Chapter 12: Environmental Factors and Processes Assets

In the previous chapter, we took a look at how the organizational structure can affect a project and how it affects the life of a Project Manager. In this chapter, we are going to take a look at the two other things that would affect us (we are the project managers, right?)

1. Environmental Factors
2. Process Assets

So, lets get started!!!

Identifying Environmental Factors and Process Assets

While exploring the environment of the performing organization, you should also identify the environmental factors and the process assets that will influence your project. Some of these assets and factors can be used to help the project; others may have a negative influence. As project managers it is our responsibility to identify them and ensure that we use them in the best interest of the project and mitigate any and all risks they might pose to the success of our baby (The Project)

Enterprise Environmental Factors

The enterprise environmental factors are related to the environment internal or external to the performing organizations and can potentially impact the project. They may originate from within the performing organization, from any external organization participating in the project, or from both. These factors may have positive or negative influence on the project, and some of these factors may give rise to constraints for the project.

Organizational environmental factors include the following:

Culture and structure

1. These refer to the culture and type of structure of the performing organization.
Processes and standards:
1. The organization may have specific processes in place do certain things in certain ways.
2. There may be government and industry standards to follow, such as legal requirements, product standards, and quality standards relevant to the project.
3. Personnel administration information, such as guidelines for hiring, firing, and performance reviews.

Infrastructure and resources:

1. Facilities and equipment to do the project
2. Project management information systems, such as software tools for scheduling tasks and meetings
3. Human resources currently available in the organization, such as skills and expertise
4. Commercial databases, such as standardized cost estimating data and risk databases
5. Work authorization system of the organization, because the project needs to be authorized
6. Communication channels and tools available in the organization, such as email systems

Internal and external conditions:

1. Risk tolerances of the project stakeholders
2. Marketplace conditions relevant to the project
3. Political climate

Note that the environmental factors can be internal to the performing organization, such as the organization’s culture, or external to the organization, such as market conditions.

Organizational Process Assets

These are the processes or process-related assets from any of the organizations involved in the project that can be used to help the project succeed. Some processes might look like an overhead or overkill but as responsible project managers, we are supposed to follow them religiously, period…

The organizational process assets are typically grouped into two categories:

1. Processes and procedures for conducting work, and
2. A corporate knowledge base for storing and retrieving information.

For example, the performing organization might have its own guidelines, policies, and procedures, whose effect on the project must be considered while developing the project charter and other project documents that will follow. Another example of an organization’s process assets are the knowledge and learning base acquired from previous projects.

Let us now take a detailed look at these two things.

Processes and procedures

This category includes processes, procedures, guidelines, and requirements as described in the following:

• Standardized processes and procedures. Examples are organizational-level policies, such as health and safety policies, ethics policies, project management policies, and quality policies and procedures, such as quality checklists and auditing processes.
• Standard guidelines and criteria. Examples are:
      o Project closure guidelines, project acceptance criteria, proposal evaluation criteria, performance measurement criteria, and so on
      o Guidelines and criteria for tailoring the standardized organizational processes for the purposes of the project
• Templates. Examples are the templates to support some project management tasks, such as risk management, project schedule network diagrams, and work breakdown structure.
• Requirements. Examples are:
      o Communication requirements, hiring requirements, and safety and security requirements
      o Guidelines and requirements for project closures, such as final mandatory project audits and product acceptance criteria

You need to follow these guidelines and accommodate the requirements while working out the details of the project management processes that you will perform. As you are a part of the organization you need to be aware of them in the first place and include them in all your plans to ensure that you do not violate them. Processes are put in place for a reason and as a leader who leads by example, we must use them properly to motivate our team members to follow rules as well.

Knowledge base

This category includes databases, which allow you to store information and to retrieve the stored information when needed. Some examples are:

• Project files. The documents and files related to the project, such as the project charter and the scope statement.
• Historical information and lessons learned. Archives of files from previous projects and lessons learned from them.
• Issue and defect management. Database that allows you to manage issues and defects, such as to log, control, and resolve an issue or defect. You can also find the status of the issue or the defect from this database.
• Financial database. The financial information related to the project, such as budget, work hours, and cost overruns.
• Configuration management database. This contains the change history: different versions and baselines for the company standards and policies and for the archived project documents.

