Project Scope and Business Environment Impact

The project’s business environment can be the most important factor affecting project scope. This impact is agnostic to your project’s development approach (plan driven, agile, hybrid). Each development approach has ways to respond to these changes. It is the project manager’s responsibility along with team leaders, team members, sponsors, and other stakeholders to identify business environment changes early, prepare adequately and adjust to them.

Business Environment Influence on Scope

1. Business Environment Influence on Scope
2. What Causes Business Environment Change?
3. Project Manager Business Environment Changes
4. Ways to Engage Stakeholders
5. Tips to Understand the Business Environment Impact

What Causes Business Environment Changes?

As a project leader, it is important to understand the organization’s strategic and operational objectives as well as the specific objectives of the project. It is equally important to understand the external business environment that can impact and introduce change to the project.

Common causes of internal and external business environment change include:

• Competition / market
• Regulatory / compliance
• Technology
• Politics

A project leader must continuously observe and respond to the business environment. Start by asking good questions. In addition, you must anticipate environmentally caused risks throughout your project.  The following are some strategies for anticipating environmentally caused changes.

Project Manager Business Environment Considerations

There are several actions you can take to sharpen your business environment acumen and prepare for project scope impacts:

Inform Yourself: Expand your organizational knowledge and awareness. Consider the strategic objectives. Who are the key decision makers? What happens if the project fails? What is happening in the industry? Find new influences (e.g. How static is the regulatory or compliance environment?, Will technology change?, Is the competitive landscape changing?). Understand and make connections.

Watch for Changes: Be observant as to what is happening in the marketplace as well as internally in your organization. Look for the ripple effects that can impact your project scope. What is learned?  What is new?

Analyze the Organization: Determine if your organization has the maturity and structures to support environmental changes that may occur during or from the project, how the project can adjust to them and how it can prepare the organization for the change.

Create Processes and Procedures: Look for opportunities to get additional help and support. For example, having a way to identify and escalate a business environment change to appropriate stakeholders is beneficial to dealing with the situation efficiently. By having a clear process it makes it easier for all project stakeholders to escalate concerns.

Monitor the Environment: By monitoring the known environmental factors and our current state we can see trends developing or identify changes to the project environment early to proactively respond during project work.

Identify Obstacles: Explore obstacles as they happen and facilitate ways to help the project more forward.

Continuous Improvement: What are you learning along the way that could help to do better or more efficient work?

Ways to Engage Stakeholders

Ask your stakeholders for assistance in identifying internal and external business environment factors that need to be considered. You’ll want to hear what they think might be influencing the business environment. Ask for their help in evaluating any risks to the project. Encourage stakeholders to help you develop ideas, create processes and evaluation measures to keep the project on track.

Engaging stakeholders is also about sharing relevant project information. For example, you will want to communicate the cost of failing to anticipate business environment changes and impacts to your project. Provide updates on the successes and managing the project within the broader organizational environment. Give your project leadership the right information. Share your reasons for doing this and demonstrate through actions how it’s relevant, appropriate, and important.

Tips to Understand the Business Environment Impact

Here are three tips you can use to evaluate, prepare, and address business environment of your project and be prepared to manage its potential impact on scope.

1. Clarify the Current State

Clearly define the current state of your business environment. Consider the following to document your understanding:

• Engage with stakeholders
• Identify external business environment influencers
• Don’t forget internal influencers and attitudes
• Group influencers using an affinity diagram
• Analyze for missing groups
• Analyze the impact
• Prioritize for focus

2. Create a Register for Business Environment Influencers

Use a register as a repository of the influencers and the relevant data. It should include the name and description of current concerns and include other information. Here is a more detailed list:

• Name of influencers and a description
• Category
• Type (internal / external)
• Action required
• Risks
• Timing
• Measures
• Owner
• Level of influence on project

3. Perform Check Ups – Did You Get It Right?

As the project work is being done, schedule a periodic re-evaluation of the current state. In this evaluation, review:

• What is new?
• What has changed?
• Could the efforts produce unintended positive or negative results?
• What should be adjusted?
• What must be avoided?

RMC’s Got the Support You Need

If you are planning to take the PMP exam, you will need to know about the business environment and the broader impacts that environment has on your projects.  Rita Mulcahy’s Exam Prep materials can help you prepare for this and other exam topics.  We offer PMP Exam Prep instructor-led courses and PMP Exam Prep eLearning. Prep on your own time with Rita’s Exam Prep book, PM FASTrack Exam simulator or our complete PMP Exam Prep System.

If you already have your PMP certification, earn 1 FREE PDU when you listen to our webinar Bursting the Scope Bubble: Business Environment and Its Influence on Your Project.