One of the key roles of project managers is to integrate complex project success factors. This has become increasingly critical in today’s highly turbulent business environment.

In the revised examination content outline issued by the Project Management Institute (PMI) for the new PMP examination format effective 1 July 2020, one of the new domains that will be introduced is factors surrounding Business Environment. This article summarizes the key tasks project managers are expected to undertake in this rapidly changing business environment. By familiarizing yourself with these issues you will be better prepared to answer questions that will be posed in the latest PMP examination that will commence as of 1 July 2020.

When business environments within which projects are managed changes, the manner in which projects have to be managed needs to change as well. Many considerations and subsequent adaptations have to be made. There are critical primary considerations. A discussion on what they are with examples of how they affect projects is listed below.


The primary business environment considerations include:


  • Maintaining the right fit between environment and approach
  • Ensuring project benefit realization
  • Supporting organizational change
  • Planning and managing project compliance
  • Establishing the right governance structure
  • Optimizing knowledge transfer


Maintaining the right fit between environment and approach


As and when the business environment changes, due to changing technological developments or stakeholder requirements, the final project and product scope will have to change as well. Hence it is imperative that the project manager evaluates and addresses external business environment changes for impact on scope. This is done by determining the appropriate project methodology/methods and practices to be used in order to adapt to the changed business environment climate.

For example, the development of an Artificial Intelligence powered mobile app. Such a complex project will most likely have variations in scope and stakeholder requirements as and when there is a technological change that ripples across the business environment. It will require a cross functional team that would develop software in small iterative cycles. For this project, the project manager needs to select an agile life cycle approach and undertake it in accordance with the approach selected. If he continues the project using the usual predictive life cycle approach, the project will be ill equipped to meet the rapidly changing requirements that will occur. Hence, ensuring that the right fit between business environment and project life cycle type is critical.


Ensuring project benefit realization

Ensuring that the project management approach is suitably adapted to the business environment enables projects to better deliver upon its objectives. This translates to the projects being able to better deliver value to the end user. Project managers should focus on ensuring that the benefits are realized, and should also ensure measurements for tracking this realization of benefits are in place.

For example, the AI mobile app development project is deemed successful only once it produces value to the client, i.e. when the software developed allows the client to use AI and analyze existing big data, in order to make decisions that will benefit the organization’s bottom line. If the app is completed, and the client is unable to do so, the client will continue to insist on additional changes which will only increase the cost and time of the project in question.

Hence, project benefits/value for both the client as well as for the performing organization have to be clearly defined and measured. This is especially crucial for projects undertaken in an evolving, rapidly changing business environment. Until and unless both the performing organization as well as the client realize the benefits they crave, the project should not be deemed to be successful when undertaken in an agile project life cycle approach.


Supporting organizational change


A project manager’s sphere of influence usually extends beyond the boundaries of a particular project. They should be well versed with the current business environment and the need to be agile. Therefore, project managers should support the organization in adapting to changing external business environments. The organization’s current culture should be assessed and eventually shaped into what the current business environment demands, with the assistance of the project manager.

Looking back at the mobile app development example, the project manager should recognize that the project comes with it a degree of unpredictability. Therefore, for it to be successful, the work culture in the organization has to change from a “command and control” culture, with project managers exhibiting a “predict and plan” mindset, to a “servant-leadership” culture, with project managers adopting a “sense and respond” mindset. This allows for self-organizing teams that collaborate easily with stakeholders to emerge that is crucial for projects undertaken in an agile manner to succeed.

In this regard, project managers need to be mindful that organizational change from a cultural and structural standpoint is necessary for projects to continually deliver products and services that are desired. Hence supporting organizational change in this regard is necessary.


Planning and managing compliance


With changing business environments comes changing stakeholder requirements. Compliance requirements from regulatory bodies in particular will evolve and amend in order to keep up with the ever-changing business environment. Therefore, it is necessary for project managers to remain vigilant on threats to compliance and analyze carefully consequences of non-compliance, so that necessary action is taken (if required) to ensure project remains in compliance.

For example, when undertaking development of a software that involves relatively new disciplines, such as artificial intelligence and big data, there may be a need to comply with regulatory requirements that are unique and without precedent. This makes compliance slightly more complex. Project managers need to be aware of these complexities and seek for ways and means to ensure that compliance to these requirements are met throughout the project. Failing to do so will lead to project delays and increasing project cost as well as reputational risks.


Establishing the right governance structure


All projects require a governance structure that governs how well the project is being managed in accordance with prescribed policies and practices. This enables the integrity of the project to be maintained. As business environments are becoming increasingly turbulent, the need for more sophisticated governance mechanisms may emerge. Hence it is imperative that the project manager is able to determine and establish the appropriate governance system for the project.

For example, let’s look at our AI powered Big Data mobile app that is being developed. It is to be developed through a series of short iterations. For such a project, there may be a need for an internal governance mechanism, to ensure compliance with company policy, governmental regulations, monitor quality, as well as privacy concerns, during each successful iteration.

Additionally, a project that is as complex as the AI based app development may also need to be guided, in terms of client requirements, by a designated customer representative who would serve as a product owner. However, the product owner’s line of sight may be limited to the product requirements only. He/she may not be in a position to determine issues from an organizational perspective. Therefore, it may also be necessary for the setting up of a portfolio product owner who oversees all project product owners within the organization, providing an avenue for synergy as well as providing the organizational perspective that may be lost without such a channel existing.


Optimizing knowledge transfer

With increased volatility and uncertainty in business environments

comes increasing obsolesce of existing knowledge base. The need to constantly acquire, produce and integrate knowledge has to be ingrained in such environments. This enables the knowledge sharing that is necessary for project continuity to occur. The project manager has to continually discuss project responsibilities within the team, outline expectations for this new working environment and confirm that suitable approaches for knowledge transfers are in place for managing emerging project issues.

For projects undertaken in an environment with a high degree of volatility and uncertainty, optimizing knowledge transfer is crucial. For the AI mobile app project, a lot of creative thinking is required to produce new knowledge as well as to seek for ways and means to integrate this knowledge.

Hence, regular knowledge transfer sessions, such as daily stand up meetings as well as retrospective meetings, become an integral part of the overall agile project life cycle approach. These sessions enable new knowledge to be regularly acquired, produced and integrated as the project progresses

As detailed above, it is clear that the need for vigilance and an acute understanding of the considerations detailed above has become an increasingly critical skill set for project managers entrusted with managing projects within a volatile and uncertain business environment.


Dr Rumesh Kumar

Sharma Management International

February 2020


Projects are unique undertakings. They involve many different activities, expertise, processes and situations. These differences have to be streamlined and integrated towards achieving project objectives. Only when this is done effectively and consistently throughout the project, the desired project objectives are met.

This integration needs to be carefully thought out and managed by a project manager. It involves bringing together different expertise and experience, linking different key processes, customizing project requirements as well as dealing with complex situations.

The process of integration is understood clearly by categorizing it differently to signify its importance and relevance in project management. Essentially the categories include cognitive integration, process integration, complexity integration as well as contextual integration.

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