Compiled and Prepared in perspective of students dealing with Project Management as subject

1. UNDERSTANDING
STAKEHOLDERS
Presented by,
Somashekar S M
Assistant Professor
Dept. of Mechanical Engg
NHCE
19-11-2019 1
Department of Mechanical Engineering, NHCE

2. Contents
 Objectives
 Introduction
 Identify Stakeholders
 Project Stakeholders
 Potential Stakeholders
 Priority of Stakeholder
 Role of Project Managers in selecting and analysing Stakeholders
 Conclusion
19-11-2019 2Department of Mechanical Engineering, NHCE

3. Objectives
 To build better relationship with project stakeholders.
 To classify stakeholders according to project needs for better understanding of
their requirements.
 To identify and prioritize potential stakeholders.
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4. Introduction: Project Stakeholders
 According to PMBOK, “ project stakeholders are individuals and organizations
that are actively involved in the project, or whose interests may be negatively or
positively affected as a result of project execution or completion; they may also
influence over the projects and its results”.
 Projects are undertaken because someone needs the project’s output. A project must
satisfy its users to be successful.
 Stakeholders include all members of the project team as well as all interested entities
that are internal or external to the organization
 Stakeholders have varying levels of responsibility and authority when participating on
a project. This level can change over the course of the project’s life cycle.
 The following are some examples of project stakeholders:
Sponsors, Customers and users, sellers, business partners, organizational groups,
functional managers and others.
 Stakeholders may have positive or negative influence over a project. Positive
stakeholders would normally benefit for project success, Negative stakeholders who see
negative outcomes from project success.
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5. Contd…..
 Several issues related to stakeholder can complicate project success;
i. There may be multiple users and each may have different wants and needs.
ii. Often users do not fully understand what they want because they do not know
what alternatives may be available.
iii. The customer who pays for the project may not be actual person or group who uses
the result, and customer may not fully understand the user’s needs.
iv. When someone else is paying for the project, some users will ask for many project
outcomes that are expensive or time consuming to deliver.
v. Finally, many stakeholders in addition to the users of project’s outcomes have an
interest in the project.
 Project managers must manage stakeholder expectations, which can be difficult as
often they have different or conflicting objectives.
 Project managers need to first understand their stake holders, build relationships with
them, and then develop communications plan for dealing with them.
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6. Identify Stakeholders
 Identify stakeholders is “the process of identifying all people or organizations
impacted by the project, and documenting relevant information regarding their
interests, involvement, and impact on project success” (PMBOK)
 Stakeholders also include those who are affected by the process of performing the
project. This includes people who:
• Work on the project
• Provide people or resources for the project
• Have their routines disrupted by the project
 Another way to identify stakeholders is to determine whether they are internal to
the organization performing the project or external to it.
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7. Project Stakeholders
PROJECT STAKEHOLDERS
INTERNAL EXTERNAL
Affected by the Project
Process
Owner
Sponsor
Project Manager
Functional Managers
Competing Projects
Financing Source
Project Core Team
Subject Matter Experts
Employees
Stakeholders
Suppliers
Partners
Creditors
Government Agencies
Special Interest Groups
Neighbors
Client
Professional Groups
Media
Taxpayers
Union
Competitors
Affected by Project Result
Internal Customer
Sponsor
Users
Client
Public
Special Interest Groups
Neighbors
Potential Customers
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Department of Mechanical Engineering, NHCE

8. Contd……
 Note that there are potentially more types of stakeholders affected by the process
of performing the project than by the project results and more external than
internal stakeholders.
 Project managers and project core teams can use the examples as shown in the
table to identify possible project stakeholders.
 This stakeholder analysis can be conducted as a brainstorming session.
 For each potential stakeholder, list the various project processes and results in
which he or she might have an interest by considering both financial and
emotional interests of potential stakeholders.
 Once the stakeholder and their interests have been listed, they may be combined
into like groups with the same interests.
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9. Potential Stakeholders
 Prioritization is important because on many projects there are too many
stakeholders to spend a great deal of time with each.
 While it is important not to ignore any stakeholder, it also make sense to
concentrate on those who are most vital.
 Bourne and Walker developed a method that requires the project core team to
determine three aspects in prioritizing stakeholders.
 All three aspects can be rated on simple scale of 1 to 3, with 3 representing the
highest priority.
 For the first aspect, proximity, a stakeholder who has significant direct
contact with the project team would be a 3, while a much more remote
stakeholder would be a 1.
 For the second aspect, power, a stakeholder who could order the project shut
down or changed in a major way could be 3, and a stakeholder who could not
change the project much would be 1.
 For the third aspect, urgency, a stakeholder with great time sensitivity would
be a 3, and a stakeholder with only routine time needs would be a 1.
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Department of Mechanical Engineering, NHCE

10. 
STAKEHOLDER IDENTIFICATION AND PRIORITIZATION MATRIX
PRIORITY OF STAKEHOLDER
Stakeholder: Interested in Project
Process or Result (Be specific)
Proximity Power Urgency Total
Priority of Stakeholder
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Department of Mechanical Engineering, NHCE

11. Role of Project Managers in selecting and
analysing Stakeholders
 By determining who the stakeholders are and what each group wants, project
managers effectively:
• Select clear direction for further project planning, negotiating, and execution
• Prioritize among competing objectives
• Learn to recognize complex trade-off's and the consequences of each.
• Make and facilitate necessary decisions.
• Develop a shared sense of risk.
• Build a strong relationship with their customers
• Lead associates, customers, and suppliers with an empowering style
• Serve as good stewards of the resources of both the parent and customer
organizations.
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12. Conclusion
 The project team should next select the top 10 to 15 stakeholders for emphasis in
the remainder of their planning.
 The stakeholders with the highest total scores are often considered to be primary
influencers for the project.
 The project manager and core team should also plan to periodically review this
prioritized list of stakeholders, as the relative importance may change as the
project progresses, especially if the project goals are not clear at the outset.
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13. References
 Project Management, Timothy J Kloppenborg, Cengage Learning, Edition 2009.
ISBN 978-81-315-1871-7
 Project Management a System approach to Planning Scheduling & Controlling,
Harold Kerzner, CBS Publishers and Distributors.2002. ISBN: 81-239-0867-9
 PMBOK Guide 3rd, 4th and 5th editions
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14. THANK YOU
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