Welcome to my PMP exam preparation training series today we’ll discuss the environment in which projects operates this includes enterprise environmental factors which are either internal or external organizational process assets organizational governance organizational structures and then PMO’s and the different types of PMO’s alright so let’s go ahead and look at enterprise environmental factors in this one what you see is that there are two types of factors that would influence your project one which is the one on the left are the enterprise environmental factors and those are made of either internal factors or external ones now we’ll expand on those in a little bit the other item that would affect or influence your project will be the organizational process assets and this is typically internal because that’s the organization’s own process assets so when we say process when we say an asset right an asset is something that the organization has it owns it’s able to use it can utilize it for its own benefit so if I had three buildings then these are my assets right if I have stock investments these are my assets for an organization they have assets they have capital assets and so on and you know we say people are the organization’s assets or employees are the assets and they have you know actual physical assets and they have cash liquid cash and other forms of monies and so we refer to these things as assets but here what we’re discussing what we’re discussing is organizational process assets so these are the assets that have to do with processes so things that are developed or processes that are developed to a point where the organization is able to use it and reuse it as often as it would like and be able to benefit from that and on the right here you’ll see corporate knowledge base which is one of those assuming an organization has been around for a long time if it has been collecting you know information pertaining to its projects and operations historical data and so on this is going to be very valuable going forward in how and they can use it in operating their business so corporate knowledge base is considered a process asset because there’s information in there that simplifies its processes going forward along that along with that we have the processes policies and procedures if we compare two organizations one that is mature and the other one that isn’t you will find that the mature organization typically has well-developed policies and procedures for everything they do whereas the immature organization or very young organization is still trying to figure it out so we can see that the mature organization has assets when it comes to processes that it can use in running its business let’s take a look at some of the examples that are considered enterprise environmental factors to an organization let’s look at some of the internal ones right let’s start with this one here the organizational culture structure and governance an organization can have a culture of risk-taking or an organization of risk-averse meaning they like to take chances or they don’t right risk seeking they like to take chances risk-averse they don’t like to take chances the culture of the organization could be you know based on the age group of the people or the nature of the work they do the style in which they work the office setup that they have you know we I don’t know if you’ve watched you know the things called the intern or the internship it’s about Google essentially if you and it shows to people that get a job with Google and when they go in there they’re surprised shocked by how Google works that’s a lot of young people that have very unconventional ways of working not the usual desk job that you would see out there so we say they have a different culture there and how they do their work right and then there’s also things such as you know how well the organization communicates some organizations don’t communicate well and so we can say there is no culture of communication and sometimes it’s about excuse me so we say there is no culture of communication sometimes it’s about trust you know there’s no trust in the organization and other times it’s about you know how many people are staying within with the company and how many are leaving how fast are people leaving so you get a general sense for the you know the feelings that one would get if you walk into an organization what do you sense when you walk into this organization how do they think how do they behave that’s the culture of the organization then you there’s the other point which is the structure and governance structure you know you’re looking at you know different departments management style which is also overlapping with governance is the organization run as departments with heads of departments making decisions is that a flat organization what type of a structure does the organization have that’s going to have an effect on how well you can run your project the culture of the organization is going to have an effect on how well you run your project if they don’t have any trust then you know obviously the PM would have a very hard time going around talking to different stakeholders and collecting requirements the last piece there are governance how how well is the organization in control do they have procedures and policies for everything do they maintain you know real-time or accurate data do they do audits so that tells you the you know the management oversight culture of the organization that’s what we refer to as governance all right moving to the right geographic distribution and facilities and resources an organization can be all in one spot where the whole company is there or it could be spread into different branches or different countries and and so that distribution whether it’s in one or multiple locations is going to affect how well you’re able to engage the different stakeholders and collect all the requirements as needed the infrastructure of the organization also is important think about IT infrastructure and network infrastructure you know if if these things are there if they have knowledge bases and so on which takes us to information technology software if they have knowledge databases and if they’ve been saving a lot of information we can say they have a strong they have a strong data orientation or they have a strong infrastructure when it comes to data and information but you know just the if you just think from the plain side of things just an IT infrastructure some organizations lack on almost all of that they have a Wi-Fi connection and they operate with that some have servers and they hold information and they do you know backups and they have different systems for document management different systems for let’s say approvals and contract management and that would be that infrastructure for the organization having these things have a lot having a lot of infrastructure that is in place and usable is going to help the project manager because the project is going to require a review of current state or requirements or processes or procedures and the infrastructure is going to be