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Monday, May 9, 2011

Chapter 21: Identifying the Project Stakeholders

In the chapter on Project Stakeholders a few chapters back, we had listed down some of the important stakeholders in any project. In this chapter, we are going to look at how exactly we can identify the stakeholders for a project and the rationale behind the whole process of Identifying Stakeholders.

So, lets get started!!!

Who are Project Stakeholders?

I would suggest you go back to the chapter on Project Stakeholders to refresh your understanding of who these people are. But, to summarize in short, Project Stakeholders are individuals & organizations whose interests are affected by the Projects Execution and Completion. A point to note is that, this impact on them could be either positive or negative. To put it simply, they have something to gain or lose depending on the success of the project.

Usually, project managers overlook negative stakeholders which might increase the project risk. Ignoring such negative stakeholders will have a damaging impact on the project. So, it is important that you, as the project manager identify all stakeholders esp. the Negative stakeholders.

Why Identify the Stakeholders?

Identifying all the project stakeholders might be a difficult task, but the obvious ones include the project manager, program manager, portfolio manager, customers and users, project sponsor, project management office, project team, operations management, sellers and business partners, and functional managers. A detailed explanation of all these stakeholders can be viewed here

In addition to these key stakeholders, there can be a number of other less obvious stakeholders inside and outside of your organization. Depending upon the project, these might include investors, sellers, contractors, family members of the project team members, government agencies, media, and even the society as a whole.

It is critical for the success of the project that you identify positive and negative stakeholders early on in the project, understand and analyze their varying and conflicting expectations, and manage those expectations throughout the project.

Identifying the Stakeholders:

The process of identifying stakeholders is a bit complicated and requires careful and cautious effort from the Project Management Team. This activity would include:

1. Identify individuals and organizations that will influence the project and will be impacted by the project.
2. Document relevant information about the individuals and organizations and about their interests and involvement in the project.
3. Document how these individuals and organizations can influence the project and how they can be impacted by the project.
4. Determine their levels of importance.

Let us now look at a picture to understand this process better:

As you can see, there is an input to the stakeholder identification process, it uses a set of tools and techniques and provides an output. This output is our stakeholder document that outlines the stakeholders in the project and the impact (positive or negative) that they might have on the project.

Because identifying and analyzing the stakeholders and managing their expectations and influence is so critical to the success of the project, you should start this task early on in the project.

Let us now take a detailed look at how the whole process of identifying stakeholders happens.

Input to Identifying Stakeholders

As in the picture above, the following entities are the input to the stakeholder identification process.

Project charter

The project charter greatly helps to identify stakeholders by revealing the internal and external individuals and groups who either are directly involved in the project or will potentially be impacted by it. Project sponsors, customers, and departments of the performing organization participating in the project are some examples of stakeholders who can be identified by using the project charter.

Procurement documents

If the project originated from procurement activity, then the procurement documents, such as the contract, will be useful to identify the stakeholders. Even if this project is going to use procurement in order to produce part of its product, the procurement documents will help to identify some (not all) stakeholders, such as sellers and suppliers.

Enterprise environmental factors

Examples of the enterprise environmental factors that help identify stakeholders include governmental and industry standards, organizational cultures, and organizational structure. It’s important to understand the organization’s culture and structure in order to identify some stakeholders and their possible impact on the project, because different people will have different levels of authority and influence under different cultures and structures. More details on Enterprise Environmental Factors can be found in the article “click here

Organizational process assets

The stakeholder register templates and the stakeholder registers from previous projects can be useful to create the stakeholder registers for the current project at hand. Another example of the organizational process assets helpful in identifying stakeholders are the lessons learned from previous projects. All process assets in an organization can found in the Project Management Office (PMO). More details on Organizational Process Assets can be found in this article “click here

Tools and Techniques for Identifying Stakeholders

The tools and techniques used to identify stakeholders include expert judgment and stakeholder analysis. Expert Judgment was discussed in the Previous Chapter and it plays a significant role in identification of stakeholders. Stakeholder Analysis will be covered in the Next. An experienced project manager would put to use all his learnings and expertise and identify all possible stakeholders. Plus you need to conduct lot of meetings to get the necessary inputs to allow you to identify the stakeholders.

Output of Identifying Stakeholders

The output items of the Identify Stakeholders process are the stakeholder register and the stakeholder management strategy.

What is Stakeholder Register?

After your stakeholder analysis and identification, you store all the information about the stakeholders that you identified in a document called the stakeholder register. This information includes:

• Identification - For example, name, location, organizational position, project role and contact information.
• Assessment - Requirements and expectations coming from this stakeholder, the part or the phase of the project that is of most interest to this stakeholder, and assessment of his/her potential influence on the project.
• Classification - There will be a whole array of different kinds of project stakeholders with varied influence. So it’s helpful to classify them by using suitable criteria, such as whether they are internal or external to the performing organization, proponents or opponents of the project, and so on.

The Stakeholder Management Strategy is the plan that you put forth as to how you are going to manage and handle each of the stakeholders. This is something we will be looking in great detail in one of the next chapters.

Note: In PMBOK 4th Edition this process also had an output which was the Stakeholder Management Strategy but that has been removed in the 5th edition. So, the input, tools, output chart above has been updated to remove this

Previous: Developing a Project Charter

Next: Stakeholder Analysis

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