We are all either project managers or people who aspire to be good and efficient project managers. Any project manager would have to interact with two neighbors with whom we share our life as a manager. They are: Program and Portfolio. We will be looking at them next.

Previous: Understanding the Organizational Structure

Next: Relationship between Project, Program and Portfolio

Chapter 10: Organizational Influences on Projects

In the previous chapters, we saw about the various stakeholders in a project and also about the most influential & important stakeholder of them all, you. In this chapter, we are going to take a look at the impact of organizational culture on a project and its operations.

So, lets get started!!!

Can an Organizations Culture affect a Projects Outcome?

A project is typically performed inside a company called the performing organization, which creates an environment for the project called the project environment. The projects are influenced by the project environment, which is shaped by many elements, such as organizational culture, organizational structure, enterprise environmental factors, organizational process assets, and the maturity of the organization.

To summarize, Yes the organizational environment within which a project is being executed can have a significant impact on the outcome of the project.

Understanding the Organizational Culture

Each organization often develops its own unique culture, which depends on many factors, such as the application area of the organization and the general management philosophy implemented in the organization.

The organizational culture includes the following elements:

1. Work environment - The organizational culture is reflected by work ethic and work hours. For example, do the employees work strictly from 8:00 AM to 5:00 PM, or is the timing flexible so that employees can change their work timings to cater to some of their personal commitments. Ex: If a persons wife is pregnant and is experiencing morning sickness, he would have to support his wife atleast for an hour or so in the morning and hence he may not be able to make it to work @ 8:00 AM sharp. Would the organization be flexible enough to allow him to come in late say 9:30 AM and let him work till 6:30 to compensate for it?
2. Management style - Organizational culture also reflects authority relationships. Do the managers manage by authority or by leadership? How much feedback is taken from the employees in making management decisions? How do the employees view the authority of the management?
3. Policies - The organizational policies, methods, and procedures also reflect the organizational culture.
4. Values and vision - A significant part of organizational culture lives in the set of values, norms, beliefs, and expectations shared within the organization. This may be impacted by the organization’s mission and vision. For example, a nonprofit organization will have different values than a for-profit organization. Furthermore, one organization may encourage an entrepreneurial approach while another organization may be rigidly hierarchical and take an authoritarian approach to making decisions about what to do and what not to do.

At the beginning of this chapter, I had said that an organizations culture can have a significant impact on a project. Now that we know what is part of an organizations culture, let us see how an organizations culture can influence an project.

Organizational culture influences multiple aspects of a project. Some are:

1. Project selection - The organizational culture will creep into the selection criteria for projects and programs. For example, a rigidly hierarchical and authoritarian organization may not be very adaptive to programs and projects with high risk.
2. Project management style - The project manager should adapt the management style to the organizational culture. For example, an authoritarian style may run into problems in an entrepreneurial organization with a participative culture.
3. Team performance assessments - While making the team performance assessment, the project manager should keep in mind the established norms and expectations within the organization.
4. Project policies and procedures - The project policies and procedures will be influenced by the organizational policies and procedures because both should be consistent with each other.

The culture of an organization is greatly influenced by its structure.

From the perspective of a project, there are two kinds of organizations:
1. project-based and
2. non-project-based.

The project-based organizations fall into two subcategories, those that derive their revenue primarily from performing projects for others and those that do in-house projects to deliver products or services for customers. Project-based organizations are well aware of the importance of project management and generally have systems to support project management. Non-project-based organizations generally have a low appreciation for and understanding of the importance of project management and often lack systems to support project management.

The point here is that the type of organization and the organizational structure have a great influence on how the projects will be managed inside the organization. This is what we are going to learn in the next chapter.

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Next: Understanding the Organizational Structure