very helpful in that regard resource availability is another thing if you were doing the whole project by yourself it’s going to take you a long time depending on the size of the project but if you have available resources with the right skill sets people have designated and functions that you can go to and ask questions then that’s going to help you in putting together your project plans employee capability yeah I think that one’s already covered that was the skillset of the of the team in the organization when you go to an organization that has designated let’s say quality specialist another one that does for example the let’s say the financial analysis you have bas you have PM’s you have a technical specialist and you know the technology that you’re working on then you have engineers and so on you feel a lot more confident in taking on the project so these are the internal enterprise environmental factors that would affect your project now let’s take a look at external points that would affect your project starting with you know the outside we look at the marketplace is the market in your favor our things is the economy doing well is there a high demand for the product that you’re working on are there suppliers that support that specific market so that would be one thing you want to look at and then social cultural influences and issues depending on which country you’re in there are laws and there are there there are rules and there are behavioral aspects that you need to consider so this is going to affect how you engage your stakeholders in a specific project you also need to consider for your project legal implications of anything that you do so you need to understand the law you need to know what is allowed what is not allowed and whether some things can be restricted other things to look at commercial databases are there is there a database or is there information that is recorded some anywhere that would help you in you know in planning out your project in coming up with estimates for your project academic research is also similar to having commercial databases this would be you know are their published articles or white papers or books or studies that have been done with regards to what you’re covering inside this one project the the other point here would be the industry standards or the government standards that are mandated in every country there are laws and standards that you need to abide by and if you’re running a project they’re running a project for example in Japan would have a different flavor than running it in the US or maybe in the Middle East because each of these areas have its own rules policies and standards that you need to stick to financial considerations this would be whether you’re able to obtain loans or any kind of financial support for your per for your program of project and so definitely that’s going to have an effect on your budgets or cash flow that you need to support the funding of your project finally physical environmental elements this would be the infrastructure of the country or the vicinity in which a project is being run and that could make things easier or more complicated for you as you run your project moving forward let’s take a look at organizational process assets and there’s a few items that fall into what we consider assets that the organization uses for processes number one you can consider well developed and pre used procedures these are things that are documented and everybody is able to follow and use so that if it’s project related and most of the time you’re going to see that that’s developed by a project management office so processes and procedures that are related to how we do project management so for example how do you gather requirements where do you record the requirements so templates also fall into this category do we have well-developed templates that people on the project team can use is there a document or form or guideline for how we do a risk manager if that’s the case then that’s going to make it easier also we have to look at whether we have policies that state that you know certain actions can be done or others can’t be done or that there is a specific way for us to do any type of activities policies that are well developed and supported by procedures and processes can be very beneficial to a project manager because now you would feel that you’re working in a very well controlled environment rather than a chaotic one organizational knowledge databases extremely beneficial when you’re trying to put together requirements or estimates for your project so these databases you’re supposed to contribute to those as you work on your project and the project team is supposed to be doing lessons learned a long you know it may be at the end of every phase and then contributing to that knowledge base so that you know our project estimates on plan and plans would be more accurate as we move forward I have here a list of examples of what we would consider organizational process assets including you know templates as I mentioned examples from previous project tools software tools that have been pre-configured and we can use them again data basis of information historical information or lessons learned processes that are well-defined issue management procedures change management risk management procedures all of these things are considered organizational process assets organizational knowledge repositories are also considered organizational process assets and these can include configuration management knowledge bases financial data historical information lessons learned these points were previously listed data repositories for metrics so KPIs you know that have been used previously and successes you know versus these KPIs project files from previous projects issues and defects that have been you know documented and we can go back and look at them this is going to prove to be very valuable for a project manager you know as opposed to having nothing to work with next let’s discuss organizational systems what a system is is a collection of various pieces of components that together can produce results you don’t get if you were to use just one component so for example procedures processes policies resources infrastructure all of these are considered the components right of a system and the components when are when they’re integrated and managed in a in a specific manner can produce some result or outcome so we say that the outcome is the outcome of the whole system but the components are the ones that are contributing to that one system these components themselves as separate pieces can be optimized improved so for example your resources are one component you can optimize those your IT systems or document management systems could be another component and that can be optimized and once you do that it has an effect on the overall system so the system is the outcome of its own components and by optimizing the components then the system is improved now let’s translate this to project management we can see an organization has an excellent project management system and that may include the