Other Influences on Project Management

Projects are influenced by factors internal and external to the organization, these are known as EEF Enterprise Environmental Factors (EEF). Examples of internal EEFs are company infrastructure, skill availability, risk attitude, governance approach, etc. Examples of external EEFs are political and financial climate.

Projects will use policies and standards of the organization, may use past metrics, and may apply lessons from previous similar projects. Such artefacts are called Organizational Process Assets (OPA).

Projects are also impacted by the organizational system which is comprised not only of organization structures which were described earlier but also general management and governance aspects.

Enterprise Environmental Factors

“Enterprise Environmental Factors (EEFs) refer to conditions:

• not under the control of the project team,

• that influence, constrain, or direct the project.

These conditions can be internal and/or external to the organization.

Enterprise Environmental Factors are considered as inputs to many project management processes, specifically for most planning processes. These factors may enhance or constrain project management options. In addition, these factors may have a positive or negative influence on the outcome.” (PMBOK Guide p38)

There are many different types of Enterprise Environmental Factors, and they are divided into 2 distinct groups: those that are external to the organization and those that are internal. I think of Enterprise Environmental Factors this way. Imagine you on the project team are travelling to another country on a cruise ship.

The ship represents the organization

Enterprise Environmental Factors internal to ship would include:

RESOURCE AVAILABILITY.

E.g. the vision, mission, values, beliefs of the shipping company. The rules of the ship, the expected behavior of the crew and the passengers, the code of ethics and rule of law. The leadership of the captain, as well as the hierarchy and authority relationships of crew members.

GEOGRAPHIC DISTRIBUTION OF FACILITIES AND RESOURCES.

E.g. there would be a floorplan of the ship, showing the facilities on each deck, and you would have information about your cabins, where to eat.

INFRASTRUCTURE.

E.g. there would be details of what equipment is available for your use on board the ship, for example, computers and gym equipment.

RESOURCE AVAILABILITY.

E.g. you would have a list of staff available to help you, and there would be shop to purchase items.

EMPLOYEE CAPABILITY.

There would be a list of services that can provide, and the times they are available. They could include medical, a gym instructor, religious services, financial services, dance instruction, and so on.

These are the Enterprise Environmental Factors INTERNAL to a cruise liner, but what about an organization?

Enterprise Environmental Factors INTERNAL to the organization

ORGANIZATIONAL CULTURE, STRUCTURE, AND GOVERNANCE.

E.g. vision, mission, values, beliefs, cultural norms, leadership style, hierarchy and authority relationships, organizational style, ethics, and code of conduct.

GEOGRAPHIC DISTRIBUTION OF FACILITIES AND RESOURCES.

E.g. factory locations, virtual teams, shared systems, and cloud computing.

INFRASTRUCTURE.

Eg. existing facilities, equipment, organizational telecommunications channels, information technology hardware, availability, and capacity.

INFORMATION TECHNOLOGY SOFTWARE.

E.g. scheduling software tools, configuration management systems, web interfaces to other online automated systems, and work authorization systems.

RESOURCE AVAILABILITY.

E.g. contracting and purchasing constraints, approved providers and subcontractors, and collaboration agreements.

EMPLOYEE CAPABILITY.

Eg. existing human resources expertise, skills, competencies, and specialized knowledge.

Now, let’s go be to our cruise liner and consider the Enterprise Environmental Factors EXTERNAL to the ship.

MARKETPLACE CONDITIONS.

E.g. the other competitor shipping companies you could have traveled with. The reputation of the shipping company that you choose. The name and logo of the company

SOCIAL AND CULTURAL INFLUENCES AND ISSUES.

E.g. political climate, codes of conduct, ethics, and perceptions of the countries you are traveling through.

LEGAL RESTRICTIONS.

E.g. Country or local laws and regulations. For example, you are not allowed to consume alcohol in some countries, in others, you may not bring certain foods ashore.

COMMERCIAL DATABASES.

E.g. Tables of average ticket prices and expected facilities, as well as published data on risk studies, safety reputation and so on.

ACADEMIC RESEARCH.

E.g. Online forums and review sites that rate and compare shipping companies, and their offerings.

GOVERNMENT OR INDUSTRY STANDARDS.

E.g. health and safety laws, employment laws -- such as anti-discrimination, minimum wage. Certifications for crew and equipment. Sea-worthiness certification for the ship. Laws relating to the storage, preparation, and serving of food.

FINANCIAL CONSIDERATIONS.

