MANAGING ASSUMPTIONS DURING PROJECT EXECUTION AND PLANNING.

Adequate project assumptions management is a key issue for the successful implementation of the Concurrent Engineering. Some useful methods for managing assumptions are listed below:

1. Assumption-Based Planning:
   Assumption-Based Planning (ABP) is a tool designed for improving the robustness and adaptability of plan for reducing the number of avoidable surprises in any plan or planning. It is primarily a post planning tool that concentrates on the assumptions in an already-developed plan that are most important to plan´s success and that are most uncertain. ABP decrease the risk that assumptions represent.
2. Critical Assumption Planning:
   Major uncertainties in the business proposition are isolated as critical planning assumptions. Critical assumptions in the plan are then tested. The test sequence is determined by the potential reduction of uncertainty per dollar of test cost. Assessment of the assumption test results marks a milestone. At each milestone the business plan is revised to reflect what has been learned, and the venture is redirected or terminated. This process avoids the wasted effort and expense of pursuing the original plan until commercial failure becomes obvious.
   Keys for Planning:
   Differentiation between primary and derivative assumptions with focus on extracting and understanding the primary assumptions.
   Early construction of a model of the business plan that allows calculation of the impact of primary assumptions such as price or sales productivity factors on derivative assumptions such as revenues and income.
   Assignment of uncertainty ranges to the primary assumption values, not just the most likely values.
   Identification of the critical planning assumptions by determining the impact of their uncertainty ranges on venture net present value.
   Selection of the next venture milestone based on the test program that results in maximum reduction of uncertainty at least cost in least time for the most critical assumption(s).
3. Platform-based planning:
   Future results can be extrapolated from a well-understood and predictable platform of past experience. Predictions could be accurate because they are based on solid knowledge rather than on assumptions
4. Discovery-Driven Planning:
   Discovery-driven planning offers a systematic way to uncover the dangerous implicit assumptions that would otherwise slip unnoticed and thus unchallenged into the plan
   It is based on the implementation of:
   Reverse income statement:
   Modeling the basic economics of the business
   Pro forma operations specs:
   Laying out the operations needed to run the business.
   Key assumptions checklist:
   Ensuring that assumptions are checked
   Milestone planning chart:
   Specifying the assumptions to be tested at each project milestone.

References: 

Towards a Proposed Process to Manage Assumptions during the In-Service Phase of the Product Lifecycle, John Iley and Cees Bil, Transdisciplinary Lifecycle Analysis of Systems R. Curran et al. (Eds.), 2015 The authors and IOS Press.

Critical assumption planning: a practical tool for managing business development risk, Hollister B. Sykes & David Dunham, Journal of Business Venturing Vol 10.

Assumption-Based Planning: A tool for Reducing Avidalbe Surprises, James A. Dewar, Cambridge University Press, RAND 2002.

Discovery Driven Planning,   Rita Mc Grath & Ian MacMillan, Harvard Business Review July-August 1995 Issue

Discovery Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity, Rita Mc Grath & Ian MacMillan, Harvard Business Publishing.

Practical Project Risk Management: The ATOM Methodology, David Hillson & Peter Simon, Management Concepts Inc., Aug 1, 2012