What Is a Stakeholder in Project Management?

Types of Stakeholders

Stakeholders in a project can be broadly classified into two main types: internal and external stakeholders.

Internal Stakeholders

Internal stakeholders are individuals or groups within the organization that are directly involved in the project or whose work is affected by the project. Some examples of internal stakeholders are:

• Project team members: project manager, project sponsor, project coordinator, business analysts, developers, testers, etc.
• Senior management and executives
• Employees whose jobs may be impacted by the project
• Other departments or teams that are impacted by the project outcomes

External Stakeholders

External stakeholders are the individuals who don’t work for the organization that is managing the project. Some examples of external stakeholders are:

• Customers or clients
• Suppliers or vendors
• Partners or collaborators
• Government agencies or regulatory bodies
• Community groups or local residents
• Shareholders or investors

The categorization of stakeholders as internal or external is not always clear-cut, and there may be stakeholders that have overlapping roles or interests. It is important for project managers to identify and engage with all relevant stakeholders, regardless of their type, to ensure project success.

Identifying Key Project Stakeholders

Identifying key stakeholders is an essential part of stakeholder management in project management. Here are some steps to help identify key stakeholders:

• Identify all potential stakeholders: Begin by identifying all potential stakeholders who the project could impact. This may include individuals, groups, or organizations that could be affected by the project’s outcomes, such as customers, suppliers, regulatory bodies, and community groups.
• Determine stakeholders’ interests and expectations: Once you have identified all potential stakeholders, determine their interests, expectations, and concerns related to the project. This can be done through stakeholder analysis, which involves gathering and analyzing data about the stakeholders.
• Prioritize stakeholders: Prioritize stakeholders based on their level of influence, interest, and impact on the project. Stakeholders with high levels of influence and impact on the project should be given higher priority.

Stakeholders’ Roles and Responsibilities can vary depending on their relationship with the organization and their level of investment or interest in the project or business. Below are some common roles and responsibilities of stakeholders.

The Sponsor

The sponsor is the money bags, so to speak. They are the person or group who has the financial resources to make a project happen. They may be an individual, corporation, or government agency.

Their role is to ensure that the project has adequate resources to complete its objectives within its scope.

Project Manager

The role of a project manager in project management is to plan, organize, and oversee the execution of a project from start to finish. The project manager is responsible for ensuring that the project is completed on schedule, within budget, and to the stakeholders’ satisfaction.

The project manager has a variety of responsibilities, which include:

• Defining the scope of the project
• Developing the project plan
• Allocating resources
• Managing project risks
• Monitoring progress
• Communicating with stakeholders
• Managing the project team
• Ensuring quality

Project Team

A project team is a group of individuals who are responsible for planning, executing, and delivering a project. The team is typically made up of a diverse group of professionals who have the necessary skills, expertise, and knowledge to complete the project successfully. The size and composition of the project team can vary depending on the scope and complexity of the project.

The project team can include the following members:

1. Project manager: The project manager is the leader of the project team and is in charge of overseeing the planning, execution, and delivery of the project.
2. Subject matter experts: These individuals have specialized knowledge and expertise in a particular area related to the project, such as engineering, finance, or marketing.
3. Project coordinators: Project coordinators are responsible for managing the administrative aspects of the project, such as scheduling, budgeting, and documentation.
4. Designers and developers: These individuals who are responsible for creating the products or services that are part of the project, such as software, websites, or marketing materials.
5. Quality assurance and testing: These are professionals who are responsible for ensuring that the products or services meet the required quality standards and specifications.
6. Technical support: These are individuals who are responsible for providing support and maintenance for the products or services after they have been delivered.

Customer

The customer is anyone who benefits from the project’s outputs. They can be internal or external stakeholders depending on the type of project.

If a project involves creating new products or services for your clients, then they are external customers. If a project involves developing internal systems or processes, then your employees are the customers.

The role of the customer is to provide feedback on the project’s outputs. For example, if a project is developing a new product, then the customer may provide feedback on whether it meets their needs and expectations.

If a project involves creating an application to automate a business process, the customer may provide feedback on how easy or difficult it was to use.

Importance of Stakeholders in Project Management

The importance of stakeholders in project management cannot be overstated, and this is because;

• They provide necessary resources: Stakeholders can provide funding, personnel, equipment, and other essential resources necessary for the success of a project.
• They can influence the project’s direction: Stakeholders have their own objectives and expectations for the project. They can provide valuable input and feedback to help shape the project’s direction.
• They can provide support and motivation: Stakeholders can provide support and motivation to the project team. Their interest and involvement in the project can help to create a sense of urgency and a desire to succeed.
• They can help mitigate risks: Stakeholders can identify and help mitigate potential risks. By involving stakeholders in the risk management process, project managers can better understand potential risks and develop appropriate contingency plans.
• They can provide feedback and evaluation: Stakeholders can provide feedback and evaluation throughout the project’s lifecycle. This feedback can help project managers to adjust the project’s direction and make necessary changes to improve the project’s outcomes.

Communicating and Engaging with Stakeholders

Stakeholder engagement and communication are critical aspects of stakeholder management. It involves developing a stakeholder engagement plan and implementing strategies to engage stakeholders throughout the project lifecycle.

Effective stakeholder engagement can help project managers identify stakeholder needs and expectations, resolve conflicts, and manage stakeholder resistance. It can also help build stakeholder trust and increase stakeholder buy-in.

Strategies for effective stakeholder communication include face-to-face meetings, email, newsletters, phone, and video conferencing.