As we know risk is an uncertain event which can hinder the success of the project. Often risks can lead to unexpected losses. There are two ways we can reduce or tackle the risk. They are risk mitigation and risk contingency. These are risk management techniques. This page compares risk mitigation vs risk contingency and mentions difference between risk mitigation and risk contingency.
The risk mitigation is like reducing or minimizing the risk when it occurs. This technique helps to reduce the impact when the risk already happened.
Though risk mitigation is carried out when the damage is already happened, but the actions to be taken as part of risk mitigation should be pre-planned. These actions should be informed or communicated to the respective project stake holders.
Example: The classic example of risk mitigation is to carry second piece along with you. Suppose your mobile phone gets fauly during your long journey by train then you can use other mobile phone immediately.
Risk contingency is like keeping backup plan in the worst scenatio when risk occurs. It helps organization adopt to another method or process without suffering much loss.
In risk contingency, back up plan is made much before actually risk occurs. The actions are taken when risk occurs in the case of risk mitigation.
Risk mitigation is targetted to reduce the effect of the crisis while risk contingency is targetted to solve the issues/problems in the event of crisis.
EXAMPLE: The example of the risk contingency is that if something gets faulty you will have some plan to get it rectified. Taking this into considerations, the project timings are planned.
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