Category: Project Management Professional (PMP)® Exam using A Guide to the Project Management Body of Knowledge (PMBOK® Guide)

PMP Training: Enterprise Environmental Factors

PMP® Exam Prep: Enterprise Environmental Factors

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Summary

"Enterprise Environmental Factors. Conditions, not under the immediate control of the team, that influence, constrain, or direct the project, program, or portfolio."

This definition is taken from the Glossary of Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) - Sixth Edition, Project Management Institute Inc., 2017.

If you were to be sent off to manage a project overseas, I bet you’d seriously consider your host country’s political situation, its security, geography, culture, and infrastructure in how you manage the different aspects of your project. What I must emphasize is this. First, these are but a few examples of enterprise environmental factors and second, enterprise environmental factors are an important influence on any project, not just international ones.

This lesson aims to describe different enterprise environmental factors, so you know what they are, and how they can affect your project.

Until Next Time,

Signature
Cornelius Fichtner, PMP, CSM
President, OSP International LLC

Transcript

Please note that the transcript is provided for promotional purposes only. Transcripts are not provided for other PrepCast lessons.

[00:00] [Introduction]

Hello, and welcome to this free lesson from The Project Management PrepCast™. I am Cornelius Fichtner and I am the lead instructor. Thank you for your interest in our Project Management Professional (PMP)® Exam training course.

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And now, on with the show.

[01:17] Lesson Overview

Hello and welcome back to The Project Management PrepCast™ where we factor everything that you need to know for your CAPM or PMP® Exam. I am instructor, Cornelius Fichtner.

In this lesson, we focus on Enterprise Environmental Factors or EEFs for short. Specifically, we provide an overview of what they are. This includes a comparison between EEFs and the Organizational Process Assets, the OPAs.

We discuss two types of EEFs namely internal and external factors. We then describe how EEFs are used as inputs and outputs, and finally we identify several examples for each process groups.

The influence of EEFs on different project management processes is quite vast. This lesson aims to provide you with the foundational knowledge of these EEFs so that you can build on it when you encounter EEFs again in future lessons, as well as on your projects.

[02:22} Follow Along on Pages: 38-39

EEFs are mentioned throughout the A Guide to the Project Management Body of Knowledge (PMBOK® Guide) but for this lesson, we focus on the material on pages 38 and 39. Grab your guide and open up those pages if you want to follow along.

[02:35] New Country

We begin with the hypothetical situation. Imagine you have just been informed that your next work assignment is to manage a project in a different country. I bet you would want to find out more than what’s just in the latest weather report. Apart from figuring out what to pack in to your luggage, more importantly, you need to know what to expect and how to best manage this new project.

You would want to get familiar with the culture, its geography, the political situation, the security, the infrastructure and so on. These are but a few examples of what are called Enterprise Environmental Factors or EEFs. B PMBOK® Guide y the way, these EEFs can affect any project not just international ones.

[03:23] Enterprise Environmental Factors

With this in mind, it’s time to look up the official definition of Enterprise Environmental Factors. The PMBOK® Guide formally describes EEFs as conditions not under the immediate control of the team that influenced constrain or direct the project, program or portfolio.

When we break down this definition, it’s very important to note that EEFs refer to conditions that are not under the immediate control of the team. Remember, this is your outside environment neither you nor the project team can readily change these factors or conditions. If you think about it, there are many environmental factors that surround a project and influence its success. You should think of the dynamics which not only influence constrain or direct your project but which in general your project team cannot control.

[04:26] EEFs vs OPAs

Closely related to EEFs are the Organizational Process Assets or OPAs. Coming from the definition, we know that EEFs are about the conditions or the state of the project environment as opposed to OPAs which are all about assets often documents or knowledge basis.

EEFs can be both internal or external whereas OPAs are internal to the organization only. EEFs and OPAs are both very common inputs to the project management processes. However, there are only very few processes with EEF updates when compared with OPAs which are frequently updated because our project changes them.

EEFs are not under the immediate control of the project team as this is about the environment. There is very little that the project team can do to influence it. Both EEFs and OPAs can and do influence our projects in many ways.

[05:27] Types of EEFs

There are visible an invisible boundaries which separate your project from the rest of your organization. And there are also boundaries that separate your organization from the rest of the world. Within your organization, you have internal enterprise environmental factors. But we also have external enterprise environmental factors relative to your organizations. These factors in combination influence you and your project but as we have already learned, you have very little or no influence over them.

