5.2 Stakeholder Analysis

5.2.1.1  Project Sponsor

The project sponsor is typically the most powerful stakeholder. In our case, CTO is the sponsor. Sponsors have high power and high interest. They are the decision-makers and act as a supervisor and controller of the project. Sponsors often initiate the project by signing off and approving the project charter and authorizing the project manager to form and lead the team, start planning, define the scope, activities, schedule, and risks, and allocate and utilize the budget and resources. A sponsor is the authority superior to the project manager inside the organization and acts as a supervisor and facilitator during the project. A sponsor releases the budget for the team to use for the project activities. If the project client is one of the units of the organization, that is an internal client, the project sponsor also becomes the funder. If the client is outside the organization, this external client becomes the funder while the sponsor should be still inside the organization that is implementing the project. A legal contract is created between the organization (where the project sponsor, project manager, and team are), and the external client (funder). While the contract is a legally binding agreement, we still need a project charter that should be signed by the sponsor who is in our organization where the team resides. The charter should be based on the contract, and it regulates the requirements and resource allocations on the organization’s side. As discussed in Chapter 3 regarding the project charter, the project sponsor can be referred to as the “initiating sponsor.” They have the authority to start and stop the project and will support the achievement of project objectives by removing the barriers to success. They can be regarded as the “external champion” because they often serve as the last escalation point when the project team needs support bringing an off-track project back on track. Successful project teams know how to leverage the power and position of the project sponsor and will proactively ask them to deliver influencing communications throughout the organization in order to maintain the project’s momentum and high morale within the team. Project sponsors can assign one or more sustaining sponsors to act as the “internal champion(s)” of the project. These sponsors are often leaders of the internal departments that are most affected by the project, such as a marketing manager or human resources manager. When the project sponsor selects the sustaining sponsor(s), one of their goals is to ensure that the project team frequently considers the organizational impacts of the changes being introduced. By keeping the sustaining sponsor(s) actively engaged in the project, they will ensure their teams are intently participating in the project and identifying the operational impacts that must be considered in order for the change to be sustained once the project has been completed.

5.2.1.2  Project Manager and Project Team

The project manager and the team members have high power and high interest since they are responsible for conducting all the teamwork and project activities, and they define and sequence activities, estimate their duration, budget, and resources, identify resources and allocate them, identify and manage risks, and monitor and control all project activities. They are those who are held accountable in the first place for the success of the project. Project managers have to deal with stakeholders external to the organization as well as the internal environment, certainly more complex than what a manager in an internal environment faces. For example, suppliers who are late in delivering crucial parts may blow the project schedule. To compound the problem, project managers generally have little or no direct control over any of these stakeholders. Therefore, it is a challenging process for project managers and the team. We will discuss team management in more detail in Chapter 6.

5.2.1.3  Top Management and Steering Committee

Top management may include the president of the company, vice-presidents, directors, division managers, and the corporate operating committee. They direct the strategy and development of the organization. Project managers should have top management support, which means it will be easier to recruit the best staff to carry out the project and acquire needed material and resources. Moreover, visibility can enhance a project manager’s professional standing in the company. On the minus side, failure can be quite dramatic and visible to all, and if the project is large as is in our case and expensive, the cost of failure will be more substantial than for a smaller, less visible project. Therefore, while dealing with top management, project managers should develop in-depth plans and major milestones that must be approved by top management during the planning and design phases of the project. They should ask top management associated with the project for their information reporting needs and frequency. They should also develop a status reporting methodology to be distributed on a scheduled basis, and keep them informed of project risks and potential impacts at all times. In our case study, the steering committee which is composed of top managers and their representatives plays a crucial role during the project.

5.2.1.4  Functional Departments

In our case study, we have functional departments, which are the IT, sales, marketing, and maintenance/repair departments as well as branches all across the USA. In general, central functional units have more authority than the regional offices have. All these units have managers and employees at various hierarchical levels. Among the central units, the IT department is the one that we should work with more closely since the project is directly related to their responsibilities, and most of the human and physical resources we need for the project activities reside in the IT department. Therefore, the IT department has high power and high interest. The project also needs human resources from the sales, marketing, and maintenance departments. We need to consult subject matter experts in these departments. Therefore, these department heads control their resources, and we rely on them. If we have a good relationship with them, they may be able to consistently provide the best staff and the best equipment for our project. Employees from these departments may be in our core team, or they may attend the project activities. Since the booking system directly affects their day-to-day operations, they have a higher interest. However, their power level may not be very high all the time. It may fluctuate from moderately high levels to lower interest levels though it is generally not very low.

