Pmpexam-2024 Lesson 1-Business Environment v1.0

BUSINESS
ENVIRONMENT
Jan - 2024
1
Table of Topic A: Foundation
content Topic B: Strategic Alignment

LESSON 1
BUSINESS ENVIRONMENT
Topic C: Project Benefits and Value
Topic D: Organizational Culture and Change Management
Topic E: Project Governance
Topic F: Project Compliance
2/27/2024 43e-BM/HR/HDCV/FSOFT V1.2 - ©FPT SOFTWARE – Corporate Training Center 2

Lesson Objectives

Topic A
Foundation
2/27/2024
43e-BM/HR/HDCV/FSOFT V1.2 - ©FPT SOFTWARE – Corporate Training Center 4
Topic Objectives
• Foundational project management
concepts
• Project management principles
• The Agile mindset
• Tailoring – hybrid approaches,
processes and practices in project
management

Organization Structure
Project and Project Manager
Project Management Organization (PMO)
Organizational Project Management (OPM)
Program, Portfolio and Operation
Project Life Cycle & Development Approach

09e-BM/DT/FSOFT - ©FPT SOFTWARE - Corporate Training Center - Internal Use 6
Project
Has unique Progressive

It is temporary
purpose elaboration
Requires Initiate by
Resources from customer or Uncertainty
various areas Sponsor
Unique (product, service,

Temporary endeavor result)
Progressively elaborated
Project (2)
Definition Project success depends on:

• Creates a unique product, service • Organizational project maturity
or result • Project manager effectiveness
• Is time-limited • Funding and resource availability
• Drives change • Team member skill levels
• Enables value creation for a • Collaboration and communication
business or organization within the team and with key
stakeholders
• Understanding of the core problem
and related needs

Project Management
Project
• A project is a temporary endeavor undertaken to create unique product,

service or result
Project Management
• The application of knowledge, skills, tool & techniques to project activities to

meet project requirements
Project Manager
• The Person assigned by the Performing Organization to lead the team to

achieve the project Objectives

Project Manager (2)
»The person assigned by Performing Organization to
lead team that is responsible for achieving project objective.
Management Skills Interpersonal Skills

• Planning • Leadership
• Meeting Management • Communication
• Time Management • Influence
• Organizing • Motivation
• Controlling • Negotiation
• Team Building

Project Manager (3)
» PM often has lot of responsibility and lacks of real authority. He
often negotiate with management/function manager for
resources.
Reports to Works with

• Functional Manager • Business, System Analyst
• Program Manager • Quality Assurance Manager
• Portfolio Manager • Subject Master Expert
• PMO Manager • Vendor, Project Staff
• Operation Manager • PMO

Project Manager (4)
» PM need to involve project team members in the planning process.
» Identifies and document conflicts of project objectives with organization
strategy as soon as possible.
» Show consider every processes to determine if they are needed for
individual projects
» Must balance the constraints and tradeoff, effectively communicate the
info (including bad news) to sponsor for informed decisions

Project Manager Authority (5)
» In control of the project all the time
» Authorized to spend the approved project budget
» Authorized to make all project execution decisions
» Empowered to use resources

PMO
» PMO is a department in the organization. It is a management structure that
standardizes project-related governance processes & facilities sharing of
resources, methodologies, tool & techniques

PMO
»PMO can take one of several different forms:
Supportive
• Policies, Methodologies, templates and lessons learned. It has low control.

