Why is it important to include the stakeholders you identified in the process?

Whether internal or external, all of the projects that you manage have stakeholders. One of the main reasons projects fail is because the deliverables were not what the customer wanted or they did not meet the customer’s needs. To ensure project success, it helps that you know all of the key stakeholders on your project, how they prefer to communicate, what their needs are, and what the acceptable end results are.

Engaging stakeholders during—and especially at the beginning of—your project will help reduce and uncover risks and increase their “buy-in.” When stakeholders are adequately engaged, their influence spreads far and wide. Some of the ways stakeholders are important to a project are as follows.

1. Providing Expertise
Stakeholders are a wealth of knowledge about current processes, historical information, and industry insight. Many times these team members will have been at the company or on the project longer than the project manager or project team. It’s important to involve all key stakeholders when gathering and documenting requirements to avoid missing major deliverables of the project. Project managers, or others who are in charge of deliverables, may not be experts on every project. Key stakeholders can provide requirements or constraints based on information from their industry that will be important to have when understanding project constraints and risks.

2. Reducing and Uncovering Risk
The more you engage and involve stakeholders, the more you will reduce and uncover risks on your project. When discussing initial requirements, project needs, and constraints, stakeholders may bring up issues or concerns about meeting those things. Uncovering risks and then discussing a plan to mitigate them before issues arise will dramatically increase the success of your project. Involving knowledgeable stakeholders during this process will help.

3. Increasing Project Success
By gathering and reviewing project requirements with stakeholders, you will get their “buy-in,” which will in turn help increase project success. If you can’t meet stakeholders’ needs, due to conflicting needs or priorities, set expectations early in the project life cycle. This will help you manage the relationship throughout the project instead of there being surprises at the end. Stakeholders should always be aware of the project scope, key milestones, and when they will be expected to review any deliverables prior to final acceptance.

4. Granting Project Acceptance
The more regularly you engage and involve stakeholders from the start, the more likely you will have a positive project conclusion. By the end of the project, the team members should have already been aware of delivery expectations, risks, and how to mitigate the risks. They also should have reviewed draft deliverables along the way. This process should help avoid any surprises at the end of your project. The final acceptance is just their final stamp of approval during the project closure phase.

Make sure that you consider all key stakeholders as a part of your project team. They all will bring value and expertise to help ensure your project is a success!

Who are Project Stakeholders?

It’s beneficial and advisable to know about good stakeholder management skills and communicate constantly with stakeholders in order to collaborate on the project because after all, they are also affected by the product.

If a project is small in size, the number of stakeholders can be small. However, if it is large and expanded to a large area, one may have a huge number of stakeholders, including communities or the general public. Also, all stakeholders are not alike. They have different expectations and needs. One must treat every stakeholder uniquely according to their needs or else the stakeholders might feel left out which can put the project in danger.

Different stakeholders often have opposing expectations that might create clashes within the project. Stakeholders may also interfere in the project, its deliverables, and the project team to fulfill their strategic business objectives or other requirements.

Project Governance

Project governance is the alignment of the project with stakeholders’ needs or objectives. It is critical for achieving organizational goals. enabling organizations to manage projects consistently and exploit the benefits of a project. It also provides a framework that helps the project manager and sponsors to make decisions that suit both stakeholder needs and organizational objectives or deal with situations where they may not be aligned.

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Type of Project Stakeholders

Project stakeholders can be classified into two types: 

• Internal Stakeholders 
• External Stakeholders

Internal Stakeholders

As the name suggests, these are the people involved in a project from within. They include:

• A sponsor
• An internal customer or client (if the project started due to an internal need of the organization)
• A project team
• A program or portfolio manager
• Management
• Another team’s manager of the company

External Stakeholders 

These stakeholders are not directly involved but are engaged from outside and are affected by the project outcome.

• An external customer or client (if the project started due to a contract from an external party)
• An end-user
• Subcontractors
• A supplier
• The government
• Local communities
• Media

Why Are Stakeholders Important for a Project? 