certified professionals project management professionals that they have it could include a well-developed methodology at PMO maybe guidelines rules policies some software like Microsoft Project or Primavera all of these are components of a project management system we can enhance one piece one component like the resources or maybe enhance the Microsoft project system or Primavera system I’m saying system but I what I meant is the software Primavera software system that we use and that would enhance the project management system let’s take a look at this what you see at the top you see at the top is the PM system at the highest level right and below that you have Primavera methodology a project management methodologies or less correct project management methodology and the PM’s themselves if I was to improve the capabilities of the PM’s it is going to have a direct impact on my project management system if the methodology is enhanced it will also have an effect on the project management system if the Primavera software system that we’re using is configured in a more efficient way then that’s going to have an effect on our project management system so the system project management system is the output that we get from the combination or integration of all of these components that you see here now let’s look at organizational governance frameworks project governance refers to framework functions and processes that guide the project management activities in order to create the product that we’re aiming for the product service or result for which we’re running the project and that includes several things such as people their roles their structure the structure of the organization the policies that we have and the oversight process and management process that we have in place so it includes the rules the policies the procedures and what is considered normal in the organization as behaviors and activities the processes we use the systems that are in place and the relationships that we have within the team and between the team and its own that’s its governing body or shareholders and with external parties like customers and suppliers when an organization thinks about putting together an organizational structure they consider several aspects that would help them in how well they can govern that organization what you see here is a list of different items or different factors that they will consider in putting together the structure that suits them best so for example cost limited money means limited abilities and that means limited resources and what you’ll find is that different you know the same role could be done by the I mean multiple roles could be served by one person they also look at you know efficiency for performance purposes simplicity making sure that you know ensuring that people can be accountable or responsible and so on so what you see here are different factors that an organization would want to consider one important one is communication and you know span of control efficiency and effectiveness how much they want to have for control these things stand you know separately but an organization looks at each individual aspect here and decides what works best for them in putting together that organizational structure that that they feel is is a good option for them so let’s take a look at some of these organizational structures that have been widely used by organizations starting from I’m going to just discuss some of the common ones so I’ll start with functional organizations or functional functional or centralized organization in a functional organization the organization is divided into different departments so let’s say every one of these is a department right and whenever they have a project the head of the department will be the one that coordinates the project they don’t assign it to the team below so even though there could be some team members below right they don’t assign to the team members below instead they take on the management of the project and so you’ll find that in every department the head of that department is the one that’s overseeing and managing that one project not the team so this we refer to as a functional organization okay so that was the example of the functional organization the heads of the departments wouldn’t run the project now let’s take a look another one which is called the weak matrix organization in the weak matrix organization the the head of the department will assign the project to a technical person in that department right this technical person can collaborate with other resources in other departments in order to run this one specific project but this technical person is not a PM right they’re just a technical person so this could be an IT guy who is being tasked with a project because the organization does not really have you know a true role for a project manager and because they depend on technical resources to run their projects we refer to this project as I mean we refer to this one organization as a weak matrix organization it does not mean that the organization is weak what it means is that the role of project management is weak in the organization it is not one it’s not a role that they see as a name you know as a designation they need to have and they would rather give this to a technical resource now the next one after this is the balanced matrix right that was the weak matrix that we discussed let’s look at the balanced matrix let’s take a look at the same example let’s just call this technical guy a project manager right this is a project manager with a true designation of project manager and they report to a functional manager right they are in a department that is a functional department it is not a project management office it’s a functional department so this could be the IT the Armant right and the PM reports that the head of IT but he or she is a PM right this is a PM working below a functional manager in this case we say that there’s a bit of a flavor of project management because now we have a designated role of a project manager and we can refer to this as a balanced matrix organization okay now let’s go to one more a one level up so if it works in levels the functional organization is the lowest presence of project management and then it goes to week matrix and then it goes to a balance matrix and then to the strong matrix in the strong matrix what we have is a PMO so let’s look at a PMO here that’s an example and under the PMO would be all the PM’s right if the PM’s are not inside the PMO the PM’s could be inside the departments but what happens here is that the PMO gets to drive project management in the organization they get to control the activity of the procedures or the templates or the policies that are being applied in managing the project having a project management office as you see here represents a strong culture of project management and thereby and that’s why we call this a strong matrix organization now there’s one more here that we need to discuss and that is the projectized organization the project ties organization is also referred to as a project oriented organization