The circumstances and conditions within which the project, programme or portfolio must operate.
The way a project, programme or portfolio is constituted and managed will depend upon many different environmental factors. These must be understood by the P3 sponsor and manager at the outset so that the work is managed in an appropriate manner.
Projects are often delivered by a contracting organisation for a client, while others are managed in-house. In the former situation the contracting organisation is given a specification for an output and its involvement ends with the handover of the completed deliverables.
The contractor’s project may well be a sub-set of the client’s project or programme. In this case the way the work is managed is greatly influenced by the contractual terms agreed at the start of the work.
Major projects or programmes may be beyond the scope of any one organisation. This often requires the creation of joint ventures where the two or more partner organisations seek to achieve common objectives. This can make funding, apportionment of benefits and stakeholder management much more complex.
Projects, programmes and portfolios exist in the public and private sectors and may be for commercial or not-for-profit organisations. This aspect of the environment has a great influence on how risk, innovation and value are perceived.
These are only some of the multitude of factors that make up the P3 environment. Others may include those relating to:
- the commercial sector, i.e. construction, IT, engineering, pharmaceuticals, etc.;
- international work, perhaps with multiple geographical locations and operational languages;
- regulated environments where outputs, outcomes, benefits and the way work is performed must conform to specific standards;
- the public sector and its need for accountability and transparency.
All these factors occur in infinite combinations and each will have a unique effect on the way a project, programme or portfolio is set up and managed.
The P3 sponsor or manager needs to perform an assessment of the environment as early as possible in the life cycle. Of the typical ‘checklists’ that exist to help such an assessment, the most common is PESTLE, which stands for political, economic, sociological, technical, legal and ecological factors.
The assessment should not only consider the effect that the environment has on the project, programme or portfolio. It should also consider the impact of the work on its environment.
As the work progresses, the interactions between the work and its environment will develop and change. The P3 sponsor and manager must monitor this relationship and identify any threats and opportunities that arise.