Contingency – Pill 008

That is a term widely used in project management, most of the time misused to justify a not well done planning or analysis. In project management Contingency is generally (and wrongly) used when talking about Times (when duration is uncertain) or Costs (the famous “safety bearings” to absorb some cost oscillation).

Actually that usage of Contingency is not correct, in fact it is a tool, and must be used as a tool, to manage risk.

The project total estimation

Contingency is about a risk we have already found, analyzed and assessed for which we decided to not do any pro-active action, but just hope for that risk to not happen. So the only action undertaken for that risk is to take into account that risk and that could bring to longer times or (and) higher costs.

The contingency must be taken into consideration in the budget estimation, it has to be always explicated and not be confused with some rounding of costs and times.

PS: Remember to:

  • Subscribe to my blog if you like it
  • Comment with your thoughts and opinions
  • Add me to your LinkedIn network her

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s