Project Assumptions: Types and the Risks They Pose

Every assumption you make for a project introduces risk. By raising your awareness of types of assumptions and the risks they pose, you can make sure that you develop solid risk management plans for them.

• Initial assumptions are part of every project proposal. When project ideas surface, you must make assumptions to estimate project benefits. In addition, you usually assume that business stakeholders will accept the solution approach. 

These assumptions are low risk because you validate them early in the project. If you’re diligent, initial assumptions can facilitate the early stages of a project without incurring undue risk. You can create a case study to validate benefit assumptions. Paper-based models or simple diagrams can show a proposed solution. Flowcharts can demonstrate how a new business process might work. Or you can build quick product to validate the project solution. 

• Planning assumptions relate to how you will execute your project. For example, you might have to assume the level of skill required to complete your project. You will validate these assumptions during planning as team members explore potential solutions (and determine whether they are simple or complex.) 

Risks like these are usually manageable — under one condition. The team members doing the planning should not feel pressure to say the project is doable. They should be free to identify complexities without consequences. In short, project planners need to be able to communicate the difficulties the project may face.

• Fundamental assumptions are resolved through execution of project scope. These assumptions are often necessary. But they are high risk because you might spend lots of money and time before you realize your assumption was wrong. For example, you might want to add functions to a system component that has a response-time constraint. You might have to assume the component can handle the extra workload, but you won’t know that for sure until you build the function and run the component.

For example, architects build models to help customers evaluate the appearance of a building. Once the building is under construction, the customer might not like it and request changes. 

• Project premise assumptions are the riskiest. These can be validated only by completing the project, for example, building a new product and introducing it to the market. While there were signs the iPad would be successful, there was also criticism of the idea. Only by producing the iPad and having customers use it were Apple’s assumptions validated. Projects with premise assumptions are gambles, so diligence is needed. Conduct as much market research as is feasible.

Bottom line: Make assumptions and follow up on them! We need them to launch our projects. By understanding the nature of your assumptions and when you can resolve them to assess your project risk.

If you have any tips or questions about assumptions, share with us in the comments section.

For more about assumptions and risk management, check out Bob McGannon’s Project Management Foundations: Risk course.