• Develop best practices, methodologies, standards and templates
• Coach, mentor, train, guide project managers
Controlling
• Monitor compliance with project management standards, policies, procedures and templates via project audits. It has
moderate control.
• Train others, assist with tools.
Directive
• Provide PM for projects; Takes control; Manage directly; Responsible for result of these projects. It has high control.
• Manage shared resources
• Coordinate communication across projects
Agile Centers of Excellence (ACoEs) aka Value Delivery Office (VDO)
• ACoEs enable, rather than manage, project efforts: Coach teams, Build agile mindset, skills and capabilities throughout
the organization, Mentor sponsors and product owners
PMO responsibilities
» Identifying & developing Project Management
methodology, practices & standards
» Monitoring compliance with Project Management
standard policies, procedures, and templates via project
audits.
» Developing and managing project policies, procedures,
templates and other shared documentation
(organization process assets)
» Coaching, mentoring, training and oversight
» Coordinating communication across projects
» Managing shared resources across all the projects

PMO responsibilities (2)
» More …
» Be part of the Change Control Board
» Be Stakeholder
» Prioritize projects
» Recommend the termination of projects when appropriate
» Help gather lesson learned and make available to other projects
» More heavily involved during project initiating than later in the project
Many large and established project- oriented organizations have a PMO, but PMOs
are not a requirement for project management practice.

PMO vs Project Manager
PM PMO
» Focuses on project objectives » Manages major program scope changes to

better achieve business objectives
» Controls assigned project resources
» Optimizes use of shared resource across
» Manages constraints of individual projects
projects
» Manages methodologies, standards,
risk/opportunities, metrics &
interdependencies

Organizational Project Management
» OPM is strategy execution framework
» Coordinates project, program,
portfolio and operations
management, and which enables
organizations to deliver on
strategy
» Support practices to consistently
and predictably deliver org.
strategy
» Produce better performance,
results, and sustainable
competitive advantage

Organizational Project Management (2)
» OPM is A System for Value Delivery

Program Overview
» Is a group of related projects that has related
output
Program
» Attributes
» Decreased risk Sub
» Economics of scale Project 3
Program
» Align projects direction & improve co-
ordination Project 1 Project4
Project
3
» Focus on inter-dependencies between projects

» Need program manager’s coordination and Project 2
Project2 Project6
management activities
Project
Project7
1

Examples about program

Program Management vs Program Manager
Program Management
• The application of knowledge, skills, tool & techniques to program

activities to meet program requirements
• Obtain benefits and control not available by Managing Projects
individually
Program Manager
• Provides leaderships and direction for the project managers heading the
project in the program
• Focus on Benefits
• Decreased risk
Portfolio Overview
» Is a group of related program, individual
project and other related operation work
Project
» Attributes Sub Portfolio
» Helps achieve specific strategic Program
Portfolio
business goals, Enhance benefits to Project
Organization Project
» Reduce risks Program
» Optimize use of resources Project
» Include Operations Operations
» Not necessarily directly related between

projects

Project – Program – Portfolio – Operation

Examples about portfolio

Operation
» Is on-going endeavors that
product repetitive output, with
resources assigned to perform Decline Introduction
same set of tasks according to
standards institutionalized in a
product life cycle Product
Life
Cycle
Maturity Growth

Distinct Project with Operation

Project management – Operation management

Distinct Project with Operation
PROJECT OPERATION
» Attain its objectives and terminate » Sustain the business
» Create own character, organization » Semi permanent charter organization
and goals and goals
» Unique product or service » Standard product or service
» Uses Heterogeneous team » Uses Homogeneous teams
» Are Temporary (has start & end date) » On going activity that produces
» Catalyst for change repetitive output
» Maintain status quo

Portfolio Project Program Triangle

Project Life Cycle & Development Approach
» A project life cycle consists of 5 distinct phases including initiation, planning,
execution, monitoring, and closure that combine to turn a project idea into a
working product. These are industry specific.
» Ex: Software development project phases: Requirement -> Design ->
Implement -> Test -> Deployment
» Development Approach: A method used to create and evolve a product, service,
or result during the project life cycle, such as a predictive, adaptive, or hybrid
method.
» Project Management Process – what you need to do to mange the work

Project Life Cycle & Development Approach (2)

Project Life Cycle & Development Approach (3)
» Characteristic

Organization Culture & Style
Organization Communication
Organizational Structures
Organizational Process Assets (OPA)
Enterprise Environment Factors (EEF)

