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Make your assumptions "SMART"

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During the stage of business solution conceptualization, assumptions become a subject of primary importance owing to their contribution to the building blocks of the solution framework. Hence, it is imperative that a careful diligence exercise is carried out while selecting them out from a whole list of available options.


Assumptions are very basic ingredients in every business solution; particularly during the stage of its conceptualization.  Practically speaking whenever an opportunity is being targeted or being developed for positioning a solution offering, the constraint of non-availability of relevant information (in terms of business operating model, resource structure, volumetric data etc.)  is always present . Hence in almost all cases the solution framework is built by setting some assumptions in place so that an approach is established first which can later be verified and aligned with the real scenario as and when the opportunity moves towards maturity.

Given the nature and application of the scenario in question, assumptions become a subject of primary importance owing to their contribution to the building blocks of the solution framework. Hence, it is imperative that a careful diligence exercise is carried out while selecting them out from a whole list of available options, so that only the ones having the "highest probability" of application in the scenario in question gets recorded. In fact in many cases these are required to have a direct relevance to the contract agreement clauses, so that during the stage of negotiation going forward it is capable of providing a level playing field against the party on the other side of the table.

The task of framing these assumptions or "assuming" to build a solution is not easy; and it requires the right mix of domain expertise and suitable experience to take a deep dive into the existing dimensions of the opportunity / opportunities and translate or align the possibilities towards realities. During the stage of setting assumptions it is always important to keep in mind the element of risk involved against the particular assumption and also analyze the impact of those risks on the overall effort, schedule, resources, process complexity and the budget.  In any case the "assuming" task actually becomes a "real task" for solution development and follows more or less a fixed pattern of first identifying the uncertainties, next assessing them for impact, and finally incorporating them to create the baseline for the solution.

So the assumptions being the foundation of identifying and incorporating uncertainties should also find a way of reducing or eliminating the impact of risk which may set in during the course of the actual execution. This should clearly have both the context of the situation and also a roadmap to handle the contingency by creating the ground of negotiation. In one word assumptions should be "SMART" enough to bring out the most probable outcomes in the situation by being:

S - Specific to the situation/ context and not generalized, for e.g.:  " the average handling time for international freight bill processing is 15 minutes from the time of receipt of the bill"  rather than "average handling time for invoices is 15 minutes"

M - Measurable, for e.g.: "90 days of warehouse storage considered" rather than "warehousing storage considered for the period of execution"

A - Appropriate to the solution by mentioning basis, for e.g.: "the order volume(s) considered is based on 1 PO = 1 sales order with exclusions of bulk order scenarios" rather than just stating the volumes

R - Risk Mitigating to accommodate any impact due to market factor dependency, for e.g.: "the international freight is inclusive of fuel surcharge as per FSC index published on xx month/year and valid till xx month/year", rather than indicating the FSC amount

T - Time bound to accommodate market and situational changes, for e.g. mentioning the validity period of the assumptions which is mostly applicable for labor, infrastructure related rates OR like adoption of some new technology that transforms the process itself etc.

It is highly probable that if you assume what you wished for as happening, the "improbable" becomes a reality; but if you are SMART enough to judge the probability of the wish and its relevance to happening, it is probable that you may eliminate the "improbable".

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