Contingency Planning Methodology
I. Organization
Most businesses organize their projects based upon two aspects - people and responsibilities. Contingency Planning is no different. The tasks outlined for this phase are to define who's participating and what they are responsible for.
- There are four important roles involved in contingency planning projects:
- The Executive Committee,
- The Contingency Planning Task Force,
- An executive management team, and,
- Some number of teams to conduct the contingency planning activities themselves.
Responsibilities are divided among the executives, management and staff within the business units. A unit can be any division, facility (e.g. refinery, terminal, service stations), or department (e.g. accounting, human resources, communications). Each unit will be able to further define itself in terms of business functions and business processes.
A. Establish Contingency Planning Task Force.
One prerequisite to contingency project planning and initiation requires establishing sponsorship, defining project roles and assigning responsibilities within various technical and business units.
Executive sponsorship, driven by the CEO, CFO other top-level executive, is essential to launching top-down planning efforts within business units. While bottom-up planning can proceed at a localized level within technical and business teams working through individual projects, top-down planning demands support from top ranked business executives across business units and functional areas. This is why it is important that the director of the contingency team report to a senior executive.
Once sponsorship has been established, the project director should define and expand on the following roles and responsibility requirements for the contingency planning project.
- Contingency Planning Director: Responsible for overall project direction and success
- Contingency Facilitator: Has knowledge of the contingency planning methodology and
ability to work with central and distributed teams to help draft contingency plans
- Contingency Coordinators (from major business units assigned in next section): Drive
contingency planning efforts within individual business units and report progress back to
central committee
- Technology Representatives: Responsible for communicating and coordinating bottom-up IT
and non-IT planning
- Facility / Infrastructure Owners: Responsible for power, telecommunication and other
enterprise infrastructure contingency plans
- Legal Counsel: Advises contingency team on legal risks and develops legal contingencies
- Executive Representation: Addresses revenue continuity contingencies, including
repositioning global strategies in the face of customer problems or economic downturn
- Project / Progress Coordinator: Centralizes project plans, assists with building and
integrating contingency database and produces ongoing progress reports
- Communications Coordinator: Incorporates contingency strategies into communication plans
Best Source:
Coordinate with senior management to establish this team.
Deliverables:
Documented set of roles and responsibilities required to manage the contingency planning
initiative.
B. Identify Contingency Planning Team Leaders for each division, major business unit or physical facility.
The Contingency Planning Team is a group of division, facility (e.g. refinery, terminal, plants or other physical sites) and / or department (accounting, human resources, communications, etc.) managers and analysts with a broad understanding of that segment of the organization. Team leaders are responsible for preparing contingencies, deciding what risks are worth addressing, executing contingency plans and responding to unanticipated driven events. They will direct, review, approve and deliver all work done in regard to contingency planning.
Best Source:
Contingency Planning Task Force.
Deliverables:
Documented set of roles and responsibilities required to manage the contingency planning
initiative for each business unit.
C. Identify high-level business functions within the business unit.
The terms "business unit" and "business function" are used throughout this workbook. A "business function" is a description of work that is performed to accomplish a unit's responsibilities (e.g. delivering raw materials, paying bills, receiving cash, receiving inventories, discharging waste, etc.). The term "business unit" refers to a division, major organization or major facility. A business unit contains all the functions that a contingency manager / coordinator is responsible for in terms of contingency planning. The terms "business unit" and "business function" are simply categories used to organize a business into layers for purposes of contingency planning or other activities that you may deem appropriate.
The forms and contingency planning database used to implement this approach allow you to define two levels of business categories (units and functions). This design prevents people from spending too much time defining business unit's responsibilities. Keep in mind that you are simply using business units and functions to create contingency plans. Should a business unit need to delineate business functions at a deeper level (i.e. a process), analysts should feel free to document these additional levels by modifying the contingency planning forms and database described in the Appendix of this workbook.
Define how you want to divide a business unit (responsibilities) in terms of business functions and record the following information:
- A unique identification number assigned to each business function. Note that the
database tool does not allow duplicates, so each business function requires a unique
number.