Organization Culture & Style
» Organization Culture & Style
» It is a system of shared assumptions, values, and beliefs, which governs how
people behave (dress, act, & perform job) in organizations
» Examples
» Shared visions, mission, values, beliefs, & expectations
» Regulations, policies, methods, & procedures
» Motivation & reward systems
» Risk tolerance
» View of leadership, hierarchy, & authority relationships
» Code of conduct, work ethic, & work hours
» Operating environments

Organization Communication
» Organization Communication
» Project management success is highly dependent on an effective
organizational communication style.
» Existing communication culture will impacts projects
» Electronic Communication
» E-mail
» Texting (text chatting); Instant messaging (SMS)
» Telephone / Fax
» Social media
» Video and web conferencing

» Organizational structures and governance affects/determines:
» It define a hierarchy within an organization.
» It identifies each job, its function & where it reports to.
» It determines how information flows in the company.
» How much authority the project manager has
» What resources will be available
» How the project will be conducted
» Organization Types
» Functional
» Project-oriented
» Matrix (Week, Strong, Balanced)
» Composite
Organization Type - Functional
» Functional Organization

» In functional Organization
» Project Expeditor
» Staff assistant
» Communication Coordinator
» Can not make or enforce decisions
» Project Coordinator
» Similar to Project Expeditor.
» Some power & authority to make decisions
» Reports to higher level managers

Advantages Disadvantages
Highly specialized expertise. Easier More emphasis of functional specialty,
management of specialists result in harming project.
Resource grouping by specialties Difficulty in balancing project versus
Clear reporting relationships. Team real work.
member reports to one supervisor. Slow in delivering outcome.
Well defined career path. PM has little of no authority.
No career path in project
management.

Organization Type - Project-oriented
» Project-oriented Organization

Organization Type - Project-oriented
New work /enhancement is organized No home
by Projects Duplication of work & facilitates
PM gets resources from different In-efficient resource utilization.
functions & can hire its own
Project isolation
Team works only on project work
Projectitis
PM has its own full time support staff
PM has full control on budget &
Resources, Fully responsible for
outcome.
Communication is vertical.

Organization Type - Matrix
» Matrix Organization: Strong, Weak, Balanced
• * Tight Matrix:
has nothing to do
with a matrix
organization



Efficient resource sharing Power struggle between PM &
Flexible & Dynamic Functional Manager
Focused on Project Goals Groupities

Easy team member reassignment Excessive Overhead
• How to overcome disadvantages of matrix structure ?

Organization Type - Composite
» Composite Organization
 Very effective resource
utilization
 High flexibility in
meeting requirements

Organization Type
» PM Relative Authority in Organizational Structures
PM Power/ Authority

Organization Type
» PM Relative Authority in Organizational Structures

Project Management
Principles
1. Be a diligent, respectful and caring steward
2. Recognize, evaluate and respond to system
interactions
3. Navigate complexity
4. Create a collaborative project team environment
5. Demonstrate leadership behaviors
6. Optimize risk responses
7. Effectively engage with stakeholders
8. Tailor based on context
9. Embrace adaptability and resiliency
10. Focus on value
11. Build quality into processes and deliverables
12. Enable change to achieve the envisioned future state
From Principles to Performance Domains
» Use the 12 principles to guide
behavior in the 8 project
performance domains

Agile
Agile and Charateristics
Agile Manifesto (4)
Agile Principles (12)
Being Agile NOT Doing Agile
Key Success Factors

Why should we use Agile?

Introduction to Agile
• Agile software
development is an
umbrella term for a set of
frameworks and practices
based on the values and
principles expressed in
the Manifesto for Agile
Software
Development and the 12
Principles behind it.

