Risk management is a crucial part of project management. In your journey to becoming a Project Management Institute Risk Management Professional (PMI-RMP), you’ll often hear about assumption and constraint analyses. Both play vital roles in risk identification.
Assumptions Analysis
Assumptions are uncertain factors that, for planning purposes, we consider to be true, real, or certain. Every project makes assumptions – certain conditions under which the project will proceed. Assumptions are vital as they set the context in which the project will occur. An assumptions analysis helps identify risks to the project from such assumptions and thus a valuable input in risk identification.
One common technique is to list out project assumptions and assign each of them a rating based on its level of uncertainty and potential impact on the project.
Table 1: Assumptions Analysis
| Assumption | Uncertainty | Impact | Risk Level |
|---|---|---|---|
| All team members will be available | High | High | High |
In the example above, a project manager may assume that all team members will be available for the duration of a project. But if this assumption proves false, project deadlines could be impacted.
Constraint Analysis
Constraints are the factors that limit the team’s options in achieving project objectives. These can include time, cost, scope, quality, and risk. Constraints analysis identifies and assesses the potential impact of these constraints on a project. It helps evaluate the flexibility in dealing with project risks, thus providing valuable input to risk identification.
Table 2: Constraint Analysis
| Constraint | Severity | Impact | Flexibility |
|---|---|---|---|
| Fixed project deadline | High | High | Low |
In the example above, the fixed project deadline is a significant constraint, holding a high impact on the project because it leaves little to no room for adjustments.
Interaction between Assumptions and Constraints
Assumptions and constraints don’t exist in isolation; they interact and generate risks that might not have been evident looking at them individually.
For instance, if the project manager assumes that all resources are available for the project (assumption), but there’s a hard deadline for the project (constraint), this could pose a significant risk. If one or more team members fall ill or leave the project, it could be difficult to meet the fixed deadline.
Conclusion
In conclusion, both assumption and constraint analyses are crucial tools for risk identification. By systematically examining and regularly reviewing all assumptions and constraints, potential risks can be identified early, and mitigation or contingency plans can be prepared in time. As a PMI-RMP aspirant, understanding these concepts will be crucial in your risk management journey.
Practice Test
True or False: In assumption analysis process, it is important to document identified assumptions and constraints.
- True
- False
Answer: True
Explanation: Documenting identified assumptions and constraints is crucial for future reference, efficient risk analysis, and effective risk management.
Which one of the following is not a form of assumption analysis?
- A. Predictive assumption analysis
- B. Qualitative assumption analysis
- C. Quantitative assumption analysis
- D. Inferential assumption analysis
Answer: D. Inferential assumption analysis
Explanation: While predictive, qualitative, and quantitative assumption analyses are legitimate types of assumption analysis, inferential assumption analysis does not exist.
Project constraints can be categorized into which two types?
- A. Internal & External
- B. Assumptions & Risks
- C. Resource & Delivery
- D. Quality & Cost
Answer: A. Internal & External
Explanation: Internal constraints are within the project’s control while external constraints are outside the project’s control, such as regulations or market conditions.
Assumptions and constraints are similar concepts in project management.
- A. True
- B. False
Answer: B. False
Explanation: They are different concepts, assumptions are factors believed to be true, while constraints restrict the action or progress of the project team.
True or False: Assumption analysis is a tool/technique used within Perform Qualitative Risk Management process.
- True
- False
Answer: True
Explanation: Assumption analysis is one of the many tools and techniques used in perform qualitative risk management to help ascertain the validity of assumptions made during the planning phase.
The assumptions log in project management is used for:
- A. Documenting project assumptions and constraints
- B. Risk identification
- C. Risk mitigation
- D. Both A and B
Answer: D. Both A and B
Explanation: The assumptions log is used to document project assumptions and constraints, and it can also serve as a tool for Risk Identification.