[06:00] Internal Factors

What are examples of these internal factors? There are way too many to have a complete list but here are some of the most common ones.

Organizational culture, structure and governance. This would include for instance your company’s vision, mission and objectives. You need to consider the geographic distribution of facilities and resources. It affects your project team if they are all collocated or scattered across different regional offices.

What infrastructure is available for your team? For example, if we consider the infrastructure for communication, it is relevant to ask: Does everybody have access to the network? Can they access email even if they are out in the field? Would video conferencing be effective? Also, what type of software can you use? For instance, what project management tools are available? Can you submit time tracking reports through a web portal or do you need to send them via email? Resource availability within your organization and the capability of these resources is another important internal factor. The first thing we need to determine project resource availability is checking the resource pool within our organization.

[07:19] External Factors

And here are some external factors. Marketplace conditions refer to characteristics of a market such as the number of competitors, level of intensity of competitiveness and the market’s growth rate. We also need to be sensitive to social and cultural influences and issues. Some members of our team may have religious holidays that we need to respect and consider in our project schedule.

We are constrained by any legal restrictions that apply to our project. For example, data privacy laws. If our project gathers information about our customers, we need to store them in such a way that would be in accordance with data privacy laws in our given location. Perhaps there is even information that we are not allowed to collect. You may need to conform to specific government or industry standards. We have standards that relate to the environment, health and safety communications, regulations to ensure fair trade and competition to name just a few. We also have technological standards. For example, you must follow certain protocols for web design or web architecture.

There are also financial considerations. How the economy is doing affects your projects. Then there end clients. If the currency exchange rate is high then it maybe too expensive to import new material.

Finally, we need to take into account our physical environment. If we encounter extreme weather conditions such as typhoon or a snowstorm, perhaps we need to postpone construction or we may need to talk over the phone instead of attempting a face-to-face meeting with a client.

[09:00] How EEFs are Used

Now that you know what EEFs are, you might be wondering: Are they really that important? Do I need to pay that much attention to them? The answer is “yes”. EEFs are a frequent input to your project management processes. In fact, 42 out of all 49 processes in the PMBOK® Guide have EEFs as inputs. They serve as inputs in early processes. This is true for all initiating and most of the planning processes.

EEFs are also used as outputs of project management processes. However, due to the nature of EEFs not being under the immediate control of the team, this does not happen quite often. For example, you do not have changing of the political climate as an output of your project. In fact, only three processes have EEF updates as outputs. So yes, they are that important.

[10:04] Resource Management Processes

As an example, look at the six processes under the project resource management knowledge area. We have Plan resource management, Estimate active resources, Acquire resources, Develop team, Manage team and Control resources. Can you guess how many of these processes have EEFs as inputs? It’s five!

The first five of these six processes have EEFs as inputs. So this means, all resource management processes except Control resources. EEFs are quite commonly used during the start of the project when we are doing initiation and planning. It makes sense since at those initial stages, we make use of information from our environment and start building our plans.

For example when we acquire our resources, one factor that we consider is availability of resources. Who is available? Do they have the necessary experience and competency levels? Can we even afford to pay their rates? We look at EEFs to help us answer these questions.

How about EEFs as outputs? We know that EEFs are not under the immediate control of the project team. And so there are very few scenarios where we update EEFs as outputs of our processes. In fact, Resource Management is the only knowledge area where we can update EEFs.

Three of our processes that fall under the Executing process group have EEF update as outputs. These are Acquire resources, Develop team and Manage team. For example, once we have acquired the resources for our project, the rest of the organization should know that resources are no longer available on their own projects.

In other words, the organizational inventory of resources is an EEF and the output of the Acquire resource process is an update to the resources inventory. If the organization, say, has a pool of 10 developers and our project is using two of them for a long time, well then the resource inventory should be updated by us to reflect that there are currently only eight developers remaining in the pool. Makes sense, right?

[12:22] Initiating

At this point, I want to simulate a project and go through each of the five project management process groups with you to identify EEF examples for each. For our scenario, your boss, the project sponsor, wants you to lead a project to build out and transform existing officers for a new data center.

