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Deciding on Project Charter Assumptions

written by: Bruce Tyson • edited by: Michele McDonough • updated: 6/18/2013

When deciding on project charter assumptions, managers should focus on major issues, so executives can determine whether to accept or mitigate the risk those assumptions represent. Too many assumptions can divert attention, leaving the project manager vulnerable in the event the project fails.

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    Starting on Common Ground

    projectcharter Project charter assumptions are circumstances and outcomes taken for granted in the absence of concrete information. Projects are often affected by information and events that the team either does not control or does not understand, yet assumptions need to be made concerning these to allow the project to progress. Common but often undocumented assumptions involve the existence of project funding and of core competencies. Other assumptions are riskier and require thorough assessment before they can be included in the project charter.

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    Assumption Analysis

    Every assumption in the project charter should be written down and then analyzed for instability and sensitivity. The stability of an assumption determines how likely it is to have a positive outcome. The sensitivity of an assumption deals with how the assumption would affect the project should it turn out to be false. Assumptions that are most unstable and highly sensitive should be highlighted so they can be given special treatment throughout the planning process.

    Although assumption analysis is useful for quantifying risk, the failure to uncover all relevant assumptions can jeopardize the planning process and the project itself. To protect against such failure, the project manager should involve as many of the project's stakeholders as possible so any assumptions they are making can be included in the project charter. Even when every possible assumption is included, the success of the project is still not guaranteed.

    Assumption analysis tends to evaluate risk on the positive side of assumptions, meaning that assumptions are considered to be valid unless proven otherwise. Some assumptions that may not even make project charter might include the availability or resources, the reliability of vendors, the support of senior managers, and the longevity of the project manager. As shown in these simple examples, assumption analysis can identifying threats, but is limited by its inability to identify opportunities.

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    Rating Assumptions

    Project charter assumptions can be prioritized by assigning them numeric ratings. A confidence rating to an assumption gives the project manager a tangible value of its certainty, or the likelihood the assumption will prove to be true. Assumptions that are hard to predict will receive low confidence ratings that can help drive the planning process.

    Lead time is the measure of the time necessary to validate an assumption. A low lead time rating means that the assumption will be validated in the first half of the project while a higher rating is given to those being validated closer to the culmination of the project. The longer the project operates on an assumption, the more volatility will be introduced should the assumption be proven incorrect.

    Finally, assumptions are rated based on their impact on the project, mainly how much rework will be required if an assumption is proven false. Because assumptions with higher ratings can have potentiality devastating effects on budgets and deadlines, the project manager will know to spend extra time planning for contingencies.

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    Managing Assumptions

    Generally speaking, measures should be taken to eliminate as many assumptions as possible through the planning process. Still, assumptions are a normal component of any project charter, and adequate attention should be given them. While some project managers might be tempted to list dozens if not hundreds of assumptions in the project charter, the effective manager will limit the number to include those that present the most danger to the project. By including only high priority assumptions during review with senior managers and executives, significant issues can be addressed up front and the project manager will be protected should any prove to be invalid.

Project Charter Resources & Tips

Whether your project is large or small, it needs a solid project charter. Find tips on how to construct this important PM document as well as sample templates, guidelines, information on different format styles, and more.
  1. What Is a Project Charter?
  2. Project Charter Example for Every Project Manager
  3. What Goes Into Writing a Project Charter?
  4. Deciding on Project Charter Assumptions
  5. How to Create a Project Charter in SmartDraw