Enterprise Environmental Factors PDF

Introduction
Enterprise Environmental Factors (EEFs) are the influencing factors that can constrain or direct the
project; however, not under the control of the project team, and these factors might be internal and
external to the organization (PMI, 2017). Particularly, for longer projects, the conditions under
which the project operates from initiation to execution phase changes significantly. One noteworthy
EEF to consider at the current situation is COVID-19 which had brought enormous global economic
upheavals.
It is crucial to consider these factors during the planning phase of the project and these factors
should never be taken as granted no matter how minor impact it seems to make. Rad (2013) had
mentioned that if EEFs are not approached properly: how to identify, isolate and analyse and if
possible proper response plan is not prepared, these factors might impose a significant impact on
the team’s competency, performance and progress of the project ultimately.
For more clarification, while considering the case of LEGO, the company had intended to lunch new
project on integration of Agile and Stage-Gate model which is a new project. In the planning phase of
this project, LEGO should consider all the internal and External EEFs during the planning phase of the
project. Furthermore, since LEGO was initiating a change, another significant aspect to consider is
benefit realization management. Changes must be carefully planned and undertaken so that benefits
are genuinely generated which might be in tangible or intangible form.
Evaluation of the internal and external factors
As LEGO was intending to transition from Stage-Gate to hybrid model of Agile-Stage-Gate model, it is
important to evaluate EEF and reflect upon them right from the start of the project because it
significantly influences whether the project is feasible in the first place at the current time and state
of LEGO. The evaluation of EEFs (although outside the control of project team) helps LEGO to
identify constraints and puts project into context so that the project can capitalize the available
opportunities and mitigate threats.
There are number of tools and frameworks that can be helpful for LEGO to identify internal and
external EEFs and appropriate project management plan can be formulated. A number of tools are
suggested by various students as seen in discussion forum. Some important frameworks for
evaluation of EEFs as used by my peers are VRIO, PESTLE, McKinsey 7s, SWOT Analysis,
Brainstorming, Scenario Analysis and MOST analysis. After a deep insight on each of these
frameworks, I personally realized that PESTLE and McKinsey 7-S models are most vibrant and
important frameworks for assessing external and internal factors respectively. My peer Prosper
Mandela Amaltinga Awuni has highlighted that these frameworks can reveal tip of iceberg
metaphor of issues and factors which can never be identified by general management meetings. To
elaborate her highlight, the PESTEL framework provides a deep insight into political factors,
environmental factors, social, technological factors, economic and legal factors which provides
comprehensive view of external factors that might constrain or influence the project. Similarly,
McKinsey 7s model is an important framework for assessing the internal factors of the organization
where 7s stands for skills, staff, style, and shared values, strategy, structure and systems of an
organization (Jurevicius, 2013). McKinsey 7s model is used for conducting qualitative impact analysis

of EEFs where strategy, structure and systems are the tangible aspects of the company and skills,
staff, style and shared values are soft assets(intangible assets) of the company (Jurevicius, 2013).
Looking into the case study of LEGO which is moving into Agile-Stage Gate, the management style, ,
project governance, project team structure and decision making style have to be changed where
personnel might have to be relocated or some employees might have to be fired. In this case, LEGO
has to navigate labour laws and fulfil a legal obligation which is an important external EEF to
consider. They should change the organization structure (scrum master, product owner,
development team) and have to consider political conditions inside LEGO .Moreover, another
important consideration is communication structure in LEGO that may have to be changed for the
new model. Additionally, the tools and techniques required for the new integrated model would be
different and the available technical resources should have to be considered. They should
reconfigure the Project Management Information System (PMIS) for the new model. Some
important EEFs to be considered are tabulated in table 1 below.
Table 1: Internal and External EEFs of LEGO
S.N. Internal EEFs(LEGO) External EEFs (LEGO)
1 Organizational Culture, Structure,
communication system and Governance of
LEGO
Government Regulations(Labour law: Some
employees might be fired during company
reconfiguration)(Major)
2 Information technology software(Software
department of LEGO)
Pandemic (COVID-19, Ebola)(Major)
3 Internal Political Conditions Global recruitment of expertise, Global Tax laws,
Inflation(Major)
5 Available Resources( PMIS, recruitment of
new employees)
Industry Standards, Market conditions
6 Employee expertise and capability Public holidays and vacations
7 Job roles and responsibilities Natural disasters(Minor, as the change is internal
to the company)
Impact of EEFs on project management processes
Out of 49 processes in project management, PMI (2017) has enlisted EEFs as input to most of the
processes. As EEFs are important risk factors for not only a project or project team, but for the
operation of entire company or business. There are various tools to evaluate impact of the EEFs on
the project (49 processes are the breakdown of the project from initiation to closing) which are
PESTEL impact map, Ishikawa diagram, Pareto Analysis, mapping technique, probability analysis and

conversion of SOWT to TOWS. Number of tools can be used to validate the impact of EEFs and one
tool can seldom fulfil all the impact analysis requirements. However, for the case of LEGO, the
PESTEL impact map is formulated to evaluate the impact of EEFs on a new project of LEGO which is
illustrated in the table 2 below.
High Medium Low PESTEL Impact
Map
Low Medium High
Positive Negative
Political Internal
Political
Conditions
Environmental
Social Public
Holidays
and
Vacation
Innovative
new
technology
reduces time
to
market(spent
4 years in
Story telling
preoject
IT
departmen
t using
LEGO for
long time
Technological PMIS, New tools
and techniques for
hybrid model
Economical Global taxation
Legal Government
Regulations(Labour
laws
The table 2 clearly shows high negative impact on technology on acquiring new tools and techniques
which definitely impacts the budgeting process and ultimately cost management plan. Similarly,
hiring and firing of employees’, expertise and capability of personnel and job roles and
responsibilities, necessity of new tools and techniques impacts resources management plan and
procurement management plan. Similarly, new organization structure, decision making styles and
management style impacts communication management plan. These are only examples of some
EEFs that impacts project processes; however many processes are affected by various internal and
external EEFs.