As the project manager, one of the first things to do is to develop a project charter. During this process, you might look at existing IT industry standards. You start asking questions like do we require a backup power? Are most of the organizations in our industry already using fiber optic network connections? We assess the overall conditions in the marketplace. Is the economy in a downturn? Does a high-end data center make sense when we know that our organization is undergoing cost-cutting measures? This market conditions would affect how a project is set up and its objectives.

[13:27] Planning

When we are developing our project management plan, we make use of EEFs to drill down into the planning details. We review existing management practices. If our organization requires that we only engage with preapproved suppliers then that should be included in our plan. For infrastructure, we assess the type of network connectivity in our data centers. It may set the minimum connection speed that we must achieve.

[13:57] Executing

During project execution, a significant amount of a project manager’s time is spent in managing communications. You look at EEFs such as established communication channels as a means of having effective communication with your entire team.

Some teams prefer face-to-face discussions. There are also some groups who prefer conference calls. Also depending on the geographical location of your project team, perhaps some engineers are working from remote locations. You identify the most effective means of communication for your project.

[14:31] Monitoring & Controlling

When we are monitoring and controlling, we once again turn to EEFs. We look at our project management information system, the PMIS, to help us understand how well we are performing. We need to see any schedule slippages. We want to monitor our costs.

We also need to be aware of and monitor stakeholder engagement. We need to be familiar with stakeholder risk thresholds. This will help us determine our strategies and responses should an issue or threat arise. We want to make sure that the stakeholders continue to be confident and supportive of the project.

[15:11] Closing

Fast forward to the end of your project or phase. At this time, late in the project or phase, all relevant enterprise environmental factors should already have been considered and likely have already impacted your project as it went through the other project management processes. Now here at the end of the project or phase, nothing more is to be considered in regards to the EEFs.

[15:39] Review Question

Here is a review question to reinforce a concept of an EEF. You are working with your team to develop a communications management plan. What internal EEF should you review? Should you review: (a) Communications management plan from a recent IT project. (b) stakeholder register templates; or is it maybe; (c) social media profiles of your project team; or (d) the regional virtual conference facilities.

As a hint, from a project perspective, there may be several correct answers but look closely for the type of answer the question is looking for. I’ll give you a few seconds to think about it then we are going to go through again the question and the answers in detail to identify the correct choice together.

Alright! Are you ready? Let’s look at this in detail. Reviewing the question, there are two key items that we need to look out for. First, we need to find an internal EEF and second, it has to be relevant for us to review in order to develop a communications management plan. So internal EEF that’s relevant for the communications management plan:

Answer A, normally as a project manager, we would want to review a communications management plan from a similar project to get our bearings. However, A, the communications management plan, that’s not an EEF. That’s a type of organizational process assets.

Same with B, the stakeholder register templates, these are organizational process assets.

C, the social media profile of our project team, well that’s external to the organization. But is it an EEF? Well for example, you should ask yourself would their LinkedIn profiles for example influence our project? Probably not.

So even without reading the last choice, we already know D is the answer because A is an OPA. B is an OPA. C is external. They are all wrong. Therefore, D is the correct answer.

Looking more closely at D, to develop a communications management plan, we need to know what means of communication are available to our project team. Internally, the availability of a virtual conference facility maybe even and each of our local offices is a relevant internal EEF for this activity. This is the only internal EEF that we have and so our analysis is correct. The Answer is D.

[18:33] Takeaways

As we take in the view of our environment, we can reflect on our takeaways from this lesson. Enterprise environmental factors are factors internal or external to the organization over which the project team has little or no control. EEFs may enhance or constrain the options that you have as a project manager.

When you examine your environment, you should understand any positive or negative influence these conditions may have on your project. It is for this reason that EEFs are inputs for all initiating and most planning processes. We consider EEFs when we create our plan and documents.

EEF updates on the other hand are seldom outputs of a process. In fact, there are only three project resource management processes that do that. Acquire resources, Develop team, and Manage team.

And this concludes our lesson for the Enterprise Environmental Factors.

Until next time.

[Music]

[End of presentation]

Please note that the transcript is provided for promotional purposes only. Transcripts are not provided for other PrepCast lessons.

OSP INTERNATIONAL LLC
OSP INTERNATIONAL LLC
Training for Project Management Professional (PMP)®, PMI Agile Certified Practitioner (PMI-ACP)®, and Certified Associate in Project Management (CAPM)®

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