What Does It Mean

Assumption is something that you are accepting as true but for which there is no evidence to prove it is correct.

For a business case this could be but is not restricted to:

  • Market prices (includes estimates)
  • Dependences on other projects/services
  • Conditions will or will not happen
  • Savings potential
  • Qualitative benefits
  • Work/ Effort
  • Ability to Deliver.

What’s In It

You need to understand following for assumptions:

  • Assessment
  • Benefits
  • Constraints and Limits
  • Dependency 
  • Estimates 
  • Impact 
  • List/ Register
  • Modelling
  • Options
  • Optimism Bias
  • Risks
  • Scope
  • Sensitivity Analysis
  • Values

Case Roadmap

The following table shows the relevance of assumptions in the context of the main eHealth business case stages:

Task Initial Agreement Outline Business Case Full Business Case
Assessment Initial impact assessment of assumptions against benefits, costs and risks Undertake a detailed assessment of significance of assumptions across options Agree the optimum assumptions accepted by the stakeholders and project
Constraints and limits Identify the acceptable conditions and limits for assumptions Build / identify evidence to reduce assumptions and improve conditions Confirm and agree acceptability of assumptions at finalisation
Costs Estimated costs based on investigations and assumptions Reduction of assumptions – more evidence including project/service specific estimates and actual costs Actual costs calculated based on minimal or no assumptions
Manage Dependences Identify external dependences Assess the pros and cons of the dependences and realign assumptions appropriately Finalise agreements to provide confidence in dependences
Management of assumptions Start an assumptions list Update assumptions list – amending and reducing as actual evidence improves Reduce assumptions list to those accepted at point of finalisation
Optimism Bias Applied to determine benefits, costs and risk values Apply optimism bias to determine benefits, costs and risks with associated estimates and or assumptions Revision/ rework of previous business case calculations to reflect changes
Scoping Identification and declaration of all assumptions applying for the project/service Classification and clarification of areas impacted by assumptions Confirmation and implications of assumptions remaining at finalisation
Sensitivity   For assumptions significant to the options appraisal apply modelling to investigate the impact on the options both separately and combinedi.e. vary the value/degree/level of the assumption(s)identify the level of stability of preferred option(s) and base recommendations on most appropriate conditions Changes since previous business case are revisited
Value Initial impact assessment value of assumptions Net present value calculations applied as well as allowance for assumptions Net present value for proposed solution

N.B. There could be more than one iteration of the OBC and/or FBC. The more accomplished during the OBC stage the less remaining for the FBC. It is possible that with the exception of the finalisation no risk work be required in the FBC.

March 29th, 2011