- Understanding Enterprise Environmental Factors
Written by Mark Romanelli on June 21, 2022 https://www.projecttimes.com/articles/understanding-enterprise-environmental-factors/
Critical Elements In Strategic Project Management
As project managers, we can’t control everything. In every project there are factors beyond our control that can have both large and small effects on the outcome of a project. Market demands, consumer tastes, corporate culture, even the weather, are all factors that can make a difference between project success and project failure. While these are things we can’t change, we still need to be aware of the elements within our operating environment and what they mean to the projects we manage.
Enterprise Environmental Factors
Enterprise Environmental Factors (EEF’s) are conditions, not under the immediate control of the project team, that influence, constrain, or direct the project, program, or portfolio (Project Management Institute, 2021). These are things that are beyond the control of the project team, and often the organization in which the project is taking place, that can have effects on the outcome of the project. Projects take place in settings that can have effects, both positive and negative, on them. Those factors can exist both inside of the company initiating the project as well as outside of it. An organization and project team need to identify and consider those factors in order to increase the chances of project success (Arif-Ud-Din, 2020).
Strategic management is the systematic analysis of the factors associated with the external and internal environments of an organization to provide the basis for maintaining optimum management practices (Thompson, 2010). It means understanding what is going on both inside and outside of an organization in order to make better plans and decisions about what to do. Simply put, strategy is deciding what to do to achieve your goals given what’s going on in the environment around you. Strategic project management means the same thing; making decisions about actions to take in order to achieve your project goals and objectives in consideration of the environment in which the project is taking place.
Just as in general business activities, the operating environment of a project includes both the internal and external environments. The internal environment includes everything within the organization; organizational structure, procedures, company culture, and so on. The external environment is the environment outside of the organization and includes everything from customer tastes to legal restrictions, even the physical environment.
In summary, EEF’s are environmental factors, both internal and external, outside of the control of a project team that can have both positive and negative impacts on project results. The chances of successfully completing a project are increased by strategically considering EEF’s in managing a project.
Addressing EEF’s In Projects
Because every project has at least some EEF’s affecting the outcome, every project manager needs to deal with and address those factors in each project that they manage. All of the major project management methodologies and approaches have their own prescribed steps for addressing environmental factors, but when looked at as a whole, most of them recommend taking the same three steps: 1) Identifying the factors, 2) assessing them, and 3) planning for them. Based on experience and best practices, this is also the recommended approach to take in addressing the issue of EFF’s in managing projects. The overall goal is to strive for having a clear understanding of the project environment in order to be better able to pursue, and achieve, the objectives of the project.