Contingency Planning is a general approach to estimating and managing tasks and their durations in an emergency situation. The approach is similar to PERT analysis as it uses certain parameters to make duration estimates. PERT analysis uses three parameters (Pessimistic, Optimistic and Most Likely), while contingency planning develops a task time estimate through the following two parameters:
- Base: a minimum expected amount of time required for completing a task when everything goes well
- Contingency: an amount of trust put on Base when risks are calculated and considered
The advantage of using this technique in estimating task duration is that it helps schedule tasks that are performed under uncertainty and risks. The disadvantage is that the technique requires considering all possible risks and threats, so more money and resources are to be spent on risk identification and mitigation.
Here is an action plan for using Contingency Planning in estimating task duration by the two parameters:
- Define a task for estimation
- Calculate time period required for the task to be completed with minimized risks involved. This period will be "Base" parameter.
- Use Base to develop a task timeline
- Define risks that may arise as the task is performed
- Analyze impact of possible risks on the task and its duration
- Determine "Contingency" parameter as a percentage of Base (a measure of 10%-20% is quite normal)
- Extend the timeline for the amount of Contingency
- Add milestones to the timeline to check critical moments when risks have the greatest impact on the task
- Develop the final duration estimate for the task.