Project Management

Manage Your Stakeholders! The Key to Your Project’s Success!

 

Project stakeholders are individuals and organizations that are actively involved in the project, or whose interests may be affected as a result of project execution or project completion. Take it from me – these are the people you need to pay the most attention to. They need to be identified in your planning – especially in your communication plan.  They may also exert influence over the project’s objectives and outcomes. The project management team must identify the stakeholders, determine their requirements and expectations, and, to the extent possible, manage their influence in relation to the requirements to ensure a successful project. They can make or break a project!

 

Stakeholders have varying levels of responsibility and authority when participating on a project and these can change over the course of the project’s life cycle. Their responsibility and authority range from occasional contributions in surveys and focus groups to full project sponsorship, which includes providing financial and political support. Stakeholders who ignore this responsibility can have a damaging impact on the project objectives.

 

Likewise, project managers who ignore stakeholders can expect a damaging impact on project outcomes. Sometimes, stakeholder identification can be difficult. For example, some would argue that an assembly-line worker whose future employment depends on the outcome of a new product-design project is a stakeholder. Failure to identify a key stakeholder can cause major problems for a project. For example, late recognition that the legal department was a significant stakeholder in a year 2000 rollover (Y2K) software upgrade project caused many additional documentation tasks to be added to the project’s requirements.

 

Stakeholders may have a positive or negative influence on a project. Positive stakeholders are those who would normally benefit from a successful outcome from the project, while negative stakeholders are those who see negative outcomes from the project’s success. For example, business leaders from a community that will benefit from an industrial expansion project may be positive stakeholders because they see economic benefit to them community from the project’s success. Conversely, environmental groups could be negative stakeholders if they view the project as doing harm to the environment. In the case of positive stakeholders, their interests are best served by helping the project succeed, for example, helping the team to acquire the needed permits to proceed. The negative stakeholders’ interest would be better served by impeding the project’s progress by demanding more extensive environmental reviews. Negative stakeholders are often overlooked by the project team at the risk of failing to bring their projects to a successful end.

 

Key stakeholders on every project include:

 

Project manager. This is the person responsible for managing the project.

Customer/user. This refers to the person or organization that will use the project’s product. There may be multiple layers of customers. For example, the customers for a new pharmaceutical product can include the doctors who prescribe it, the patients who take it and the insurers who pay for it. In some application areas, customer and user are synonymous, while in others, customer refers to the entity acquiring the project’s product and users are those who will directly utilize the project’s product.

Performing organization. This refers to the enterprise whose employees are most directly involved in doing the work of the project.

Project team members. This is the group that is performing the work of the project.

Project management team. These are the members of the project team who are directly involved in project management activities.

Sponsor. This is the person or group that provides the financial resources, in cash or in kind, for the project.

Influencers. People or groups that are not directly related to the acquisition or use of the project’s product, but due to an individual’s position in the customer organization or performing organization, can influence, positively or negatively, the course of the project.

PMO. If it exists in the performing organization, the PMO can be a stakeholder if it has direct or indirect responsibility for the outcome of the project. In addition to these key stakeholders, there are many different names and categories of project stakeholders, including internal and external, owners and investors, sellers and contractors, team members and their families, government agencies and media outlets, individual citizens, temporary or permanent lobbying organizations, and society-at-large. The naming or grouping of stakeholders is primarily an aid to identifying which individuals and organizations view themselves as stakeholders. Stakeholder roles and responsibilities can overlap, such as when an engineering firm provides financing for a plant that it is designing. Project managers must manage stakeholder expectations, which can be difficult because stakeholders often have very different or conflicting objectives.

 

For example:

 

The manager of a department that has requested a new management information system may desire low cost, the system architect may emphasize technical excellence, and the programming contractor may be most interested in maximizing its profit.

The vice president of research at an electronics firm may define new product success as state-of-the-art technology, the vice president of manufacturing may define it as world-class practices, and the vice president of marketing may be primarily concerned with the number of new features.

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October 23, 2008 Posted by | Communications Management, Project Management | , | 1 Comment

Using EVM as a Performance Management Methodology

As a performance management methodology, EVM adds some critical practices to the project management process. These practices occur primarily in the areas of project planning and control, and are related to the goal of measuring, analyzing, forecasting, and reporting cost and schedule performance data for evaluation and action by workers, managers, and other key stakeholders.

 

In the planning process, the means for assessing physical work progress and assigning budgetary earned value needs to be established. In addition to routine project management planning, earned value measurement techniques are selected and applied for each work task, based on scope, schedule, and cost considerations.

 

In the project execution process, EVM requires the recording of resource utilization (i.e., labor, materials, and the like) for the work performed within each of the work elements included in the project management plan. In other words, actual costs need to be captured in such a way that permits their comparison with the performance measurement baseline.

 

In the project control process, EVM requires that physical work progress be assessed and budgetary earned value be credited (using the selected earned value measurement techniques), as prescribed in the project management plan. With this earned value data, the planned value data from the performance measurement baseline, and the actual cost data from the project cost tracking system, the project team can perform EVM analysis at the control account and other levels of the project work breakdown structure, and report the EVM results as needed.

 

During the project planning process, EVM requires the establishment of a performance measurement baseline (PMB). This requirement amplifies the importance of project planning principles, especially those related to scope, schedule, and cost. EVM elevates the need for project work to be executable and manageable and for the workers and managers to be held responsible and accountable for the project’s performance. Project work needs to be broken down—using a work breakdown structure—into executable tasks and manageable elements often called control accounts. Either an individual or a team needs to manage each of the work elements. All of the work needs to be assigned to the workforce for execution using an organization breakdown

structure (OBS).

 

In the planning process, the means for assessing physical work progress and assigning budgetary earned value also needs to be established. In addition to routine project management planning, earned value measurement techniques are selected and applied for each work task, based on scope, schedule, and cost considerations.

 

In the project execution process, EVM requires the recording of resource utilization (i.e., labor, materials, and the like) for the work performed within each of the work elements included in the project management plan. In other words, actual costs need to be captured in such a way that permits their comparison with the performance measurement baseline.

 

In the project control process, EVM requires that physical work progress be assessed and budgetary earned value be credited (using the selected earned value measurement techniques), as prescribed in the project management plan. With this earned value data, the planned value data from the performance measurement baseline, and the actual cost data from the project cost tracking system, the project team can perform EVM analysis at the control account and other levels of the project work breakdown structure, and report the EVM results as needed.[1]

 

 

 


[1] ©2005 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA 5

 

October 10, 2008 Posted by | earned value, Performance Management | , , , | 1 Comment