Assumptions are an important part of any project. Assumptions usually require some type of follow-up or validation in order to determine whether or not they will impact the project.
No-one can predict future with perfect certainty, this is the reason we keep guessing while making decisions in our projects, businesses and life in general. These guesses are actually “Assumption ” which become sources of Risk.
As per PMBOK , Assumption is defined as “ A factor in the planning process that is considered to be true, real, or certain, without proof or demonstration “.
Assumptions are documented in Project Charter during Project Initiation by Sponsor and in Project Scope Statement during Project Planning by Project Manager.The Project Plan would list down all the assumptions that are relevant to the current project.
The Assumption Log is a document which the project manager and team use to capture, document, and track assumptions throughout a project’s lifecycle.
Each assumption should have an owner or team member responsible for following up and validating the assumption. The Assumption Log assigns each assumption an ID or reference number, a name and description of each assumption, responsible person, due date, status, closure date, and any actions which might be required as part of the follow-up or validation.
The Assumption Log should be updated as items are closed or more information is obtained. The project team should also review the Assumption Log regularly to ensure all project team members are informed and any additional actions or information is captured.
As per PMBOK , Assumptions Analysis is defined as “A technique that explores the accuracy of assumptions and identifies risks to the project from inaccuracy, inconsistency, or incompleteness of assumptions.”
Assumption analysis is done during Risk identification process . Many assumptions may actually be project risks, or may become risks during the life of the project. In addition to creating an assumption log, be sure to perform proper risk management on your project with a risk management plan and risk register. The assumption log should be used to augment your risk register – it should never be used in place of the risk register.
A simple IF-THEN statement can be written for each assumption, in the form : “IF this assumption proved to be false, THEN the effect on the project would be …”
The IF side tests how likely the assumption is to be unsafe, and the THEN side tests whether it matters. Another way of describing this is to see the IF statement as reflecting probability, whereas the THEN phrase is about impact. And probability and impact are the two dimensions of risk. This simple approach can be used to turn project assumptions into risks.
Where an assumption is assessed as likely to be false and/or it could have a significant effect on one or more project objectives, that assumption should be considered as a candidate risk.
Assumptions Analysis is not good at identifying opportunities because most of our assumptions are optimistic.
For opportunity identification, the technique can be extended to address and challenge constraints. These are restrictions on what the project can or cannot do, how it must or must not proceed.
In the same way that assumptions can be tested to expose threats, a similar IF-THEN test can be applied to constraints to identify possible opportunities: “IF this constraint could be relaxed or removed, THEN the effect on the project would be …”
Assumptions Testing is done during Risk Qualification. Before you can use the risk information collected, assumptions made when determining risks must be tested.
Each instance of assumption, if wrong, could add risk or cause the related risk to have a greater probability or impact.
A project manager should look at the stability of each assumption (how realistic or valid is it?) and the consequences if the assumption is false.
Such testing is performed not to establish the validity of the assumption which is already done during Risk identification but to evaluate stability and consequences.
Stability-This is the evaluation of the potential for change in a given assumption. Some assumptions, by their very nature, will change; they will not remain stable. This assessment should be used to determine the degree of stability for a given assumption.
Consequences-This is the evaluation of the potential impact to the project if the assumption proves invalid.
In assumptions testing, the stability and consequences are rated from 1 to 10. A stability rating of 5 to 10 means the assumption is valid. A Consequences rating of 5 to 10 mean the assumption could have a large impact on the project. We can use this scale or another scale based on our projects.
Instead of making assumptions about the future, or accepting that stated constraints are unchangeable, being prepared to challenge assumptions and constraints can expose significant threats and opportunities which can then be addressed through the risk process.
To conclude, this type of Assumptions Analysis is a powerful way of exposing project-specific risks, since it addresses the particular assumptions made about a given project.
The assumption log should be used to augment your risk register – it should never be used in place of the risk register.
To be fully effective, Assumptions Analysis needs full disclosure.