- A name for each business function.
- The name of the executive in charge of the business function.
- Use as many business functions to represent a business unit as required, but remember to focus on mission-critical business requirements.
How to record:
Each of the tools shown below is described in more detail in the 'Preparation' section of
this workbook.
Forms:
Open the Forms Word and document and record business functions on the Business Function Data Collection Form.
Database:
Open the Access database named Contplan.mdb. Click on the 'Business Function Form' and
record the appropriate information.
Best Source:
Ask business analysts for that division for a list of key business functions within that
division.
Other Possible Sources:
Organizational charts, internal phone books, the Annual Report, business plans,
reengineering plans, project plans, etc. See Appendix D for further suggestions.
Deliverables:
Business Functions identified and documented on planning forms and in the database.
D. Assign a team to be responsible for the contingency planning for each business function.
Assign a team or teams to participate in the contingency planning project for each of the identified business functions in a business unit. This team is responsible for the following tasks.
- Identifying the business processes within the business function
- Identifying and analyzing the risks associated with each business function
- Proposing, developing and implementing the contingency plans for each business function
- Proposing, developing and implementing the Crisis Management team for each
business function
- Reporting developments, issues and progress to the manager in charge of planning within that division or business unit throughout the end of the project.
The team should include the following roles and responsibilities.
Contingency Facilitator: Has knowledge of the contingency planning methodology and ability to work with central and distributed teams to help draft contingency plans
Business Analysts: Provides top-down planning input on business functions, the criticality of those functions and interfaces with other functions outside that business unit
IT Representatives: Develop bottom-up, tactical plans for systems, major projects, vendor packages, data interfaces and localized technology infrastructures and provide input to top-down planning teams requiring technology and functional dependencies
Non-IT Technology Coordinators: Create bottom-up non-IT & embedded system contingency plans and provide input to top-down planning teams on non-IT and functional dependencies
Supply Chain Coordinators: Develop bottom-up, tactical supply chain contingency plans and provide input to top-down planning teams on supplier-related functional dependencies
Vendor / Supplier Representation: If a vendor has an unusual level of influence within an organization, management may want them on the contingency planning team
Deliverables:
Documentation of the team members in a project plan or other location, as appropriate.
E. Incorporate / synchronize contingency planning tasks into other initiatives.
Progress and costs associated with related contingency planning requires tracing for tax, financial, regulatory, legal and other purposes. The following tasks apply.
Discuss how the business unit is handling the finances for projects with business unit managers.
Review legal implications of the plan with regulators and in-house counsel.
Consider the impact of merger, acquisition or divestiture activity on contingency plans.
Begin tracking the progress of the Contingency Planning project.
Report the progress to the Program Office according to the schedule they request.
Most important, contingency plans require monitoring for conditions that trigger a unit to take actions. These actions include implementing a contingency plan, reviewing how well a plan is working and eventually retracting the plan.
Ensure that the contingency plan created during this effort is readily modifiable. Note that the contingency planning database facilitates the updating and deployment of contingency plans.
Revise status reporting process/reports to include any contingency plans developed throughout the contingency planning project.
Deliverables:
The means to report progress (status report, email, project plan report, etc.), track
costs and update contingency plans.
F. Develop a project plan to manage contingency planning efforts.
Using standard project management tools and practices, develop a project plan for contingency planning efforts. To enable the Contingency Planning Task Force to more readily track concurrent contingency planning projects, use the following topic categories.
I. Organization
II. Preparations
III. Business Risk Analysis
IV. Contingency Planning
V. Crisis Management Planning
VI. Management of Contingency Planning/Crisis Management Team
Best Source:
See Appendix A for a project plan template that mirrors the steps in this workbook.
Deliverables:
A project plan divided into the above high level phases.
G. Share contingency project plan with the Project Office.
The central contingency planning team requires input on contingency plans from each business or technical planning unit.
Deliverables: For each business unit:
Documentation identifying the Contingency Planning Team
The Contingency Planning Project Plan
Demonstration that the plan is being synchronized with other business initiatives and legal experts