Agile characteristics
• Iterative and incremental
• Self-organizing and Cross-functional team



Agile Manifesto
1. The format A over B
- Intention, focus and effort
- Value based, people engagement
2. NOT Do A instead of B

Being Agile vs Doing Agile
“Doing” Agile
“Being” Agile An ineffective way to
The correct way to implement agile
implement agile
Doing Agile involves

Being Agile starts using agile practices
with internalizing withourt embracing
agile mindset, then the agile mindset
using that that allows us to
understanding to understand how to
select and implement select the right
the correct practices, balance of practices
taloring them to and tailor them
different situations as appropriately
needed

Key success factors
Agile means:
•Iterations are likely to be shorter
•Product is more likely to evolve based on stakeholder feedback
•Still used for software development, and agile principles have
been applied to other kinds of development projects, vis-à-vis the
agile mindset.
•Adopt a flexible, change-friendly way of thinking and behaving
•Understand the purpose of these practices
•Select and implement appropriate practices based on context
•Internalize agile values, mindset and behavior
Because each project is unique, we adapt methods to the
unique project context to determine the most appropriate
ways of working to produce the desired outcomes.
Tailor iteratively and continuously throughout the project

Key success factors (2)
Tailoring the development approaches: (
hybrid)
• Apply product knowledge, delivery
cadence and awareness of the available
options to select the most appropriate
development approach
• Tailor processes for the selected life
cycle and development approach;
include determining which portions or
elements should be added, modified,
removed, blended, and/or aligned
• Tailor practices and methods to the
environment and culture
Topic B
Strategic Alignment
2/27/2024
Topic Objectives
• Define strategic alignment and
business acumen
• Follow guidelines for effective
business decision-making
• Explore organizational influences
on projects
• Explain how projects align with
broader organizational strategy
and global trends

PMI Talent Triangle®
» The PMI Talent Triangle® reflects the skills needed
by today’s project professionals and
changemakers as they navigate the evolving world
of project management.
» Ways of Working
» Mastering diverse and creative ways (predictive,
adaptive, design thinking) to get any job done
» Power Skills
» The critical interpersonal skills required to apply
influence, inspire change and build relationships
» Business Acumen
» Effective decision-making and understanding of
how projects align with the big picture of broader
organizational strategy and global trends

Strategic Alignment and Business Management Skill

Organizational
Organizational Influences Influences

Organizational Process Asset
 Processes and Procedures  Corporate knowledge base

 Policies  Historical information of projects
 Procedures  Lessons Learnt
 Standard template  Stakeholder Register
 Guideline  Risk Register
HOW we get things

done

Enterprise Environment Factor
• It refer to conditions, not under the control of the project team, that influence,
constraint, or direct the project
External Enterprise Internal Enterprise

 Government regulation  Organizational culture
 Market conditions  Type of organizational structure
 Infrastructure  Internal political conditions
 External political conditions  Available resources
 PMIS: Project Management
Information System
WHO are we
and WHAT we
do
EEF -External Business Environment
» Use frameworks or prompts to • In addition, review:
understand external factors that can • Comparative advantage analysis
introduce risk, uncertainty, or provide • Feasibility studies
opportunities and affect the value and
desired outcomes of a project:
• SWOT (strengths, weaknesses,
opportunities and threats) analysis
• PESTLE: Political, economic, socio-
cultural, technical, legal,
• Assumption analysis
environmental • Historical information analysis
• TECOP: Technical, environmental, • Risk alignment with organizational
commercial, operational, political strategy
• VUCA: Volatility, uncertainty,
complexity, ambiguity

EEF - Internal Business Environment Factors
» Organizational changes can dramatically impact scope
» The project manager, project sponsor or product owner need to be familiar with
business plans, reorganizations, process changes and other internal activities
» Internal business changes might cause:
• Need for new deliverables
• Reprioritization of value, including removal of existing deliverables

Which are EEFs? Which are OPAs?
1.Economic demand for a new shopping
area
2.Historical society (conservation)
building regulations
3.Local neighborhood demand for a
better town center
4.Archive of past large infrastructure
projects
5.Approved vendor and contractors list
6.Tenant selection process

