Two of the most common inputs to the PMBOK® Guide processes are enterprise environmental factors and organizational process assets. No offence but I think that the 100 global practitioner/volunteers on the core team who took the initiative to contribute content for the PMBOK could do a better job of explaining what the enterprise environmental factors are.
According to PMBOK® Guide the Enterprise environmental factors are internal and external environmental factors that can influence a project’s success, including:
- Organizational culture
- Organizational structure
- Internal and external political climate
- Existing human resources
- Available capital resources
- Regulatory environment
- Financial and market conditions
Ok, great! Now I get it. That was eye-popping! Thanks guys! 🙏🙏🙏
Before I go on, I just need to mention that I actually searched for “eye-opening” synonyms and I found “eye-popping” to be the most appropriate.
So, yes, I found the PMBOK’s interpretation of environmental factors incomplete — not to say boring. Again, my apologies. Really. 🙏I thought I can do a better job at explaining what the enviromental factors are and how they can be useful. You only need one minute so please go on reading!
Project managers need to take into account factors such as the political, social and economic environment which can affect a project’s outcome.
PESTLE analysis, which is sometimes referred as PEST analysis, is a concept in marketing principles. It is a mnemonic which in its expanded form denotes P for Political, E for Economic, S for Social, T for Technological, L for Legal and E for Environmental.
So, yes, because of PESTLE, these factors we are talking about can be classified into overlapping categories. So for example, political factors pertain organisational laws (e.g. copyright, patent, trademark) and regulations (e.g. system safety, recycling, health) that influence system requirements.
What is important to understand is that PESTLE is similar to risk analysis. So, you have questions that you need answers for, and then, when you do realise that, the whole “Enterprise environmental factors” chapter of the PMBOK suddenly becomes relevant to what a Project Manager needs to know to provide value to his/her work.
Examples of questions can be:
- What is the political situation of the country and how can it affect the industry?
- What are the prevalent economic factors?
- How much importance does culture has in the market and what are its determinants?
- What technological innovations are likely to pop up and affect the market structure?
- Are there any current legislations that regulate the industry or can there be any change in the legislations for the industry?
- What are the environmental concerns for the industry?
What’s left is to provide you with some links that you will find useful.
Back to Basics (Part 9): Project Environment Analysis with PESTLE
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