5.2.1.5  Internal Customers: Branches and Call Center

The branches in our case, and also the call center, are the internal customers of our project. They will be the end-users of the new ERP module when our individual customers and employers of our organizational customers visit the branches or call the call center to book a vehicle or to talk about another issue related to the booking (e.g., complaints, roadside assistance). These two categories of internal customers are those who hold the power to accept or reject the deliverables of activities and the overall project when completed. However, they are generally represented by their managers, a product owner, or an inspection and acceptance committee who have high power and naturally very high interest. Therefore, we should place them in the quadrant that makes us manage them closely. Early in the relationship, the project manager will need to negotiate, clarify, and document project specifications and deliverables. After the project begins, the project manager must stay tuned in to the customer’s concerns and issues and keep the customer informed. If call center agents don’t find the new system user-friendly and easy to use, they may resist using it. They must be kept informed frequently, and their feedback should be sought especially in critical decisions. Their resistance and dissatisfaction may lead to rework, which may cause the project to have budget overruns and schedule slippages. This is why continuous user involvement and feedback are crucial during the project to minimize the risk of unacceptance.

While dealing with internal customers, the project manager and the team should pay attention to ensuring clarity about what stakeholders, in particular customers, want precisely. This is a part of product and project scope management. Project managers should assign business and/or systems analysts who can elicit requirements utilizing techniques such as surveys, interviews, focus group meetings, workshops, root and cause analysis, and document analysis. Project managers should be aware of any issues regarding the lack of documentation for what is wanted, lack of knowledge of the customer’s organization and operating characteristics, unrealistic deadlines, budgets, or specifications requested by the customer, hesitancy of the customer to sign off on the project or accept responsibility for decisions, and changes in project scope. As explicated in Chapter 3 “Project Initiation” and Chapter 4 “Project Planning”, project managers should address the needs and expectations of stakeholders such as customers, clients, or owners, and be sure to do the following:

• Learn the organization’s organizational structure, culture, buzzwords, and business.
• Clarify all project requirements and specifications in a written agreement.
• Specify a change procedure clearly in change management and configuration management plans.
• Establish the project manager as the focal point of communications in the project organization.

5.2.1.6  External Customers

Providing clarity about what stakeholders want precisely, as explained above for internal customers, is true for external customers too. Business and/or systems analysts should also elicit requirements from external customers by utilizing techniques such as surveys, interviews, focus group meetings, workshops, root and cause analysis, and document analysis. External customers are outside our organization. Therefore, they are within the external stakeholders. In our case, external customers are individual customers (people who rent vehicles for leisure or work) and organizational customers (corporates that rent vehicles based on a contract). When we finalize our project, they can book the rental vehicles on our website and mobile app, call the call center to reserve a vehicle or talk about another issue related to the booking (e.g., complaints, roadside assistance) or they can visit a branch to reserve, pick up or return a rental vehicle. Organizational customers, in general, have a contractual relationship with our company as they regularly and frequently rent vehicles with better prices and conditions. They will be interested in our new booking system since a more effective system helps them have a smoother process with minimum flaws. Most of the individual customers may not be frequent customers. They may pursue lower prices by comparing the prices based on the vehicle type. Therefore, their interest in our new system may not be high most of the time. We can name them as occasional individual customers. However, the customers who rent their vehicles from our company regularly may be interested in our project, and they may be willing to receive newsletters, for example, once every month in their email accounts. The power level for both individual and organizational customers would be low since they don’t have the authority and decision-making authority to significantly affect the course of the project (Figure 5.2).

5.2.1.7  External Stakeholders

In our case, individual customers (see 5.2.1.6), organizational customers (see 5.2.1.6), mobile app stores, insurance companies, travel agencies (including e-commerce agencies), vehicle manufacturers, suppliers, government agencies, and not-for-profit organizations are our external stakeholders.