Topic C
Project Benefits and Value
2/27/2024
Topic Objectives
ECO Coverage
» 3.2 Evaluate and deliver project
benefits and value
• Investigate that benefits are
identified (3.2.1)
• Evaluate delivery options to
deliver value (3.2.4)
» 2.1 Execute project with the
urgency required to deliver
business value
• Assess opportunities to deliver
value incrementally (2.1.1)
Business Value
» Why initiate project:
» Business value: benefit that project brings to its stakeholder, can be tangible
or intangible
» Change: project moves an organization from one state to another state in
order to achieve a specific objective
» Types of Business Value
Is consider the reason that project’s are authorized/ initiated
» Marketing Demand (first to market)
» Strategic & business need (financial Gain)
» Social needs/ Benefits
» Customer request
» Legal Requirements/Regularization
» Improvement (technology changes, process improvement)

Business Value – Considerations
» Communicate with stakeholders, do the research and use expert knowledge
» Examine, evaluate and confirm to determine exactly what is or can be of value!
» Look especially at:
» Shareholder value—(publicly traded companies)in a publicly traded
company, the part of capitalization that is equity as opposed to debt; for
example, the number of outstanding shares multiplied by the current share
price. Or business growth (private)
» Customer value—the value received by the customer of a product or service.
» Employee knowledge—an asset of the business, a frequently overlooked
component of business value.
» Channel partner value—the value of a business’s partners.

Feasibility Analysis - Obtain Data for the Project
» Usually performed by a business analyst
» Precedes the business case, Involves understanding of:
• Business goals and objectives
• Issues and opportunities
» Recommends proposals to address:
• What should be done
• Constraints, assumptions, risks and dependencies
• Success measures
• Implementation approach
• Business Needs documents:
• Business case: Describes requirements — what needs creating and/or performing.
Acceptance of the business case usually leads to creation of the project charter.
• Benefit management plan – How to implement the business case
Business Case
» A documented economic feasibility study used to establish validity of
the benefits of a selected project
» Used as a basis for the authorization of further project management
activities.
» It describes necessary information from a business standpoint to
determine whether project is worth investment.
» Written by
» Project initiator
» Sponsor
» Stakeholder

Business Case
» It contains
» Business background
» Business Benefits
» Assumption & Constraints
» GAP analysis, Cost Benefit analysis
» Expected Cost, ROI
» Identify Business need
» Establishes feasibility
» Establishes business value & importance (Cost-benefit analysis)

Business Case
» Project selection approach
» Benefit measurement methods (Comparative approach)
 Murder board (a panel of people who try to shoot down a new project idea)
 Peer review , Scoring models , & Economic models
• Constrained optimization methods (Mathematical approach)
• Linear programming , Integer programming: Allocating limited resources in
optimal way
• Dynamic programming, Multi-objective programming
• Programming - not referring to computer programing but it means
planning

Business Case
» Project selection approach
» Benefit measurement methods (Comparative approach)
 Murder board (a panel of people who try to shoot down a new project idea)
 Peer review , Scoring models , & Economic models
» Constrained optimization methods (Mathematical approach)
 Linear programming , Integer programming: Allocating limited resources in optimal way
 Dynamic programming, Multi-objective programming
 Programming - not referring to computer programing but it means planning
» Economic models
 Present Value; Net Present Value
 Internal rate of return: Project has the higher the IRR number, the better
 Payback period
o The length of time it takes for the org to recover investment
o Project with the shorter payback period is the best choice
 Cost-benefit analysis
o Project with the higher benefit cost ratio is the best choice
Benefits Management Plan
A benefits management plan is a document that describes how and when the benefits of a
project will be derived and measured. It typically includes the following components:
» Target benefits—the expected tangible and intangible business value to be realized from the
project.
» Strategic alignment—how the benefits align with the business strategies of the organization.
» Timeframe—when the benefits (short-term and long-term) will be realized, usually by project
» phase.
» Benefits owner—the person or group that monitors, records, and reports the benefits.
» Metrics—the direct and indirect measurements of the realized benefits.
» Assumptions, constraints and risks—the risks associated with achieving the targeted
benefits.
» This plan is prepared before the project is initiated, and it is referenced after the project has
been completed. It is not a subsidiary component of the project management plan, but
instead is a business document.
OKRs Help Deliver Business Value
• Start with organizational objectives
• Decide key desired results
• Refine further with objectives and key results (OKRs):
• Objectives are goals and intents
• Key results are time-bound and measurable milestones under these goals and
intents
• OKR best practices:
• Support each objective with between 3-5 measurable key results
• Aim for 70% success rate to encourage competitive goal-making. A 100%
success rate should be re-evaluated as not challenging enough
• Write OKRs that are action-oriented and inspirational and include concrete,
measurable outcomes

