Project Initiation

The following are the important themes from the PMI Perspective that you need to remember about the Project Initiation Phase.

1. Project Initiation is the first logical step in Project Management process
2. Initiation formally authorizes a project to begin or to continue to the next phase.
3. Initiation formally links a project to the work to the strategic objectives of the organization.
4. Someone external to the project team and higher up in the organization must issue the project charter. (Usually the Sponsor)
5. The project charter gives the project manager authority to “get the job done.” Yes, you read it right. The Charter is the document that officially gives us the right to do our jobs to manage the Project.
6. The project charter establishes the targets for the project.
7. A signed contract can serve as an input or predecessor to a project charter. Sometimes for small projects, the contract itself can be considered the Charter.
8. The two types of project selection methods are benefit measurement methods and constrained optimization methods.
9. Management by Objectives (MBO) supports project initiation by linking projects to corporate objectives.
10. MBO supports project management through its use of goal-setting and periodic reviews.
11. Many project management activities during initiation are further elaborated during planning.
12. Identifying Stakeholders is one the most important activities in the life of a project. Many a project has been known to fail after months of hard work because the manager failed to identify a critical stakeholder and that stakeholder prevented the sign-off at the end of the Project

Other PMI Themes:

General PMI Themes
Project Framework
Project Planning
Project Execution
Project Monitoring & Controlling
Project Closure
Ethics & Professional Responsibility

Chapter 7: Project Communications Management as part of Project Initiation

Aim: To understand the Processes those are part of Project Communications Management in the Project Initiation Phase. i.e., “Identify Stakeholders”

The only other process in the initiating process group is the identify stakeholders process. Although you might have a preliminary list of interested parties during the development of the project charter, the official identification of stakeholders does not occur until after the project charter is complete. You are only prepared to identify all of the parties affected by the project after reviewing a complete project charter.

Identifying stakeholders is a crucial part of any project. As a project manager, you spend much of your time in the project communicating with stakeholders. It is important that you include every necessary stakeholder to the list and no one else. The identify stakeholders process results in an effective list of stakeholders and a description of how each one is involved in your project.

The table below lists the inputs, the tools and techniques, and the output for the identify stakeholders process.

Develop Project Charter
Inputs	Tools & Techniques	Outputs
Project charter Procurement documents Enterprise environmental factors Organizational process assets	Expert Judgment Stakeholder Analysis	Stakeholder Register Stakeholder Management Strategy

The most noteworthy point for the identify stakeholders process is the stakeholder analysis. This process is far more than just writing down a list of names. In addition to creating a list of stakeholders, you also need to know how much each stakeholder is involved in the project and how much influence each stakeholder can, and will, assert on the project.

Exam Watch:
Do not underestimate the importance of the stakeholder analysis. The exam might have a question that asks you to decide on a course of action that requires knowledge of stakeholder interest and influence. That information comes directly from the identify stakeholder process.

A stakeholder who is very interested in the project and has a lot of influence is apt to demand substantial attention. A stakeholder with little interest or influence should not require as much of your time. Though all stakeholders would need to be informed of the project status and progress, some might require more details than the other. The end user may need to know when the project will be available for use. The same information will be required for your project sponsor but along with this he may ask for resource utilization, budget utilization etc. The point here is that, not all stakeholders may need the same kind of information, even though they are all part of the big family of stakeholders of the project.

Prev: Chapter 6

Next: Chapter 8

Chapter 22: Stakeholder Analysis

In the previous chapter, we saw about how to identify potential stakeholders of a Project. In order to devise a plan as to how to handle/manage a projects stakeholders, the project manager must first analyze them. In this chapter, we are going to learn how this Stakeholder Analysis happens.

So, lets get started!!!

What is Stakeholder Analysis?

Stakeholder analysis is the activity that helps us to gather and analyze information about the stakeholders of a Project.

The 3 major steps in this process are:

1. Identify Stakeholders
2. Assess Stakeholders and
3. Classify Stakeholders

Let us look at them one by one.

Identify Stakeholders:

In this step, we identify all the important characteristics of each of stakeholders that were identified in the previous chapter. The information we capture about them will include:

 Name, department, and role. For example, Dr. John Serri, Vice President, Research and Development.
 Interest in the project. Why should the stakeholder be interested in the project—seeking to benefit or threatened?
 Knowledge level. What is the knowledge level of the stakeholder, especially about the project and in the application area of the project?
 Expectations. What are the expectations of the stakeholder from the project?
 Kind and level of influence. In which way and how much can the stakeholder influence the project?

Assess Stakeholders:

In this step, we make an assessment of how a stakeholder will react to various situations in our project. This will help us prepare to influence them in order to get their support and to better the chances of our projects success.

Classify Stakeholders:

When there are so many stakeholders, it’s important to classify and prioritize the stakeholders in order to manage them efficiently. This will help in efficient use of management efforts, including communication and expectations management.

A simple classification would be whether a stakeholder is a positive or negative stakeholder. Of course, there are other more complex/sophisticated classifications of stakeholders. Some are:

1. Based on Power/Interest Grid: In this model you place the stakeholders on a two-dimensional plot: authority level versus interest level. For example, if a powerful stakeholder has a lot of interest in the project, he is of great priority. If, on the other hand, a stakeholder lacks interest in the project, even if he has a lot of authority; then he potentially will not influence the project that much
2. Based on Power/Involvement Grid: Also called power/influence grid, this model plots the stakeholders in a two-dimensional space: authority level versus involvement in the project.
3. Based on Involvement/Impact Grid: Also called influence/impact grid, this model plots the stakeholders in a two-dimensional space: involvement in the project versus ability to impact the project. For example, a project stakeholder may be highly involved in the project but have no ability to impact the project, such as influence the changes in the project. In that case, this stakeholder is of lower priority compared to the stakeholder who has high involvement and high impact
4. Based on Salience Model: This model classifies stakeholders based on multiple characteristics, such as the ability to impose their will or authority; the urgency of their needs, expectations, or requirements; and the legitimacy of their involvement

Based on the stakeholder analysis, you develop the strategy for managing the stakeholders.

Previous: Identifying Project Stakeholders

Next: Stakeholder Management Strategy

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