An important stakeholder group in our case would be two common mobile application stores – Android’s Google Play and Apple’s App Store. Our mobile app developers and testers will use their SDKs (Software Development Kits), and they should authenticate the app before it can be used by the customers on their smartphones. There will be also standards such as regarding privacy and security that we need to comply with. Thus, these two stores will have high power in our project. However, their interest level may not be high as they are not impacted by this project and its outcomes. We should keep them satisfied by complying with their standards, and terms and conditions.

Government and regulatory agencies are generally considered to have high power and low interest if they have an inspection and approval authority in the project. Project managers working in certain heavily regulated environments (e.g., pharmaceutical, banking, or military industries) will have to deal with government regulators and departments. These can include all or some levels of government from municipal, provincial, federal, to international. Besides, constructors are subject to permits and inspections from the local (city and county offices such as Public Works, Fire, and Health Departments) and federal agencies regarding the quality and legal standards they need to adhere to in their constructions (e.g., building permits, fire evacuation plan, fire and smoke equipment, safety). This is why these agencies’ power level is high. In our case, government agencies were listed as the Department of Transportation and the US Environmental Protection Agency. Although these agencies may perform controls and inspections, and release permits for our operations, they may not have power and interest in our booking system. Thus, they are inside the low-power and low-interest quadrant in Figure 5.2. If there is a function or condition that need to be added to our system, and these agencies should approve before we make the system available, then we can include them inside the high-power and low-interest quadrant.

In our booking system project, we also have not-for-profit organizations such as associations that were established to reduce carbon emissions. Similar to government agencies in our case, these organizations may not have power in our project. However, they may have a low or moderate level of interest since the system could include the fuel efficiency rates for each car. In Figure 5.2, they were placed within the low-power and low-interest quadrant.

Insurance companies and travel agencies may be interested in our new booking system since some of them have an ongoing contractual relationship with our company. When a customer wants to rent a vehicle, they can select an insurance plan during their rental time. Travel agencies, and/or travel websites (e.g., Expedia, Priceline) communicate with our company’s system to check the availability of our rental cars. Therefore, both insurance companies and travel agencies may be interested in our project. However, their power level would be at a low level as they don’t have the decision-making authority to affect the project activities.

Another stakeholder would be vehicle manufacturers from which our company, BRCW, purchases the vehicles to rent to the customers. Although they have a high interest in our vehicle portfolio, and they have an ongoing relationship with our company, they may not have a high-level interest in the booking system. Indeed, vehicle manufacturers prefer their vehicles to appear in the booking system with high-quality pictures and accurate technical information. This is why they may have a moderate level of interest in our booking system. They would be willing to see the same look and feel or the picture and information quality available in our current system. Therefore, they were placed in the low-power and high-interest quadrant in Figure 5.2. We can also use the maintenance and service points of these vehicle manufacturers. However, this wouldn’t be related to the booking system.

Another stakeholder, suppliers of vehicle spare parts and consumables for offices at the central units and branches, wouldn’t have a high interest in our booking system. They may have a moderate level of interest in the functions and conditions in our ERP module if spare parts and consumables are included. Neither do they have power in our project. Many projects heavily depend on goods provided by outside suppliers. This is true for example of construction projects where lumber, nails, brick, and mortar come from outside suppliers. If the supplied goods are delivered late or in short supply or of poor quality or if the price is greater than originally quoted, the project may suffer. Therefore, their interest level would be high. However, in our case, their interest level wouldn’t be high. Hence, they were replaced in the low-power and low-interest quadrant in Figure 5.2.

We didn’t include any contractors in our case study. However, there are times when organizations don’t have in-house expertise. Thus, available resources and work is farmed out to contractors or subcontractors for the whole project or some of the activities. In a construction project, these subcontractors may be consultants, electricians, carpenters, and architects. Managing them requires many of the skills needed to manage full-time project team members. We may have problems with them regarding the quality of the work, cost overruns, and schedule slippage.

5.2.2        Case Study 5.2: Grocery LLC’s Mobile-Commerce Project

In Chapter 3 of this textbook, we created a project charter in the initiation phase of Grocery LLC’s mobile e-commerce project. The stakeholders specified in this charter under “9. Key Stakeholder List” are below. Besides, project team members who are indicated under “12. Project Team” in Chapter 3 have been included in the list below.

