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Do You Practice Assumption Management With Your Projects?

December 3, 2015 by

As few projects start with absolute certainty, most projects will be based on many assumptions. An assumption is something you believe will be true in the future.

 

 

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Some assumptions must be made on projects when there is a lack of information available to predict the future accurately. If project managers had to wait for absolute certainty, most projects would never get off the starting block within organizations!

Experienced project managers do their best efforts to get better at making assumptions and eliminating as many of them as possible.

 

Assumption Management

As projects are planned and executed, some facts and issues are known whilst others must be estimated.

Project managers can’t just hope they will have the necessary resources to complete a project successfully.

For example, if the required resources are not available, then key project milestones may be missed and the project will fail to achieve a successful outcome.

Project managers have to manage and mitigate using informed assumptions and constraints. Project managers need to make a brief and clear-cut description of any project assumptions related to:

  • Scope
  • Budget
  • Business Sponsorship
  • Requirements
  • Resources
  • Customers
  • Technology
  • Expectations
  • Third Parties
  • Other Assumptions.

 

The PM will document and communicate this list of those assumptions to key stakeholders.

 

Assumptions in Projects

  • Assumptions apply at all stages of the project and are typically are documented at the start of a project. They are usually filed in a drawer and ignored.
  • Assumptions add risk to a project since it is possible that they will turn out to be false.
  • Assumptions can impact any part of your project lifecycle and resulting solution implementation, so it is important to document and analyze them.
  • Assumptions usually carry implications and these should be documented with any resulting actions if they are not met.
  • Making assumptions set benchmarks that are often revisited during the project to aid the project team in staying within scope, on time and within budget.

 

An Assumption is Not a Constraint

  • Assumptions are forecasts about what may happen in the future, while constraints are limits on freedom of choice.
  • Constraints can have a negative effect on the project and are not ofter under the control of a PM.
  • Business constraints are a common type of constraint that limit the project based upon the current organizational environment.
  • When determining assumptions, it may be important to consider any project-related constraints as they may drive the identification of further assumptions.
  • Constraints need to be identified and incorporated into the project plan to ensure that the plan is realistic.

 

Typical Constraints

  • Constraints are usually focused on time, money, and resources for a project:
    • Schedule
    • Budget
    • Resources
    • Skill levels
    • Legal
    • Procurement
    • Dependencies
    • Policies
    • Technology
    • Other constraints.

 

PMs will need to make a description of any major limitations impacting a project including:

  • Budget – the estimated cost of the project, allocated to tasks, resources, and phases as needed to complete the project
  • Schedule – estimated tasks and events needed to complete the project, organized into a structured sequence to meet a specified project end date
  • Resources – the estimated staff resources needed to complete the project, according to number, type, work hours, and skills
  • Third Party Suppliers – the anticipated performance of contractors, vendors, and suppliers to deliver goods and services according to contracts and project requirements.
  • Other key factors – that could affect a project successful outcome.

 

Project Dependencies and Assumptions

  • Dependencies are basically deliverables from other projects which your project needs in order to launch.
  • Often dependencies get overlooked and a key factor why projects go off track and miss their milestones and target dates.
  • It’s important to determine a link between project assumptions and constraints, and then identify any dependencies between them
  • Again PMs need to document and communicate the dependencies for use in developing the project plan.

 

Risks and Assumptions

  • The main difference between an assumption and a risk is that when a PM makes an assumption, the PM expects that assumption will happen.
  • If the assumption is true, the project will be OK. If the risk happens, then the project may not be OK.

 

The Assumption Management Process

1) Identify and Challenge

  • The first step in the “assumptions” management process is identification.
  • The phrase “I think” occurs a number of times during a meeting.
  • Check the confidence level of the team in completing the project.
  • Is there is a lack of confidence in the voices of the team when discussing a project?
  • Keep asking the question – what were the original assumptions and are there new ones?
  • Challenge all assumptions and constraints.
  • Ask If any assumption proves to be false what will be the consequences?
  • Collect all assumptions.

 

2) Assess

  • Each must be viewed with an appropriate degree of skepticism.
  • Quantify the assumptions as much as possible in order to determine which assumptions have the greatest impact on the pack.
  • Assumptions should be evaluated according to the confidence level.
  • Ask the question – ‘if this assumption is proven incorrect, what will be the likely consequences for the project?’

 

3) Incorporate

  • Once assumptions are identified and assessed, they must be incorporated into the relevant portion of the project plan.
  • Assumptions, combined with what is known, will drive the formation of the project plan with the following:
    • Planned tasks
    • Schedule
    • Budget
    • Resources.

 

4) Control

  • As assumptions have the potential to impact projects negatively, it is the responsibility of project managers to monitor and manage them.
  • PMs stop assumptions becoming the accepted wisdom by monitoring them.
  • It is necessary to track assumptions to assess their impact on the project and to track their management to be able to challenge them and to develop contingency plans should they prove to be invalid.
  • Assumptions can be simply monitored by regularly reviewing them with the project team.
  • In these reviews, a PM should ensure that actions are given to follow up any questions arising, and that these actions are tracked
  • By doing this task a PM reduces the likelihood of an assumption becoming the accepted wisdom.
  • Initial assumptions are rarely static and as a project evolves, assumptions will be proven true or untrue.
  • A PM can limit the impact false assumptions will have on a project by managing them.
  • To manage assumptions a PM can use the Risk Management Process.
  • A PM should ask what would it mean to the project if the assumption turned out to be false.
  • By asking “what would it mean”, the PM is understanding the impact if the assumption was false.
  • By asking “if the assumption turned out to be false” the project team are gaining an understanding of the probability of the assumption being false.
  • if a PM has an assessment of impact and probability for the assumption being false, the PM can record it in the risk register as a risk, and use the risk management process to keep track of it.

 

5) Review

  • Once a project is complete, assumptions should be reviewed as part of an overall “post-project” review process, to evaluate all steps taken for identification, assessment, incorporation, and control.

 

Best Practices For Assumption Management

  • Assumptions need to be specific and manageable and should be based as much on fact as is reasonably possible at the time that the assumption is made.
  • It is vital that areas of uncertainty are recorded and the accuracy of the assumption is increased as more data becomes available.
  • Assumptions need to be monitored and managed throughout the project lifecycle on an on-going basis in order to review and test any assumptions.
  • Assumption management is directly tied to managing risks because they both relate to unknowns.
  • It is a best practice to perform a quick review of key assumptions at the same time you are updating the risks.
  • Assumptions should be reflected in the Risk Log and reviewed at regular risk meetings.
  • The Risk Log provides a standard means for recording assumptions and how they were derived:
    • Determining the ownership of the assumptions.
    • Evaluating the stability of and the impact on the project if any of the assumptions prove to be true or false.
    • Defining the actions necessary to progress and monitor the assumptions.
    • Making provisions for conflicting assumptions.
    • Scheduling when assumptions are to be validated and reviewed throughout the life of the project.
    • After a project ends, assumptions may need to be reviewed as they could negatively impact the post-project benefits realization process.

 

The Danger with Assumptions

  • The key danger specific to assumptions is that they become accepted wisdom.
  • As project changes occur you may not know the exact impact of the change on the project.
  • This is why assumptions must be managed throughout the project lifecycle.

 

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