E.g. currency exchange rates, interest rates, inflation rates, tariffs, and geographic location.

PHYSICAL ENVIRONMENTAL ELEMENTS.

E.g. working conditions, weather, and constraints.

These are the Enterprise Environmental Factors EXTERNAL to a cruise liner, but what about an organization?

Enterprise Environmental Factors EXTERNAL to the organization:

MARKETPLACE CONDITIONS.

E.g. competitors, market share brand recognition, and trademarks.

SOCIAL AND CULTURAL INFLUENCES AND ISSUES.

E.g. political climate, codes of conduct, ethics, and perceptions.

LEGAL RESTRICTIONS.

Examples include country or local laws and regulations related to security, data protection, business conduct, employment, and procurement.

COMMERCIAL DATABASES.

E.g. benchmarking results, standardized cost estimating data, industry risk study information, and risk databases.

ACADEMIC RESEARCH.

E.g. industry studies, publications, and benchmarking results.

GOVERNMENT OR INDUSTRY STANDARDS.

Examples include regulatory agency regulations and standards related to products, production, environment, quality, and workmanship.

FINANCIAL CONSIDERATIONS.

E.g. currency exchange rates, interest rates, inflation rates, tariffs, and geographic location.

PHYSICAL ENVIRONMENTAL ELEMENTS.

E.g. working conditions, weather, and constraints.

That brings us to the end of Enterprise Environmental Factors

I hope my analogy with a cruise liner helped you find your sea-legs.

The next lesson is “2.2 Organisational Process Assets”

Please read the corresponding chapter in the PMBOK Guide before watching the video.

Organizational Process Assets

“Organizational Process Assets (OPAs) are the plans, processes, policies, procedures, and knowledge bases specific to and used by the performing organization. These assets influence the management of the project. Organizational Process Assets include any artifact, practice, or knowledge from any or all of the performing organizations involved in the project that can be used to execute or govern the project. The Organizational Process Assets also include the organization’s lessons learned from previous projects and historical information. Organizational Process Assets may include completed schedules, risk data, and earned value data.” (PMBOK Guide p39)

Please remember for the exam that the Organizational Process Assets include lessons learned and the historical data, such as the schedule, risk data, and earned value data. That is very important because, in most of the processes throughout the project, PMI suggests that you check the lessons learned and historical data, and now you know where to find it.

It’s also important to remember for the exam:

• Lessons learned from previous projects, is held in the Lessons Learned Repository.

• Lessons learned on the current project, is held in the Lessons Learned Register.

At the end of the project, the Lessons Learned Register is edited and finalized and then copied to the Lessons Learned Repository.

The next important point is:

All Organizational Process Assets are INTERNAL to the organization, and the project team members MAY be able to update them and add to them throughout the project.

However, and please note this carefully, it is usually only the knowledge bases -- *not* the processes, policies, and procedures -- that are changed. If you remember back to the Enterprise Environmental Factors; the project team can’t change them.

The Enterprise Environmental Factors are split into two categories:

1. Internal to the organization, and

2. External to the organization.

Organizational Process Assets are also split into two categories:

1. Processes, policies, and procedures; and

2. Organizational knowledge bases.

Generally, it is just the knowledge bases that are changed throughout the project.

E.g. financial performance information, lessons learned, performance metrics, and issues and defects, are continually updated throughout the project.

Processes, policies, and procedures are usually established by the (PMO) or management and can be updated only by following the appropriate organizational policies and processes.

Some organizations encourage the team to tailor templates, life cycles, and checklists for the project. These artifacts can be found in the organizational knowledge bases, within the Organizational Process Assets.

I’m just reading the following lists from the PMBOK Guide, as they are quite simple and don’t really need further explanation.

Category 1: PROCESSES, POLICIES, AND PROCEDURES

The organization’s processes and procedures for conducting project work include:

Initiating and Planning:

• Guidelines and criteria for tailoring the organization’s set of standard processes and procedures to satisfy the specific needs of the project;

• Specific organizational standards such as policies (e.g., human resources policies, health and safety policies, security and confidentiality policies, quality policies, procurement policies, and environmental policies);

• Product and project life cycles, and methods and procedures (e.g., project management methods, estimation metrics, process audits, improvement targets, checklists, and standardized process definitions for use in the organization);

• Templates (e.g., project management plans, project documents, project registers, report formats, contract templates, risk categories, risk statement templates, probability and impact definitions, probability and impact matrices, and stakeholder register templates); and

• Preapproved supplier lists and various types of contractual agreements (e.g., fixed-price, cost-reimbursable, and time and material contracts).