• Stakeholders have different levels of duties and authority when contributing to a project. This level may differ as to the project proceeds. It can range from occasional contributions to full project sponsorship.
• Some of them may also detract from the success of the project, either actively or passively. These stakeholders need the project manager’s attention during the whole time of the project’s life cycle.
• Stakeholder identification is a continuous process during the entire project life cycle. Identifying them, understanding their level of effect on a project, and satisfying their demands, needs, and expectations are essential for the success of the project.
• Just as they can affect a project’s objectives positively or negatively, a project can be perceived by the stakeholders as having positive or negative results.
• One of the most important responsibilities of a project manager is to manage stakeholder expectations, which can be problematic as stakeholders often have very diverse or conflicting objectives.

Examples of Project Stakeholders in a Project

• Sponsor: A sponsor is a person or group who provides supplies and support for the project and is liable for assisting success. He may be external or internal to the organization.
• Customers and Users: Customers are the people or organizations who will approve and manage the project’s product, service, or result. Users, as clear from the name, use the product.
• Sellers: Sellers, also known as vendors, are external companies that enter into a contractual agreement to provide services or resources necessary for the project.
• Business Partners: They are external organizations that have a special relationship or partnership with the enterprise.
• Organizational Groups: Organizational groups are internal stakeholders who are influenced by the actions of the project team. For example, human resources, marketing, sales, legal, finance, operations, manufacturing, etc.
• Functional Managers: They are key individuals who play the role of management within an administrative or functional area of the business. For example, human resources, finance, accounting, etc.
• Other Stakeholders: They are additional stakeholders which include financial institutions, government regulators, subject matter experts, consultants, and others, which have a financial interest in the project, contributing inputs to the project, or have in the outcome of the project.

Roles of a Stakeholder

Stakeholders are important to an organization because they consist of everyone in the organization that you need to deliver the required services to. If the people in charge are clear regarding who are the stakeholders of their IT services, they will be able to effectively define roles, responsibilities of supporting organizations, process, and the management of interfaces between different roles and processes.

The main roles played by the stakeholders, that highlight their importance are:

1. Defining the Service
   
   It is the duty of service portfolio management to make sure that stakeholders are involved in defining and evaluating the service.
2. Deploying the Service
   
   It is important to keep the stakeholders updated regarding the progress of the service implementation throughout the project. By doing so, stakeholders will be involved in the service setup.
3. Service Operation and Monitoring
   
   The operation activities affect the stakeholders directly. It is thus vital to understand the interests of the stakeholders and their way of utilizing the services to get optimal outputs. By monitoring, we can ensure that service level management, ITSM, and the customer are provided with direct information.

Conclusion

Stakeholders are people who get affected by your project or have any kind of interest in it. They can be internal, external, positive, negative, high power, low power, etc. However, to complete your project successfully you have to manage all these stakeholders and fulfill their prospects. If you fail to do so, your project may get jeopardized. To avoid any shortcomings in your projects, enroll in the PMP certification training program to gain the best project management skills, and to manage projects successfully.  

Know more about project management best practices through Invensis Learning’s Project Management certification training on PMP Certification Course, PMI CAPM Certification Training, Prince2 Foundation and Practitioner Course Online, Project Management Fundamentals, etc.

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Lucy Brown

Lucy Brown has many years of experience in the project management domain and has helped many organizations across the Asia Pacific region. Her excellent coordinating capabilities, both inside and outside the organization, ensures that all projects are completed on time, adhering to clients' requirements. She possesses extensive expertise in developing project scope, objectives, and coordinating efforts with other teams in completing a project. As a project management practitioner, she also possesses domain proficiency in Project Management best practices in PMP and Change Management. Lucy is involved in creating a robust project plan and keep tabs on the project throughout its lifecycle. She provides unmatched value and customized services to clients and has helped them to achieve tremendous ROI.

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