short period of time while waiting for the power to be restored.
If the power is not restored within that time, your fallback plan could be to shut down any servers and route calls to a branch in a different city where the power is still on. This is not your preferred option because the extra call volume being directed to that center could cause delays in answering calls, but it’s better than the alternative of calls not being answered at all.
At what stage in project management should you create a fallback plan?
Fallback plans are a part of your risk management plan and should be created alongside your contingency plans. These are usually created during the second phase of your project management plan. During this part of the project, you’re focused on planning, identifying risks and risk responses, and considering resource allocation.
Adding fallback options to your project plan gives you an extra layer of security and puts you in a better position to respond to the unexpected. One useful strategy is to identify risks, describe them in a risk register, assess those risks, and allocate resources from the management reserve to mitigate those risks with contingencies and fallback options.
Fallback plans are particularly useful for large or complex projects that have a lot of potential risk factors. They make up an important part of your contingency response strategy. In some projects, the fallback plan itself can create risks. For example, you may choose to run cables for outdoor heaters in case it’s cold on the day you host an outdoor event. However, those cables could present a tripping hazard, and you may also need to fence off the heaters to prevent people from getting burned by getting too close to them.
If the response to a risk introduces a new risk, this is known as ‘secondary risk’, and you’ll need to consider how to mitigate the secondary risk also. A secondary risk is not unique to fallback plans; it can happen with contingency plans, too. However, when you’re putting together your risk register, be mindful of any new risks you might create, but it’s important to be realistic about trying to account for every single possibility.
Benefits and drawbacks of creating a fallback plan
Having fallback plans is useful because it gives you peace of mind and provides an additional layer of options. If your contingency plans don’t work out, your fallback plan could still help you stick to your project timeline and meet essential deadlines. However, when you create a fallback plan, you’ll need to allocate some resources from your management reserve to account for that possibility.
In large or complex projects, having a fallback plan makes a lot of sense. Project managers who study for certifications such as Project Management Institute – Risk Management Professional (PMI-RMP) are taught to assess project risks and learn how to turn risks into opportunities. Having multiple options for dealing with risks is a part of this process.
If your project is smaller in scale, however, you may not need such detailed plans, and simply having a clear risk register will suffice. It’s up to each project manager how they put risk management into action in their environment.
Fallback plans in action: supply chain disruption
It’s possible to use fallback plans in any industry. Let’s consider the example of a manufacturing company that is worried about supply chain disruption. This can occur due to anything from extreme weather to shipping delays or even the loss of a supplier.
A contingency plan could be to purchase parts from a second supplier. However, doing this creates risks, such as:
- The new supplier may charge higher prices
- The product from the new supplier may differ in minor ways that impact the production process
These are secondary risks that must be accounted for, even if the plan works out. In addition to these secondary risks, there are other potential problems:
- The new supplier may have their own stock issues and be unable to deliver the product
- The shipping issues that caused the initial delays may also affect your second supplier
Fallback plans can mitigate that risk. If you’re unable to source the required parts in time to continue production, your fallback plan could be to change the specification of the product you make so it doesn’t use that part or to temporarily halt production and offer discounts or substitutes to customers who placed a preorder to make up for the delays.
Deploying and tracking fallback plans with monday.com
As you build contingency and fallback plans into your project and think about identified, unidentified, and secondary risks, your plans can become quite complex. Using the right tools is essential to help you keep track of sprawling project documents.
monday.com offers a variety of project management trackers and templates to help you build a detailed and versatile project plan. These templates include everything from timelines to risk registers. If the thought of mapping out risks and contingencies for your project fills you with dread because you don’t know where to start, simply load up a template in your dashboard and work through the fields as they prompt you to consider the probability, impact, and response options for each risk.
Once you’ve assessed the risks to your project, you can develop contingency and fallback plans, chart those in your project management dashboard and assign them to the relevant teams or people. Thanks to monday.com’s easy integration features, project managers can deploy tasks to third-party tools, generate charts, or export data with just a few clicks of the mouse.
Frequently Asked Questions
What is a fallback plan?
A fallback plan is a plan that is implemented if a risk occurs and the contingency plan fails. Fallback plans are designed for residual risk and are an extra line of defense when things go wrong.
What is the difference between a contingency plan and a fallback plan?
Both contingency and fallback plans are important parts of a project’s risk management process and have several similarities. The two plans are closely tied together because when the contingency plan fails, the fallback plan is implemented.
Plan for the unexpected
Risk management can be one of the most challenging parts of building a project plan. Identifying and creating contingency and fallback plans requires a clear head and a systematic approach. The monday.com WorkOS and project management templates can help you with this process, putting your project on the path to success.
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