Executing, Monitoring, and Controlling:

• Change control procedures, including the steps by which performing organization standards, policies, plans, and procedures or any project documents will be modified, and how any changes will be approved and validated;

• Traceability matrices;

• Financial controls procedures (e.g., time reporting, required expenditure and disbursement reviews, accounting codes, and standard contract provisions);

• Issue and defect management procedures (e.g., defining an issue and defect controls, identifying and resolving issues and defects, and tracking action items);

• Resource availability control and assignment management;

• Organizational communication requirements (e.g., specific communication technology available, authorized communication media, record retention policies, video

• conferencing, collaborative tools, and security requirements);

• Procedures for prioritizing, approving, and issuing work authorizations;

• Templates (e.g., risk register, issue log, and changelog);

• Standardized guidelines, work instructions, proposal evaluation criteria, and performance measurement criteria; and

• Product, service, or result verification and validation procedures.

Closing:

• Project closure guidelines or requirements (e.g., final project audits, project evaluations, deliverable acceptance, contract closure, resource reassignment, and knowledge transfer to production and/or operations).

Category 2: ORGANIZATIONAL KNOWLEDGE REPOSITORIES

The organizational knowledge repositories for storing and retrieving information include:

• Configuration management knowledge repositories containing the versions of software and hardware components and baselines of all performing organization standards, policies, procedures, and any project documents;

• Financial data repositories containing information such as labor hours, incurred costs, budgets, and any project cost overruns;

• Historical information and lessons learned knowledge repositories (e.g., project records and documents, all project closure information and documentation, information regarding both the results of previous project selection decisions and previous project performance information, and information from risk management activities);

• Issue and defect management data repositories containing issue and defect status, control information, issue, and defect resolution, and action item results;

• Data repositories for metrics used to collect and make available measurement data on processes and products; and

• Project files from previous projects (e.g., scope, cost, schedule, and performance measurement baselines, project calendars, project schedule network diagrams, risk registers, risk reports, and stakeholder registers).

That brings us to the end of Organisational Process Assets

The next lesson is “2.3 Organizational Systems”

Please read the corresponding chapter in the PMBOK Guide before watching the video.

Organizational Systems

“Projects operate within the constraints imposed by the organization through their structure and governance framework.

To operate effectively and efficiently, the project manager needs to understand where responsibility, accountability, and authority reside within the organization. This understanding will help the project manager effectively use his or her power, influence, competence, leadership, and political capabilities to successfully complete the project.

The interaction of multiple factors within an individual organization creates a unique system that impacts the project operating in that system. The resulting organizational system determines the power, influence, interests, competence, and political capabilities of the people who are able to act within the system.

The system factors:

• Management elements,

• Governance frameworks, and

• Organizational structure types” (PMBOK Guide p42)

The first question we need to answer is: “What is a system?”

The Oxford Dictionary defines a “system” as:

“A set of things working together as parts of a mechanism or an interconnecting network: A complex whole.”

And the PMBOK defines a “system” as:

“a collection of various components that together can produce results not obtainable by the individual components alone.”

The principles related to systems are:

• Systems are dynamic,

• Systems can be optimized,

• System components can be optimized,

• Systems and their components cannot be optimized at the same time, and

• Systems are nonlinear in responsiveness (a change in the input does not produce a predictable change in the output).

• The system’s dynamics are defined by the interaction between the components based on the relationships and dependencies that exist between the components.

Typically, an organization’s management is responsible for its systems. They examine the optimization trade-offs between the components and the system in order to take the appropriate action in modifying the systems to achieve the best outcomes for the organization. These systems impact the organization’s projects and do, a project manager must consider these systems, as well as the organization’s governance framework when determining how to fulfill the project's objectives.

ORGANIZATIONAL GOVERNANCE FRAMEWORKS

“Recent PMI research reveals that governance refers to organizational or structural arrangements at all levels of an organization designed to determine and influence the behaviour of the organization’s members. This research suggests that the concept of governance is multi-dimensional and:

• Includes consideration of people, roles, structures, and policies; and

• Requires providing direction and oversight through data and feedback.” PMBOK Guide p43)

What is Governance?

It’s the framework within which an organization exercises its authority, and includes:

• Rules,

• Policies,

• Procedures,

• Norms,

• Relationships,

• Systems, and

• Processes.

This framework influences how:

• Objectives of the organization are set and achieved,

• The risk is monitored and assessed, and

• Performance is optimized.