Business Value - Incremental Value Delivery
» An incremental development approach can:
• Enable value delivery sooner
• Attain higher customer value and increased market share
• Allow partial delivery (or previews) to customers
• Enable early feedback, allowing for adjustments to the direction, priorities and
quality of the product

Business Value - Summary
Project Selection Investment Appraisal
Short lists » Payback period/Breakeven analysis
» Feasibility analysis » Depreciation
» Murder board (shoot down a new project » Present value (PV)
idea) • PV = FV/(1 + r)n
» Peer review » PV: Present value
» Scoring models » FV: Future value
Benefit Cost analysis » r: interest rate (discount rate)
» n: number of time periods
» Benefit Cost Ratio (BCR)
» Net present value (NPV)
» Opportunity Cost
• NPV = PV of Income – PV of Cost
» Sunk Costs
» Internal Rate of Return (IRR)
» Return on Investment (ROI)
Business Value – Summary (2)
Project Selection with economic models
» Benefit cost analysis: bigger BCR is better (lower CBR is better)
» Payback period: shorter is better
» Present value: bigger is better
» Net present value >0 project is profitable, greatest NPV is typically selected
» Return on investment: higher ROI is better
» Internal rate of return: higher IRR number is better
87
» Opportunity cost
» This term refers to the opportunity given by selecting one project over
another
» The opportunity cost is the value of the project not selected
» Sunk cost
» Sunk costs are expended costs. It should not be considered when deciding
whether to continue with a troubled project
88
» Depreciation
1 Straight Line Depreciation
» In the straight line depreciation method, the same value is depreciated from
the investment every year.
2 Accelerated Depreciation
2.1 Double-declining-balance Method
» 1st: calculate straight-line depreciation rate.
» 2nd: double of that rate, this percentage is then used in the double-declining
balance method.
2.2 Sum-of-Years' Digits Method
» 1st: determine the years' digits (n, n – 1, …, 1),
» 2nd: then calculate the sum of the digits: s = n*(n+1)/2.
» 3rd : the depreciation rates are as follows: 1st year: n/s; 2nd year: (n-1)/s ….;
n(th) year: 1/s. 89
Depreciation sample

Mean – Mode -..

Mean – Mode - .. samples
» 12 - 11 - 15 - 78 - 89 -12 – 99 - 11
» MEAN: averge(12 - 11 - 15 - 78 - 89 -12 – 99

» MODE:
» -> rang of 7 (12 - 11 - 15 - 78 - 89 -12 – 99)-> Mode 12
» -> Range of 8 (12 - 11 - 15 - 78 - 89 -12 – 99 -11)-> Mode: 12, 11
» MEDIAN:
» -> range of 7(12 - 11 - 15 - 78 - 89 -12 – 99)-> 11 12 12 15 78 89 99 Median:
15
» Range of 8 (12 - 11 - 15 - 78 - 89 -12 – 99-11) -> 11 11 12 12 15 78 89 99 ->
Median: (12+15)/2

Topic D
Organizational Culture and Change Management
2/27/2024
Topic Objectives
ECO Coverage
» 3.4 Support organizational change
• Assess organizational culture
(3.4.1)
• Evaluate impact of organization
change to project, and
determine required actions
(3.4.2)
• Evaluate impact of the project
to the organization and
determine required actions
(3.4.3)

