The environment in which a project is being carried out greatly influences its success or otherwise. It is essential to be aware of the project environment and take measures to deal with its influence throughout the project lifecycle. Although a project's budget, scope, schedule, and objectives are all very well defined, the environment in which a project is carried out is seldom clearly understood or defined. This may prove risky in the context of Project Management and execution. While defining objectives, scope, schedule, and budget for a project are all good and necessary for planning, executing, and controlling it, if the environment in which it exists is ignored, you might be inviting failure. 

The reason is that the project environment plays a vital part as these other factors drive performance. Furthermore, no two projects are similar, so different factors may impact them. But even if any two projects were the same in the budget, scope, schedule, and even objectives, they would be executed in different environments, so their impact on them would be different. Therefore, environmental factors often determine if a project will be successful. 

In this article, we are going to deal with the project environment in detail.

What is the Project Environment?

The project environment is nothing but the surroundings and conditions in which a project is executed. It includes many things like air, water, human resources with whom interactions take place and social, political, and economic conditions. And these could be both within and outside the project limits. So, we can say that all the internal and external factors that impact Project Management make up the project environment. Any of these things can affect the project's budget or schedule, influence the team's morale, or impact the project in many other ways. In project management, it is not only the project that needs to be considered; there are many other things. For proactive management of the project, understanding the environment in which it has to function becomes essential. The Project Manager must have plans to deal with all these internal and external factors that might impact the project in one way or another. 

Almost every project is planned and executed in some social. The economic, political, and environmental context exerts some intended and/or unintended impacts on the project. These could be both positive and negative impacts. So, it is essential that the Project Manager views the project from the social, cultural, international, economic, physical, and political environment context. These are the parts of the external environment where the project must operate. But there is an internal environment also. This includes all the stakeholders and the team. The Project Manager has to consider these people's ability to influence the project's outcome. The Project Manager's skills must affect this environment in a positive way so that the change intended to be brought about by the project is received better. And while working with the team, the ability of the Project Manager to work with the people plays a vital role in getting the best results. This is particularly important in today's highly technical and competitive world full of complex situations. 

We have seen the different things that constitute the project environment. Let us look at the individual aspects of the project environment one by one, including what needs to be considered in them and how they can impact the project.

1. Social and cultural environment

This is a rather important factor to be taken care of in Project Management. There are questions to be considered: How does the project affect the people of the place at which the project is being carried out or how do the people of that place can impact the project? How do local people view the project? Will they be in favor of or against the project? Will the project affect them culturally? Or, the demography of the area might affect the overall project plan. All of this may need a thorough understanding of the demographic, ethical, ethnic, educational, and religious attributes of the people who are affected by the project. The chances of a project's success will be boosted if the Project Manager understands the importance of influencing the cultural and social environment to benefit the project's management stakeholders. 

When talking about the cultural environment, it includes the organisation's internal culture, too. And here, clear and regular communication plays a vital role. Every member of the project team, and for that matter, every stakeholder, must feel an essential part of the project, just like other stakeholders and members. It is vital for the Project Manager to provide sufficient information to enough people. This will promote a healthy cultural environment of cooperation and collaboration and will build trust. So, it is imperative for the Project Manager to consider and work for the improvement of both external and internal cultural and social project environment.

2. Physical environment

This is another key factor in Project Management. Careful consideration of the physical environment of the project will help identify and mitigate many potential risks. Will the project affect the physical environment or ecology of the place where the project is undertaken, and if yes, how? It is always better if some members of the team have knowledge of local ecology and geography that may impact the project or may be impacted by the project. Factors like local weather, extremities of the weather, topographical issues, constraints, if any, to access the project site, availability of human resources and utilities, and sensitivities toward the environment should be considered and factored into the project plan. All these are external factors, and most of these are beyond the control of the project manager or the organization. However, they play a vital role in the success or failure of the project.

3. Political environment

The political environment also plays a critical role in Project Management. The Project Managers must know the boundaries within which they have to operate. These could be national or local laws. The prevailing political atmosphere can also impact the progress of a project. Such factors determine how the Project Management team will engage with the stakeholders. The Project Manager may have to deal with issues like corruption and differences between national and local policies. There may be a sudden change in political power, and it may alter the influence it exerts on the project so the Project Management team would be required to adapt to this change. So, the Project Manager must consider all these things when making a project plan and schedule.

4. Economic environment

The economic environment of the place where the project is being established influences the cost of the project. So, the Project Manager must be aware of the economic climate and whether the input cost would be stable or not. This would help in making a better estimate of the project. Price stability is an essential factor in the success of a project. Knowledge of the economic environment will also help better control the project as it would minimize the chance of the project getting stuck due to sudden changes in the costs and prevent the project budget from going awry. 

5. Technological environment

The Project Management team should be aware of the technological environment in which they are going to operate. Choosing the appropriate technology for the project is an important task that will influence the project outcome. Moreover, the available technological know-how can greatly impact the project objectives and the project's value. Therefore, selecting the right technological tools and people with relevant skills and experience is crucial for the success of the project. These things impact various aspects of the project like design complexity, the speed of the project and its efficiency, sticking to the scope and standards of the project management, dependability of the product or service, and safe operation and execution of the project. With rapid technological advances, the project environment is also changing fast. So, the Project Manager has to be fully aware of the latest tools available that can be useful in the fast, safe, and smooth execution of the project.

6. Market conditions

The market conditions in which the project exists also play a vital role in determining its success. We all know that markets operate in dynamic conditions and thus may either benefit the project or be detrimental to its performance. Market conditions may favourably or adversely affect the project by influencing the ability to finance it or altering the project's scope and standards. They may also affect the availability of the human resources needed for the project.

7. Structure and culture of the organization

This one pertains to the organization's internal project environment. The structure of the organization influences the way a project is managed. The structure may include the systems that are in place in the organization and how they operate. The processes being followed to achieve the goals of the organization are also part of the structure. These have a lot of impact on how the project is executed. Similarly, the culture of the organization, including the work culture, also significantly impacts how the project progresses and is managed. The thought process and the strategies of the top management have a bearing on the qualities of the success of a project. So, this is an important aspect of the whole project environment that must be carefully considered for better Project Management.

Challenges in Project Management

Every Project Manager aims to deliver a successful project. But it is not an easy task. There are constraints of time and budget. So, managing a product within these limitations and then delivering a quality product or service is a challenge in itself. Deadlines and budget are just two things within which a Project Manager has to operate. There are many more things that can impact a project. Some factors are beyond your control. They can set the project back or put it off the rails. Then, some things can be sorted out but keep arising, thus affecting the workflow, such as issues from internal stakeholders or team members. They also have the power to get your project off track or delay it. Some of these things, if not considered carefully or not handled efficiently, could even escalate the project cost, thus disturbing the budget, which no one would like.

Also, check:  5 Different Types of Project Cost

Conclusion:

So, we have explored what project environment is in project management, and these are the different aspects of the environment in which the project exists and operates. These environmental and contextual factors shape a project's success or otherwise and must be carefully considered while making a project plan. This also shows that the Project Manager's role and responsibilities have expanded beyond operating and controlling activities inside the organization. Project Management is no longer just about planning, scheduling, and monitoring. Identifying and establishing the project's link to external environmental factors had become vital to the successful completion of a project. To deepen your understanding of project management courses and their environmental aspects, enrol in the course offered by Simpliaxis today!