1. Project manager (Senior Systems Analyst)
2. Project team members (The core team)
   1. Project manager: Senior systems analyst
   2. Two systems (business) analysts
   3. Two UI/UX designers
   4. Three developers (including Android and IOS developers, and the backend developer)
   5. Two testers (quality assurance engineers)
   6. Two sales and marketing experts
3. Project sponsor (Chief Operations Officer – COO)
4. Product owner (The representative from the operational department who was assigned by the COO)
5. IT Department
6. Sales Department
7. Marketing Department
8. HR Department
9. Store managers and employees
10. Suppliers
11. Online customers
12. Customers who visit the stores in person
13. Government agencies that announce the pandemic restrictions
14. Google Play and App Store for the mobile application

The stakeholders have been placed on the grid as illustrated in Figure 5.3. Different from Figure 5.2, this grid shows each stakeholder with dots inside their quadrants. We should always keep in mind that the location of each dot should be justified, and they don’t indicate a GPS location so that they provide a comparison of their locations with other stakeholders.

High Power – High Interest Quadrant

We have explained in Case Study 1.1 that the project sponsor, project manager, and project team are placed in this quadrant. The product owner in the m-commerce project of Grocery LLC is a representative from the operational department who was assigned by the COO. This person represents the interests of the internal client, and the priority of the product specification is managed and directed by this person. Therefore, the product owner has a high authority to affect the course of the project, and naturally, their interest is at a very high level from the very beginning to the very end of the project, extending beyond the completion of the project. Let’s assume that two store managers will be assigned to the inspection committee that will assess the performance measures of the mobile application to grant acceptance. In any case, whether they are at the committee or not, store managers are directly affected by the activities and outcome of this project. Finally, the IT Department will be the main functional unit that will coordinate this project’s technical activities (programming, testing, deployment), and assign systems (business) analysts, UI/UX designers, developers (including Android and IOS developers, and the backend developer), and testers if these human resources are available in this department. If they are not available, the IT department will start a recruitment process through the HR department.

High Power – Low Interest Quadrant

Similar to Case Study 1.1, mobile application stores, Android’s Google Play and Apple’s App Store, would have high power in this project. Developers and testers in this project will use their SDKs (Software Development Kits), and they should authenticate the app before it can be used by the customers on their smartphones. Thus, we should keep them satisfied by complying with their standards, and terms and conditions. During the project, we should keep an eye on the announcements made by the government agencies regarding the pandemic. Modifications or new restrictions may affect the ongoing activities, and challenge the allocation of human and physical resources. The fourth stakeholder in this quadrant would be the HR department. Although the HR department may not have high interest, their power level could be higher due to the fact that the recruitment process should be carried out through them as explained above in the “high power – high interest quadrant”.

Low Power – High Interest Quadrant

As indicated in the “high power – high interest quadrant”, store managers’ interest will be high as their stores will need to manage the online orders. They will also be interested in the features of this application and its store interface since the store employees will need a user-friendly application to process the orders smoothly. Therefore, employees are expected to have a high-level interest in this project. Although both managers’ and employees’ power to influence the project activities and outcomes wouldn’t be high, we can still expect a moderate level of power because of their key role in the process. In the headquarters of Grocery LLC, sales and marketing departments are expected to have a high interest in this project. Actually, both departments will provide human resources directly in the project team. Besides, the mobile application’s content and its marketing tools will be managed by these two departments. Finally, we can place online customers in this quadrant as the end-users of the mobile app. The project team should elicit these stakeholders’ expectations from the app while creating, validating, and finalizing the requirements of the app.

Low power – Low Interest Quadrant

In this case study, we have two stakeholder groups in this quadrant. Suppliers have a key and frequent relationship with the grocery chain. However, their interest would be mostly on the supply chain management system through which they communicate with the chain and the intermediaries to dispatch the items ordered by the stores. Increased sales by means of the mobile app would benefit suppliers. However, the relationship with the grocery chain depends on the agreements and contracts independent of the mobile application. Nevertheless, we can still expect a moderate level of interest in this project. The second stakeholder group in this project would be customers who prefer visiting the stores in person, and hence who don’t think of using the mobile app. Their interest level can be at a minimum level.

5.2.3        Stakeholder Register

In order to have a better picture of stakeholders, we should have a stakeholder register accompanied by the power/interest grid we delineated above. This register should include information about all our stakeholders, both key and those with low interest and low power. Table 5.1 illustrates an example of a stakeholder register based on our case study about a rental vehicle booking system implemented at BRCW.