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Stakeholder Analysis and Management

Stakeholders are important to any project and effective management of these involved stakeholders is absolutely crucial to the successful completion of any project. Stakeholders refer to a person, group, organization, member or system that is impacted by the organization’s actions and managing them throughout the life-cycle of the project is highly important. Stakeholder analysis involves the actions taken in analyzing attitudes of the required stakeholders.

Business Analyst being the liaison among different stakeholders plays very vital role in the management of these involved groups and persons. The stakeholder management is directly proportional to the success of the project. The poorly managed stakeholders always act as negative catalysts in the development of the project and this may lead to the project failing. Stakeholder management results in building coalitions and building potential partnerships among different stakeholders and in turn develops valuable trust.

stakeholders

What is stakeholder?

A stakeholder is anyone who is:

  • Involved in the development of the product
  • Managing the development of the product
  • Working with the product
  • Directly or indirectly involved in rules and regulations of the product usage
  • Owner of the product
  • Affected by the development of the product.

Thus it can be concluded that even a small development may require a list of stakeholders and thus it becomes the responsibility of a business analyst or project manager to identify these stakeholders and analyse their needs and work performed by these groups.

Stakeholder management steps

There are three basic steps which cover the entire stakeholder management process listed below:

  • Identify stakeholders
  • Analyse stakeholders
  • Devise stakeholder management strategies.

It is important for each project that the process of identifying the stakeholders should be complete and accurate as it will be impossible to analyze and derive different strategies to manage these stakeholders without precise identification.

Stakeholder Identification

It is one of the trickiest jobs in the project development process. Stakeholders are broadly classified into following categories:

  • Partners: working with the team in the development of the project. Directly or indirectly influence the growth of the process positively
  • Suppliers: Classified as the third party vendors who work either in outsourced activities or provide support to specific areas e.g. infrastructure management
  • Regulators: Statutory or professional governing bodies who are involved in inspection and regulations
  • Managers: people involved in the management of the development. They are one/two level above the development team in hierarchy.
  • Owners: Classified as the business owners who are mostly responsible for approval of the development of the features and also they finalize the requirements
  • Competitors: they vie with us for the business of our customers and hence very important to be considered in order to maintain the business and trust with the customers.
  • Customers: End users of the product.

 

 Stakeholder Analysis

Once the stakeholders are identified, it becomes important to notice the power and interest of these stakeholders. No stakeholders should be ignored during the management but the approach to each of them is different. Stakeholder analysis specifies how each stakeholder influences the organization, decides what the organization needs from each one of them and rank them with respect to their influence and importance. The stakeholders are analysed on the power versus interest grid and which defines the power of these stakeholders in implementing any changes versus interests of them in order to implement these changes.

 

The above Power versus interest grid was described by Eden and Ackermann in 1998. This grid classifies the stakeholders according to their influence on the organization. Four categories of stakeholders result: players who have both an interest and significant power; subjects who have an interest but little power; context setters who have power but little direct interest; and the crowd which consists of stakeholders with little interest or power. Thus in this way the responsible stakeholders can be managed.


Stakeholder Management Strategies

Different business analysts or project managers follow different strategies for stakeholder management. The strategy describes how the project team will analyze its list of identified stakeholders. Some BAs use power/interest (described above) grid in managing these stakeholders. These strategies are reviewed or revised during the project execution phase.

RACI matrix is widely used to manage the listed stakeholders.

RACI matrix

RACI matrix is very important tool that is used for correct functioning of the process. It is explained below:

Responsible: Person or group involved in getting the work done. They are the individuals who perform the given task.

Accountable: A person who makes the final decision and has ultimate ownership. Typically, the Process Owner is Accountable for a process, and there must be only one Accountable specified for each task or deliverable.

Consulted: A person or group who must be consulted before the decision or action is taken

Informed: A person or group who is informed about the action or decision

RACI matrix is now introduced with a “S” and also known as RASCI matrix in which “S” refers to Support and involves the person or group who may provide input to the task and assist in completing the task.

Example of RASCI matrix:

RASCI matrix    FR/NFR: Functional and Non-functional requirements

Stakeholder management spreadsheet

Some business analysts use predefined template or spreadsheet in order to manage all these stakeholders. This spreadsheet can be designed separately for all the stakeholders or one template can be designed with the details of all the stakeholders.

The most common sections defined in the template are as below:

  • Name of Stakeholder
  • Current Power (Related to power versus interest grid)
  • Current Interest
  • Current Attitude (Either supportive or blocker, basically defines the attitude towards the work)
  • Desired Support
  • Desired Actions
  • Communication

The above mentioned sections can be designed in an excel format to define the details related to all the stakeholders.

 

Happy Reading!!!!

 

7 thoughts on “Stakeholder Analysis and Management”

  1. Hi ANiket,

    Thanks for focusing on this subject. I have not implemented stakeholder analysis in my project and want to do so. In what circumstances RACI chart will be beneficial. Also if you consider a scenario where creating RACI was beneficial for the project. You mentioned that most of them use spreadsheet .

    I would be grateful if you please provide a sample of RACI chart created for one of the project(ofcourse you can put dummy but relevant data in it to make more sense) to actually see how it looks and works.

    Looking forward for your reply.

    1. Hi Nutan,

      RASCI matrix is always useful in defining the scope of work among different stakeholders. Also the spreadsheet helps in keeping details of different stakeholders. I have updated the post with one example of RASCI matrix, have a look.

      BR/Aniket

  2. thanks aniket for providing an example.

    Couple of my concerns as follows:

    But don’t you think that for Business Notes a Business Owner should held Accountable and Project Manager should be informed as the Busines Owner(Client) is the one who validates and approves the document before proceeding to the development.
    Also is it right things to mention requirement elicitation in the RASCI chart as it is a technique and not a deliverable.

    1. Hi Nutan,

      Here is the answers to your queries:
      1. Regarding Business Notes: I am sorry I was not able to explain it clearly. Here I meant that BA will be preparing the documents after having several requirement elicitation sessions with business owners and then share it with them for approval. Please keep in mind that Business owners (client) do not prepare FR/NFR documents but approve it. Its responsibility of a BA to complete it and PMs supervise the same.

      2. Regarding requirement elicitation: I just mention here the technique to relate it with the requirement gathering section which is the accountability of a BA.

      Just to mention here that its just an example to RASCI matrix and different writers put it in different ways.
      I hope this explanation will keep your concern at rest.

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