Change Management
•Organizations embrace change as a
strategy.
•PMOs build and sustain alignment
between projects and the
organization.
•Whether your organization has a
PMO or not, you are a
“changemaker”!
• Tailor a strategy to
circumstances, people and
timing
• Use a robust approach

Manage Organizational Change Impacts on Projects
» Assess organizational culture
» Evaluate impact of organizational
change to project and determine
required actions
» Recommend options for changes
to project
» Continually monitor external
business environment for impacts
to project scope/backlog

Get to Know Organizational Cultures and Styles
• View of leadership, hierarchy and

authority
• Shared vision, beliefs and expectations
• Diversity, equity and inclusion practices
• Risk tolerance
• Regulations, policies and procedures
• Code of conduct
• Operating environments
• Motivation and reward systems

Get to Know Organizational Cultures and Styles (2)
» Risk threshold and appetite are shaped by

diverse values of:
» Country/region
» Industry/sector
» Leadership
» Project team
» These must be understood with care to:
» Establish effective approaches for
initiating and planning projects
» Identify the accepted means forgetting
work done

Change Management Framework
“Organizational change requires individual

change”
The ADKAR® model names five milestones an
individual must achieve in order to change
successfully:
• A – Awareness of the need for change
• D – Desire to support the change
• K – Knowledge of how to change
• A – Ability to demonstrate new skills and
behaviors
• R – Reinforcement to make the change stick

Change Management Framework – Key success factors
DO DON’T
• Coach co-workers to support the » Force changes – Involve and consult;
business — patience and aim to secure buy-in to the reasons
compassionate mentoring are key for change
• Enable an agile operating system - » • Alienate resisters – Change can
Coach team members in agile to breed conflict, so proceed carefully
facilitate adoption of a change-
centered mindset
• Keep knowledge current –
Continuously improve processes and
knowledge

Plan for Change
» Define the knowledge transfer, training and readiness activities required to
implement the change brought by the project
• Include an attitudinal survey to find out how people are feeling
• Create an informational campaign to familiarize people with changes
• Be open and transparent about potential effects of the changes
• Consider creating a rollout plan

Topic E
Project Governance
2/27/2024
Topic Objectives
ECO Coverage
» 2.14 Establish project
governance structure
• Determine appropriate governance
for a project (e.g., replicate
organization governance) (2.14.1)
• Define escalation paths and
thresholds (2.14.2)

Project Governance
» The framework, functions, and
processes that guide project
management activities to create a
unique product, service, or result to
meet organizational, strategic, and
operational goals.
» Key benefits:
• Offers a single point of
accountability
• Encompasses the project life cycle
Governance type differs among

organizations and projects.
Project Governance - What Kind and How Much?

Project Governance – Components
Processes for: • Stage gate or phase reviews
• Change • Guidelines for aligning project
• Communication governance and organizational strategy
• Documentation—e.g., project • Project life cycle and development

management plan approach
• Decision-making • Project organization chart with roles

• Internal stakeholder alignment with • Project success and deliverable
project process requirements acceptance criteria
• Review and approval of changes above • Relationship among project team,

project manager authority level organizational groups, and external
stakeholders
• Risk and issue identification, escalation,
and resolution
Governance in Adaptive Projects
• Document outputs and expectations.
• Provide a clear view of project status from:
• Defined iteration/sprint expectations and outputs
• Releases tied to specific dates
• “Real-time” monitoring of project output through daily standups
• Iterative approaches enable quicker and less costly identification of value-based
outputs than predictive
» Governance Board aka Project Board or Steering Committee
» Provides project oversight
» May include project sponsor, senior managers and PMO resources
» May be responsible for:
» Reviewing key deliverables
» Providing guidance for project decisions
Governance Defines Escalation Procedures

