Stakeholder Management Archives - Project Management Knowledge Hub

What is a Stakeholder?

According to PMBOK 5th Edition, a stakeholder is an individual, an organization or an entity who will affect, be affected or perceive themselves to be affected by a decision, activity or an outcome of a particular project. Based on the stakeholder category, their interest towards the project and the level of impact they will be exerting on the project or be exerted on them by the project may vary.

It is an essential and a critical requirement to identify necessary stakeholders at the early phases of the project. Once identified, their level of interest, impact and their expectations need to be analyzed with regards to their importance and influential power towards the project. It is important for the project manager to successfully identify all the stakeholders in order to maintain and focus on a good relationship (Refer Stakeholder Management).

If the project is small, then the number of stakeholders is less and if the project is large, then the number of stakeholders is more. In order to manage stakeholders in a large project, it is important for the project manager to maintain a steady communication channel with every stakeholder in order to drive the project towards success.

There are few categories of stakeholders as identified by PMBOK 5th Edition. Among them, Internal and External stakeholders are considered main categories.

Internal Stakeholders

Internal stakeholder are groups or individuals who are working within / internal to the project organization.

Project team
Program / portfolio manager
Sponsor
Client / customer
Management of the project organization

External Stakeholders

External stakeholders are groups or individuals who are external to the project organizations

An external customer
Vendor / Subcontractor
Government
End users of the project outcome

Apart from internal and external categorization, there are few other groupings named upon project stakeholders.

Direct and Indirect stakeholders

Direct stakeholders are concerned with the day-to-day project activities while Indirect stakeholders are concerned with the outcome of the project.

Positive and Negative stakeholders

Positive stakeholders look at the positive vision of the project and they support to drive the project towards success. Negative stakeholders look at the project in a negative manner and they are less likely to support the project.

What is Project Stakeholder Management

Stakeholder can be an individual, a group or an organization that can affect or be affected by a decision, an activity or an outcome of a project. Project Stakeholder Management refers to the processes that identify the above mentioned stakeholders, analyze their expectations and develop management strategies to make them effectively engaged with project execution. It also helps to maintain a continuous communication throughout the entire project life-cycle in order to understand their needs and expectations while managing conflicts and issues. This is considered one of the most important knowledge areas in Project Management. If an important stakeholder or a group is missed through an important communication chain, there’s a higher probability for the project to fail due to miscommunication, invalid info: sharing, etc…

Depending on the stakeholder, the impact or the influence that can be put on the project outcome differs. There are certain stakeholder who can negatively effect on project while some can positively effect. Therefore, it’s very important for a project management team to identify and engage in stakeholder management efficiently in order to drive the project towards success.

There are 4 processes identified under Project Stakeholder Management. They are;

Identify Stakeholder

This process works on identifying individuals, groups or organizations that can impact or be impacted by a project activity, decision or outcome and how their interest, involvement, inter-dependencies potentially impact on project success. Throughout this process, it guides the project manager to identify how important each stakeholder is and focus on them accordingly.

Plan Stakeholder Management

This is another subsidiary plan defined under the Project Management Plan. It drives the project management team to develop management strategies to engage with stakeholder based on their interest, involvement and potential impact towards the project success. In addition, it provides a plan on how to interact with stakeholders on project outcomes.

Manage Stakeholder Engagement

Manage Stakeholder Engagement is the process of engaging with stakeholders to meet their needs and expectations, managing conflicts, addressing their issues and following proper stakeholder engagement strategies throughout the project life cycle. Under this phase, project managers tend to reduce the resistance shown by the stakeholders and get their support to drive the project towards success.

Control Stakeholder Engagement

Under controlling phase, project management team monitors and controls the stakeholder relationships and update the management strategies accordingly. Through this process, it supports the project management team to escalate the effectiveness and efficiency of stakeholder engagement as the project progresses.

Below table shows under which Project Management Process Group the above processes are performed.

Initiating	Planning	Executing	Monitoring and Controlling	Closing
Identify Stakeholders	Plan Stakeholder Management	Manage Stakeholder Engagement	Control Stakeholder Engagement	No Process Performed

**Please note that each and every individual process mentioned above will be explained further separately.