One of the purposes of conducting Assumption and Constraint Analysis is to:
- A. Avoid any risks in the project
- B. Identify possible risks that can arise later in the project
- C. Lower the project cost
- D. Save time in the project execution
Answer: B. Identify possible risks that can arise later in the project
Explanation: Conducting Assumption and Constraint Analysis helps in identifying possible risks which can arise later in the project due to the incorrectness of assumptions or over-constrained resources.
True or False: Assumptions and constraints analysis should be performed only once during the project lifecycle.
- True
- False
Answer: False
Explanation: Assumptions and constraints should be revisited throughout the project lifecycle. Things can change and these changes could influence original assumptions and constraints.
Over-constrained projects are more prone to risks.
- A. True
- B. False
Answer: A. True
Explanation: Over-constrained projects often involve higher risks because they have less flexibility to deal with the unexpected changes or risks when they occur.
Which of the following should be included in the assumption analysis?
- A. Previous experiences
- B. Stakeholder vision
- C. Assumption validity
- D. All of the above
Answer: D. All of the above
Explanation: Assumption analysis should include all favorable and unfavorable experiences, stakeholder visions, and the validity of assumptions to gauge the project risk.
Interview Questions
What is an assumption in the context of risk management?
An assumption, in the context of risk-management, refers to a thing that is considered true, or at least probable, to enable a project or process to proceed as planned.
What are constraints in the realm of project risk management?
Constraints refer to the limitations, restrictions or boundary conditions which the project needs to operate within. These could include resources like time, budget, manpower, or even regulatory standards and compliance requirements.
How does an assumption analysis help in risk management?
Assumption analysis helps in risk management by identifying assumptions and evaluating their validity. It can help identify risks arising from inaccurate, inconsistent, or unverified assumptions. It enables effective risk identification, qualitative/quantitative risk analysis, and planning for risk responses.
What is the connection between constraints and risk in a project?
Constraints can be sources of risks in a project. If they are not identified, analyzed, and managed properly, they can severely impact the project’s progress, timelines, and successful completion.
What types of risks can come from the invalid assumptions?
Risks from invalid assumptions can manifest as unexpected costs, timeline overruns, poor quality, and resource shortages. Additionally, it can trigger other project risks or amplify the impact of an existing risk.
How does an Assumption and Constraint Analysis benefit project planning and execution?
It aids in identifying, evaluating, and preparing for potential risks that may disrupt the project. It helps develop contingency plans for risks, reduce uncertainty, enhances the quality of decision-making, and promotes proactive risk management.
How can risk managers validate project assumptions?
Risk managers can validate project assumptions through tools such as expert judgment, historical data, industry trends, market research, or conference with stakeholders.
What are the steps in conducting assumption analysis?
The steps in conducting assumption analysis are: identifying assumptions, validating assumptions, evaluate impacts of false assumptions, and determining responses for invalid assumptions.
Why are constraints analyzed in risk management?
Constraints are analysed because they set the bounds within which the project operates. If these bounds are not well defined it could lead to scope creep, schedule overruns or resource shortages.
What is the difference between assumption and constraints in risk management?
Assumptions are factors that are thought to be true but have no substantiated evidence. Constraints, on the other hand, are limitations that have been imposed on the project, such as time restrictions, workforce, and budget.
How do assumptions and constraints impact risk responses?
Assumptions and constraints influence the strategies chosen for risk response planning. The presence of certain constraints may limit available response options, while unfounded assumptions could result in inadequate or misguided responses.
What are some common constraints in project management?
Common constraints in project management are scope, quality, schedule, budget, resources, and risk.
Can assumptions change over the life of the project?
Yes, assumptions can and usually do change over the life of the project, as more information is learned, uncertainties are cleared, or project conditions change. Regular revalidation of assumptions is good practice.
How does project complexity influence assumption and constraint analysis?
As project complexity increases, the number and intricacies of assumptions and constraints are likely to increase, requiring more thorough and frequent analyses.
How can the project team address identified risks coming from assumptions and constraints?
The project team can address identified risks through various risk response strategies- avoid, mitigate, transfer, or accept, depending on the severity and impact of the risk. Contingency plans should be formulated for high-impact risks.
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