GOVERNANCE OF PORTFOLIOS, PROGRAMS, AND PROJECTS

As a member of PMI, you can download a copy of many publications, free of charge. For this section you will find the following publication of value: “The Governance of Portfolios, Programs, and Projects: A Practice Guide”.

The practice guide describes four governance domains of alignment, risk, performance, and communications. And you can read more about it in the PMBOK Guide, page 44

MANAGEMENT ELEMENTS

These are the key functions or principles of general management in the organization and are allocated within the organization according to its governance framework and the organizational structure type selected.

They include:

• Division of work using specialized skills and availability to perform work;

• Authority was given to perform work;

• Responsibility to perform work appropriately assigned based on such attributes as skill and experience;

• The discipline of action (e.g., respect for authority, people, and rules);

• Unity of command (e.g., only one person gives orders for any action or activity to an individual);

• Unity of direction (e.g., one plan and one head for a group of activities with the same objective);

• General goals of the organization take precedence over individual goals;> Paid fairly for work performed;

• Optimal use of resources;

• Clear communication channels;

• Right materials to the right person for the right job at the right time;

• Fair and equal treatment of people in the workplace;

• Clear security of work positions;

• Safety of people in the workplace;

• Open contribution to planning and execution by each person; and

• Optimal morale.

The PMBOK Guide says on page 45

“Performance of these management elements are assigned to selected individuals within the organization. These individuals may perform the noted functions within various organizational structures. For example, in a hierarchical structure, there are horizontal and vertical levels within the organization. These hierarchical levels range from the line management level through to the executive management level. The responsibility, accountability, and authority assigned to the hierarchical level indicate how the individual may perform the noted function within that organizational structure.”

ORGANIZATIONAL STRUCTURE TYPES

Please read the list of factors in organization structure selection, and study Table 2-1 on page 47 of the PMBOK Guide. It compares several types of organizational structures and their influence on projects. There is no one-size-fits-all structure for any organization. The final structure for a given organization is unique due to the numerous variables to be considered.

PROJECT MANAGEMENT OFFICE

The PMBOK defines a project management office (PMO) as: “an organizational structure that standardizes the project-related governance processes and facilitates the sharing of resources, methodologies, tools, and techniques. The responsibilities of a PMO can range from providing project management support functions to the direct management of one or more projects. There are several types of PMOs in organizations. Each type varies in the degree of control and influence it has on projects within the organization, such as:

Supportive: Supportive PMOs provide a consultative role to projects by supplying templates, best practices, training, access to information, and lessons learned from other projects. This type of PMO serves as a project repository. The degree of control provided by the PMO is low.

Controlling: Controlling PMOs provide support and require compliance through various means. The degree of control provided by the PMO is moderate.

Compliance may involve:

• Adoption of project management frameworks or methodologies;

• Use of specific templates, forms, and tools; and

• Conformance to governance frameworks.

Directive: Directive PMOs take control of the projects by directly managing the projects. Project managers are assigned by and report to the PMO. The degree of control provided by the PMO is high.

The project management office may have organization-wide responsibility. It may play a role in supporting strategic alignment and delivering organizational value. The PMO integrates data and information from organizational strategic projects and evaluates how higher-level strategic objectives are being fulfilled. The PMO is the natural liaison between the organization’s portfolios, programs, projects, and the organizational measurement systems (e.g., balanced scorecard).” The PMO may manage programs of related projects or portfolios of unrelated projects and work, but always with a view to providing efficiencies and benefits of a common administration. A PMO may have the authority to act as an integral stakeholder and a key decision maker throughout the life of each project in order to keep it aligned with the business objectives.

The PMO may:

• Make recommendations,

• Lead knowledge transfer,

• Terminate projects, and

• Take other actions, as required.

A primary function of a PMO is to support project managers in a variety of ways, which may include:

• Managing shared resources across all projects administered by the PMO;

• Identifying and developing project management methodology, best practices, and standards;

• Coaching, mentoring, training, and oversight;

• Monitoring compliance with project management standards, policies, procedures, and templates by means of project audits;

• Developing and managing project policies, procedures, templates, and other shared documentation (organizational process assets); and

• Coordinating communication across projects.

That brings us to the end of Organizational Systems and also to the end of the Environments in which Projects Operate, module. The next module is “3.0 The Role of the Project Manager”. Please read the corresponding chapter in the PMBOK Guide before watching the video. So that you will know what you are meant to be doing.