Lesson 1

Business Environment

 

The Project Management Professional (PMP) examination outline has been updated in 2023. Lessons has been rearranged, and new concepts are introduced. The first Lesson within the 2023 PMP Exam Update is titled Business Environment. This article and mind map reviews the key aspects of Lesson 1.

 

 

All projects operate within a business environment. Sometimes business environment is favorable, sometimes it is not. In any case, projects managers must navigate projects to achieve the project objective that remains aligned to overall business strategy. What is required to meet this twin objective simultaneously is the subject of discussion in this lesson.

 

As business environments change, the adaptability to such changes is required. Projects can be categorized broadly in terms of projects that are undertaken primarily in a plan based as well as in a change-based approach. In both these approaches, the key stakeholders as well as the way deliverable are delivered to customers varies. Adapting the approach accordingly is crucial in terms of completing projects successfully

 

Enabling value creation, projects are managed based on certain underlying principles. These principles form the basis for all decisions and provide guidance for activities that are undertaken to both plan-based and change-based approach to project management. What these principles are and how they are implemented are necessary prerequisites for sustaining value creation in any business environment.

 

To achieve project objectives, project managers need to be in control. They need the authority to decide on human and material resource acquisition and management. However, this authority is impeded when organizational structures do not enable project managers to exert the required authority. 

 

Projects are undertaken to satisfy requirements. Requirements range from clients as well as shifting technological requirements. Being aware of and being able to balance these shifting requirements is a key indicator of project management competency.

 

Aligning these requirements with organizational strategy through implementation of the project is the primary responsibility of project manager. This requires being able to maintain a holistic overview of the big picture of the business environment at the same time manage projects to its successful completion.

 

By adhering to both business environment as well as organizational requirements, strategic alignment with organizational business strategies to deliver business value is sustained over time. This is how project managers contribute towards creating value in the long run for their organizations.

 

In summary, adapting to changing business environments by realigning the approach adopted is an ongoing challenge project manager face. To do so, they need to apply key principles as well as overcome inherent challenges faced. The principles can be broadly categorized as seeking to understand, being proactive, taking necessary action and continuous improvement. Inherent challenges include insufficient authority because of organizational structure as well as shifting technological and client requirements. Only by applying these principles and seeking ways to address these challenges will project managers be able to contribute positively to business strategy.

 

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