Governance and Life Cycles - A Systems View
» Governance system works alongside the value delivery system — the project life cycle.
» Why? To enable smooth workflows, manage issues and support decision making.
» Governance Checkpoints: Phase Gates and Iterations

Topic F
Project Compliance
2/27/2024
Topic Objectives
ECO Coverage
» 3.1 Plan and manage project
compliance
• Confirm project compliance
requirements (e.g., security, health
and safety, regulatory compliance
(3.1.1)
• Classify compliance categories
(3.1.2)
• Analyze the consequences of non-
compliance (3.1.5)

Compliance
» Internal and external standards include:
• Government regulations
• Corporate policies
• Product and project quality
• Project risk
» PMO monitors compliance at organizational level
» Project team is also responsible for project activity-related compliance, including:
• Quality of processes and deliverables/products
• Procurement and work by vendors

Compliance Requirements
» Legal or regulatory constraints include:
» Requirements for specific practices
» Standards
» Privacy laws
» Handling of sensitive information
» Quality: Tailor to your project — How much process rigor and quality control is
relevant?

Compliance Categories Classification
» Categories can be based on:
• Environmental risks
• Workplace health and safety
• Ethical/noncorrupt practices
• Social responsibility
• Quality
• Process risks
» Categories vary based on:
• Industry and solution scope
• Unique legal and regulatory exposure

Compliance Threats – how to identify?
• Where/who in the organization handles compliance?
• What legal or regulatory requirement simpact the organization?e.g. workplace
safety, data protection, requirements for professional memberships
• What is the organization’s quality policy?
• Are the team and stakeholders aware of compliance matters?

Consider Compliance as Project Objectives
• Proactively track and manage risks for compliance requirements
• Be prepared to perform quality audits
• Continuously validate legal and regulatory compliance for deliverables
• Check compliance before the end of the project to avoid transferring issues
• In a risk or dedicated compliance register, include:
• The identified risk
• A responsible risk owner
• Impact of a realized risk
• Risk responses
Larger organizations or those in highly regulated industries typically have a

compliance department or officer.
Key success factors
•Documentation: Updated compliance needs
and risks
•Risk planning: Prioritize compliance in risk
planning
•Compliance council: Includes quality/audit
specialists and relevant legal/technical
specialists
•Compliance audit: Formal process
•Compliance stewardship: It’s your
responsibility!

Q&A

Topic A: Foundation
Summary Topic B: Strategic Alignment

LESSON 1
BUSINESS ENVIRONMENT Topic C: Project Benefits and Value
Topic D: Organizational Culture and Change Management
Topic E: Project Governance
Topic F: Project Compliance

Lesson Objectives
Next is..
Table of Topic A: Identify and Engage Stakeholders
content Topic B: Form the Team

LESSON 2
START THE PROJECT
Topic C: Build Shared Understanding
Topic D: Determine Project Approach

Thank You !

Pmpexam-2024 Lesson 1-Business Environment v1.0

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BUSINESS

content Topic B: Strategic Alignment

Topic D: Organizational Culture and Change Management

Topic E: Project Governance

Topic F: Project Compliance

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Project and Project Manager

Project Management Organization (PMO)

Organizational Project Management (OPM)

Program, Portfolio and Operation

Project Life Cycle & Development Approach

Has unique Progressive

Unique (product, service,

Definition Project success depends on:

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• A project is a temporary endeavor undertaken to create unique product,

• The application of knowledge, skills, tool & techniques to project activities to

• The Person assigned by the Performing Organization to lead the team to

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Management Skills Interpersonal Skills

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Reports to Works with

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• Policies, Methodologies, templates and lessons learned. It has low control.

Agile Centers of Excellence (ACoEs) aka Value Delivery Office (VDO)

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» Focuses on project objectives » Manages major program scope changes to

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» Focus on inter-dependencies between projects

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• The application of knowledge, skills, tool & techniques to program

» Not necessarily directly related between

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Organization Culture & Style

Organizational Process Assets (OPA)

Enterprise Environment Factors (EEF)

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