and in the project oriented organization you’ll have something that looks like this maybe whoops CEO at the highest level right and below that PM PM PM so you’re wondering what happened with all the departments well there’s going to be maybe a specific role here that handles multiple functions but not at the apartment right project project project oriented or project ties organizations tend to focus on projects so it’s a group of PM’s that are being managed by maybe the owner or director and they are very much project driven so if they don’t have projects then there’s nothing for them to do they’re not department oriented they don’t have an HR department an IT department a procurement department they would have this one function here on the right take care of different things or maybe two or three or a few people that handle specific functions but not departments they’re just the this is – this would be very typical of contractors that take on projects and when they have projects they go and recruit a team to support the project once the project it was once the project is done then they go and eliminate that team and then they’re hoping that additional projects are coming in to the organization so that these PMS can remain in business right no projects no business and nothing to do so we say this is a project oriented or projectized organization obviously you could always have a hybrid set up and in a hybrid setup what you’ll see is that and this is the one here right and a hybrid set up you could have a mixture of a week and a balance where or maybe a balanced and a strong matrix right where we have the p.m. under a department but you also have a PMO running you know side-by-side with that and the organization is maybe shifting from the from what they used to have into something that maybe it’s a little more mature so you’ll find here you’ll find the head of the organization then you have all these departments and here we have in this department we have a p.m. and this is a department right and over here we have a PMO right and it has its own PMS so this part of the organization here is operating as a strong matrix whereas the one on the left here is operating as a balanced matrix so you can have such mixture and this is called a hybrid structure for an organization okay so the last thing here is the project management office what is a project management office it’s a department an organizational structure that takes care of project it standardizes how we do projects they put governance and control through policies and procedures that the PM’s have to abide by they facilitate sharing or resources so a technical resource could be used on multiple projects so they do resource management and they typically would have a methodology made of several templates that they would use to unify how they document their project management plans and and tracking of how in monitoring and controlling and the change management process is that they use and so on and so forth so an organization that has a PMO gets or stands to benefit from the let’s say from the skills of the team that is in the PMO from the consistency in how they do things and from the typical knowledge retention that a PMO can support so if you look at the circle that is on the right here you see that there are many functions that this PMO can support including communication saving files lessons learned coaching guiding the project managers supporting them when there are problems doing you know risk management for them requirements gathering monitoring their project schedule and flagging things when things are going wrong so there is a very there’s a very useful role for a project management office whenever you have a few to more projects within an organization now an organization can have different levels of PMO’s going from supportive to controlling to directive let me show you what these things would look like on this chart that you see here if the PMO was under a department so let’s say the PMO is sitting inside a department then we refer to this as a supportive PMO why is it a supportive PMO well this PMO can only do supportive functions assume there were PM’s here right there’s a PM inside here underneath that Department the PMO is technically at the same level right as these PMS right if you know let me just erase some of these and you’ll see what I mean right so put the PMO here right and then bring this PM that reports to that department bring this VM down here that reports to that department now you can see that the PMO is at the same level as these PM’s and therefore cannot control them what it can do is it can take information from them on how you know the status of their projects and you know and it can give them advice tips and provide templates and maybe guidance on how to run their projects but cannot enforce anything in there so this is a supportive PMO it typically has a responsibility of collecting data collecting project performance and reporting up into the senior management up there right controlling PMO goes one level higher a controlling PMO would typically sit let me move this a little bit here so we can have a wider view a controlling PMO would extend this and have the PMO at that level at this level the PMO is at the same power or strength as the department’s and therefore is able to control and enforce rules when it comes to the PM’s at the lower level it is higher ranking and therefore can set the rules and guidance for the SPM so if they put a process together or methodology they would be able to enforce it on the PM’s and they can take action if the if the PM’s below here don’t want to abide by these rules so that’s called a controlling PMO the controlling PMO is pretty much the standard PMO out there and that would be like the next level up from a supported PMO an organization typically would start with a supported PMO run it for about a year and then the so that supported PMO that is down here would run for like one year and then this controlling PMO may last for like four or five years right after which maybe they would want to consider having a directive PMO the directive PMO sits at the highest level of the chain here and it’s sitting right below that CEO and is helping with strategic decision-making because it is higher than the departments that we see here it is able to control what the departments do so it can decide which projects can run this year and next year they get to sit on the strategic forming meetings on an annual basis they tell the CEO or the governance board what they feel their capabilities are and what can be done this year or next year and which projects the department can run or not run the directive PMO is very powerful and it’s sometimes referred to as a center of excellence in most organizations that brings us to the very end of this one session I hope you found this to be informative and useful if you liked it I would like to ask you to subscribe like and share let us know if you have any feedback or comments and we will be happy to respond to those we look forward to seeing you on our next video have a beautiful day and good bye