Part 5: Business Environment
Business Environment
Plan and Manage Project Compliance
Most projects have aspects of their solutions that are subject to legal or regulatory constraints, such as the requirements for compliance must be identified, tracked, and managed throughout the project. These can include requirements for specific practices, privacy laws, and handling of sensitive information.
Risk Register
Used to track and manage risks during the project. Some of the risks that need to be tracked relate to compliance with legal and regulatory requirements and should include the identified risk, risk owner, impact if the risk is realized, and risk responses. Create testing and validation plans to ensure that the project’s deliverables meet compliance requirements.
Compliance categories classification (Environmental risk, social responsibility, quality, workplace health and safety, corrupt practices).
Execution reports
Project managers regularly provide an execution report related to project activities, deliverable status, and overall progress. Important to include the status of risks and risk management including compliance-related risk, actions taken to manage the risks, testing and validation activities, audits, or other actions to verify deliverable compliance with any legal or regulatory constraint.
Nonfunctional requirements such as availability, capacity, continuity, and security.
Identify the necessary stakeholders to sign -off and approve the deliverables.
Tolerance
Quantified description of acceptable variation for a quality requirement. When establishing control for a project, it is often helpful to provide tolerance levels for the project manager to effectively manage certain issues and control the project without having to escalate every issue to the project board for review and approval. Tolerance may include budget, time, quality, and nonfunctional requirements.
Escalation procedures
When a noncompliance issue is identified, the next step is to determine whether it is within the tolerance level of the project manager. If it is within permitted tolerance, the PM and the team propose changes to resolve the variance, if it exceeds the tolerance allocated to the PM, the issue must be escalated. The procedures for such an escalation should be identified during project and risk planning.
Evaluate and Deliver Project Benefits and Value
Components of business value include employee knowledge, channel partner value, and customer value.
Benefit-cost analysis
A systematic approach to estimating the strengths and weaknesses of alternatives is used to determine options that provide the best approach to achieve benefits while preserving savings. Used to compare potential projects to determine which one to authorize, select the alternative whose benefits outweigh its costs by the most amount. Besides cost-benefit analysis, Multicriteria decision-making is used to evaluate several criteria when discussing alternatives that impact project or product quality.
Benefits Management Plan
How and when the benefits of the project will be delivered? Describe target benefits (financial value), strategic alignment (how will the project benefit align to the business strategies of the organization, timeframe for realizing benefits (short-term, long-term ongoing), benefits owner (accountable person to monitor, record and report realized benefits), metrics, and risks.
The financial feasibility study is performed by product owners to determine the profitability of the project, the analysis is reviewed by project sponsors. The metrics used to forecast the financial feasibility of a scheme include ROI, NPV (higher NPV is better), IRR, and Payback period. Decision tree analysis (EMV= Probability * Impact).
Support Organizational Change (According to PMP)
Organizations are companies or governmental departments that accomplish a purpose such as providing health care to patients. Every organization develops a unique culture and style that represents its cultural norm and affects how projects are performed. For example, flex hours versus an 8-to-5 work day can directly affect how a project manager schedules resources and how the team interacts. Project managers should understand that cultures have a strong influence on a project's ability to meet its objectives. He should know which individuals in the organization are the decision makers or influencers and work with them to increase the probability of the project's success. When working in multinational companies or a new country the PM should evaluate the environmental and regulatory factors and identify high-level risks and assumptions.
Evaluate and address external business environment changes for impact on scope
Types of Business Environment
Internal environment
Man, money, marketing, machinery, management structure, miscellaneous factor
External environment
Economic, geographic, social, technological, political, cultural.
Change Control Boards (CCB)
The PM should use a change management plan to track and manage requested changes. When a change to the project is requested, the usual approach is to form a change control board. The purpose of the CCB is to represent key stakeholders and assess the change in terms of cost, risk, and value impact. And then make recommendations for whether the change should be approved. Based on the scope of the proposed change, the approver may be the project manager if the scope of the change is within the agreed tolerance or it may need to be escalated to the project board or sponsor if it is outside the tolerance thresholds.
Configuration Management System
Collection of procedures used to track project artifacts and monitor and control changes to these artifacts. It is intended to maintain a change history of all components being tracked. This enables us to effectively maintain control of the versions of all components.
Governance Steering Committee
An important part of project initiation and planning is defining the steering committee. They are responsible for clarifying the project charter and objectives and allocating the project manager, the resources, people, and money, to carry out and deliver on the project’s objectives.
Building adaptability (A) and resiliency (B) into the organization’s and project team’s approaches helps the project accommodate change, recover from setbacks, and advance the work of the project. Adaptability refers to the ability to respond to changing conditions. Resiliency consists of two complementary traits: the ability to absorb impacts and the ability to recover quickly from a setback or failure. Building adaptability and resiliency in a project keeps project teams focused on the desired outcome when internal and external factors change, and it helps them recover from setbacks. These characteristics also help project teams learn and improve so that they can quickly recover from failures or setbacks and continue making progress toward delivering value
Stay tuned for Part 5, All The Luck with your PMI-PMP Journey!