The internal and external factors upon which the project management team has no control is referred to as Enterprise Environmental Factors.
The term is composed of three words and is self-explanatory.
Let’s dissect it for a clear understanding.
- Enterprise
- Environment
- Factors
Enterprise: What is an Enterprise?
Enterprise is a company, organization, an endeavor, a project.
It’s the ability or willingness to initiate a project or undertake a new venture.
Is a synonym for business, venture.
The term is very broad, ranging from a single person to multi-million businesses, ventures and Govt’s.
Examples of Enterprise:
- The blind man enterprise is to climb K2.
- A family or state-owned enterprise.
- A joint venture between Chinese and American companies.
Environment: What is an Environment?
Everything around us is the environment.
It’s the surroundings in which humans, animals, or plants operate.
It’s a synonym for habitat, nature, domain, ecosystem.
There are various facets to this term and can be used interchangeably.
Examples of Environment:
- The nomads of Himalayas lives in a hostile environment.
- The mobile development environment.
- The environment for regional and international conflicts.
Factors: What are Factors?
A factor is a condition, an element, that can bring certain effects or results.
It’s an expression, number, ratio, value.
It refers to an act.
Examples of Factors:
- David Beckham skills resulted in Manchester wins.
- E-commerce sales increased 500% with 4G.
- Global warning cause icebergs to melt in Antarctica.
A factor is a broad term and can be used from a human to maths, commerce, and science.
The reason for the above explanation is to broaden our horizon and help you think outside the box.
You may be doing projects in a very conducive environment, but it’s not always the case, therefore, it’s necessary to understand this topic.
What are Enterprise Environmental Factors (EEF)?
Now, that we understand the definition of Enterprise, Environment, and Factors, we can easily define Enterprise Environmental Factors and safely identify them.
Enterprise Environmental Factors are all the conditions that can alter the results of the project.
These results can be favorable or non-favorable, good or bad.
These are all the factors that are not in control of the project team.
EEF can both be internal or external to the project.
EEF can bring certain effects that are not aligned with the strategic objective of the organization.
EEF can limit or enhance project management team capability or capacity, thus bringing a positive or negative effect on the project.
Enterprise environmental factors examples
Below are some of the internal and external factors or conditions that can impact organizational performance and growth.
Some of the external factors affecting the projects are:
- Political situation.
- Economic Indicators.
- Mother nature, climate.
- Regulatory authorities.
Some of the internal factors impacting the project outcomes are:
- Personal, company, or organizational financial situation.
- Stakeholder’s influence and relationships.
- Company’s culture.
Example: There may be a cricket match between Pakistan vs India or England vs Australia.
Imagine the preparation, players fitness, team availability, sponsors, and the list goes on.
Tickets are sold and crowd pulled in. Suddenly rain starts to pour in and everything is washed away.
Enterprise Environmental Factors and Project Management
EEF is an important concept in project management, as it has a significant influence on the outcome of the project.
It’s the ultimate responsibility of a project manager to identify and document EEF.
However, project management team and stakeholders are equally responsible to keep EEF in perspective before and during the project.
Enterprise Environmental Factors and PMBOK
Enterprise Environmental Factors are an input and output to the majority of the planning process group, executing, and other process groups.
EEF and Organizational Process Assets are seen as an input and updated document in many processes.
Enterprise Environmental Factors and PMP
Many aspirants are so caught up in ITTO’s, that they forget to concentrate on the big picture of the exam.
Power Tip:
If you are appearing for PMP exam, you do not need to know or memorize EEF’s as an input or output to processes.
Enterprise Environmental Factors and CaPM
Since PMBOK is all about ITTO’s, and EEF’s are an input/output to many processes. You may see a few questions in the exam.
Power Tip:
EEF’s are an input/output and not a tool.
EEF’s are an input to almost all planning processes.
The PMBOK 6th Edition has defined some of the Internal and external Enterprise Environmental Factors that can limit or enhance project team options.
Internal Enterprise Environmental Factors:
The following EEFs are internal to the organization:
Organizational culture, structure, and governance:
Every organization is unique in its own way, and so the projects are influenced by organizational culture, style, norms, and ethics.
Top management and leadership roles, responsibilities, relationships, authority, and organizational values, mission, and vision are some of the factors.
Geographic distribution of facilities and resources:
These include; The physical and virtual presence of the organization facilities and resources, both in terms of human, equipment, technology, and machinery.
Example: A famous company may have a physical factory in China, while they have virtual teams across the world using cloud technology to collaborate.
Infrastructure:
These factors are organizational equipment, facilities, and presence.
I’ll include online and offline availability.
Example: A construction company may have an office in New York, London, and other major cities and their online services are 24/7.
Information technology software:
These factors refer to how the work of the project is scheduled and authorized, and what kind of work authorization system is in place.
Other software tools and systems like scheduling, configuration management, and web interfaces to other online automated systems.
Resource availability:
This refers to the contracts and purchasing agreements your organization has with other teams, manufacturers, contractors, and suppliers.
Employee capability:
This factor refers to the current human resource or staff skills, knowledge, and expertise in a specific area.
Example: Google has the best-skilled engineers, with a deep understanding of online search.
External Enterprise Environmental Factors:
The following EEFs are external to the organization.
Marketplace conditions:
This factor refers to the positioning of the organization in the market, supply and demand, brand awareness and recognition, trademarks, patents, copyrights, competitors and market share.
Example: Buying a Microsoft or Apple laptop.
Social and cultural influences and issues:
This factor refers to the influences on an organization or its projects has by factors like political climate, codes of conduct etc.
Legal restrictions:
This concerns the laws and regulations of the county, province, or country regarding data protection and security.
Hiring and firing employee and procurement of goods and services.
Commercial databases:
This factor refers to industry-specific information and standards data for cost estimating, bench-marking, and risk.
Example: There are many organizations that study the market and generate reports, information, and analysis.
e.g: A state may issue bench-marking report for construction of a commercial plaza.
Government or industry standards:
These factors could be regulatory bodies, authorities, and product/service quality, and standards.
Example: Achieving CMMI or ISO standards are a requirement in certain businesses.
A lawyer or doctor needs to get certain credentials or license to practice.
Financial considerations:
This concerns the geographical location of the organization and it’s currency rates, including other factors as the tariff, interest, and inflation rates.
Physical environmental elements:
This refers to the environmental conditions of working, and the constraints of weather and other natural and artificial environment.
Summary:
Enterprise Environmental Factors (EEF) can influence the schedule, cost, scope, and other constraints of the project.
These factors influence the impact and outcome of a project and a business.
Therefore, it is for the project manager (along with project management team and stakeholders) to account for these factors and assess its impact.
EEF can both be internal and external and is normally out of control of the project team.
According to the above explanation and definition; There are varied sources of EEF’s that needs to be considered before initiating a new venture, business or project.
They can have a positive or negative effect on the outcome of the project.
Over to you!
Let me know your thoughts in the comments below.
