Project Assumptions: The Complete Guide

What happens if you don’t know the answers to a project plan?
An educated guess is one way to solve this problem. An assumption is a way of simplifying or filling in the gaps in a project.
These gaps can occur for many reasons and often occur before a project even begins. Some details or information may not be fully understood or are only partially available. It is normal to start a project with some uncertainty because the organization expects to make progress.
Either you assume the information will be readily available when it is needed or you simply use common sense to determine the most likely scenario. It doesn’t necessarily mean that it’s obvious for you.
We talk about and document assumptions because they are important.
It is important to understand the key assumptions of the project in order to document the scope of the project in a proposal or contract.
This article will discuss the various types of assumptions, how they relate to other parts of the project and the real reason you should have them documented. We also discuss how to manage them throughout the project’s lifecycle.
This article:
Common assumptionsFinancial/Budget
Resources
Scope
Environment

How assumptions relate to constraints, dependencies and risksImpact on project plan
Constraints and assumptions
Dependencies and assumptions
Assumptions & Risks

Document assumptions for the real reason
Tracking and managing assumptionsContracts & proposals
Log of key decisions and assumptions

How to validate assumptions in a project
To summarize…
FAQWho documents assumptions?
How can you identify assumptions?

Next steps

Common assumptions
These are some common assumptions that can have an impact on your projects.
Financial/Budget
Here are some examples:
The currency conversion rates will remain the same throughout the project
The project will not change the resource costs
There will not be any changes to the contractual billing rate throughout the project
Material costs will rise at 3% per annum

Currency fluctuations can have a negative impact on the project margin and budget. You can mitigate this by establishing a fixed currency conversion rate throughout the project. Although it is possible to set the rate for conversion at the business unit level rather than at the project level, it might be more appropriate.
You will likely have a financial contact if you are working on a project that involves multiple entities from different countries.
Project financial status can be affected by changes in cost, cost escalation and contractual billing rates. This is especially true for multi-year projects, where escalation or changes in contract rates are more common.
This can be managed by assuming that resource costs will remain constant and that price escalation won’t occur. This is a way to reduce the profit margin for every year that costs rise.
Alternativly, you can assume a certain amount of annual escalation (for instance 3% -5%) and include that in your overall project price.
Resources
Examples of assumptions
All tasks can be assigned resources
Customers are welcome to attend quarterly demos
The client will be able attend a site visit in the first week of each month.
The site will have the right environmental conditions for the year, so that resources can be accessed as planned.

Resource availability assumptions could refer either to internal or external human resource requirements during the project.
We might assume that the project is supported internally and that resources will be available to do the work. Or, that resources will be allocated in a timely fashion and that line managers will inform us who is assigned to what task.
Externally, resource availability