Project context

• The origin of a project lies in the context of

tangible and intangible parameters.
• Social projects are undertaken not necessarily for
the profit but for the benefit of the society
• Whereas, expansion of a manufacturing division
or diversification of the product portfolio may be
directly linked to improved market share and
profitability.
• This contextual reference point must be kept in
mind while executing projects.
• The undertaking of a project is not in vacuum but in
realistic environment which may be a combination of
rational and irrational conjectures.
• The environment are both internal to the company and
external
• Internal: the management, the project manager, the
team, the users, the stakeholders, the sponsor.
• External: Political, ecological, economic, technological,
regulatory etc.
• These environment shape the issues Project
management has to deal with and they can either
assist or restrict in achieving the project objectives.
 PESTLE Analysis
• Projects are undertaken in tune with the
strategic objectives and vision of a company.
• Projects are initiated in a real environment
and the challenge is to work out the strategies
in such a way that the environment becomes
conducive to the project success.
• We carry PESTLE analysis, which enables us to
look at 6 major considerations in a logical and
systematic manner. These parameters are:-
 P- Political
• The initiation of a project may be on logical framework,
but selection and priorities assigned are not always
scientific and free from politics.
• Any enterprise will have some influence of politics but
the level may vary.
• Good and professional companies try to minimize the
politics within the company but are not able to
eliminate it totally.
• Besides politics within the company there are politics
at the state/ centre level. We should not have reality
disconnect of living in a utopian world order where
politics is not associated at all with projects. The
challenge is to recognize it and transform politics in
support of projects
 E- Economic
• Economics is the backbone of undertaking
projects.
• It is projects which provide value addition to the
companies and to the countries.
• The return on investment in a project can only be
achieved by selecting a right project.
• It can also be maximized by completing the
project in time and within the cost.
• Investment appraisals are dealt in business case.
 Economic
• Economic context exists at several levels.
• Micro- economic, Macro-economic and Supra –
macro economic.
• Micro economic context exists at the projects
business case level.
• Accept/reject decisions will be based in the light
of payback criteria or, IRR or NPV considerations.
• In addition , risk management techniques could
be used to asses the likelihood of occurrence of
any particular out-turn.
 Economic
• Macro- economic level exists outside the control
of the project management and sponsor’s team.
It occurs at national fiscal policy level.
• The effects will be manifested in inflation rate,
interest rate, exchange rate and the equity
market.
• Supra macro economic occurs between countries
at geo- political level, such as – tariff barriers,
agreements on extent of local contents in a
project etc.
 Sociological
• Sociological factors may affect the undertaking
of a project.
• If the land is to be vacated by inhabitants for
building a hydro electric project, it is a social
issue.
• Therefore, it is equally important to
appreciate sociological considerations while
evaluating projects.
 Sociological
• Project managers have to demonstrate “buy-in”
and support from the local community. Effective
consultation through exhibitions, workshops,
public meetings can also be used to mobilize
support and clarify opposition from local sources.
• Local community must perceive consultation to
be valuable , which means the project team
needs to listen to the feedback.
• It is almost certain that some of the local
communities aspirations will remain unfulfilled,
so it is vital to inform them why it is so.
 Technical
• Technical consideration in the project context
is fairly well understood.
• One must examine the impact of technological
advancement during the project life cycle.
• Technical issues must be fully resolved as it
could be a major problem if a change is
required on technical plane at a later date.
 Technical
• The PM and sponsor team need to consider
the following:-
– Is it technically feasible?
– Where does the technical expertise reside?
(within or outside the organisation)
– Is the expertise available?
– Does the technical expertise rest with the
competitors?
– Is the project itself intended to develop new
technology?
 Legal
• Legal frameworks are required to resolve any conflicts.
• In a project large no of people are involved, both
within and outside the organization.
• Clarity on legal framework will help project manager to
be clear about the rights of the different stakeholders.
• The regulatory environment itself.
• Consideration of the arrangements with foreign
suppliers
• Determination of applicable laws under which
contractual relationship will be created, executed and
adjudicated by the courts.( local or outside courts)
 Environment
• Undertaking a new project should not cause
ecological degradation.
• Without the proper environment clearance
the projects can not be taken up.
• Also, the implementation of mitigation
measures as given in the environment
clearance must be strictly followed, otherwise
it may strand the project and cause a serious
loss to the company.
 Environment
• The environment context here means the physical
surroundings of the project.
• The PM need to carefully consider where the project is
to be implemented:
-Is it on shore or off shore?
-Is the project sub terrainean?
-Is the project site contaminated?
-Are there special climatic circumstances at site?
-Are there times when the site is too hot or too
cold for site work to proceed?
-Does the project produce or use hazardous
material?