Project Portfolio Management's Missing Functional Link: Stakeholder Management

Understanding What's at Stake: Stakeholder Circle�:

The stakeholder circle methodology developed by Lynda Bourne, director of Australia-based Stakeholder Management Pty Ltd, showcases the importance of stakeholder impact on projects and PPM. Her methodology seeks to effectively categorize the influence and expectations of project stakeholders. Project leaders use the Stakeholder Circle visualization tool to define the procedures that engage all stakeholders affect the project at hand. The methodology incorporates the notion of direction of influence. With this notion in mind, project leaders manage their stakeholders based on the following directional components:

1. Forward managing involves anticipating and planning.
2. Backward managing involves maintaining historical data and an explicit knowledge of stakeholders.
3. Upward managing involves maintaining and supporting senior managers and executives who have direct influence over organizational commitments to projects.
4. Downward managing involves managing the project team.
5. Outward managing involves engaging the support of external project stakeholders (such as clients).
6. Inward managing involves seeking stakeholder feedback on project activities and processes.
7. Sideward managing involves fostering peer-to-peer collaboration.

Source: "Project Relationships and the Stakeholder Circle�," Lynda Bourne, 2006

A PPM methodology that can incorporate a formalized process (such as the one referred to here) will ensure that the most relevant information is delivered to the appropriate parties involved in projects, in a timely manner. Furthermore, PPM vendors that embrace this approach can achieve their ultimate goal—delivery of a solution that displays the right information to the right people in the right format.

Summary

Stakeholder buy-in will make or break an organization's PPM initiative, as it plays a vital role in determining the success (or perceived success) of projects. Identifying stakeholders and understanding their mission-critical expectations relevant to projects can only add value to the development and implementation of a PPM solution or methodology in an organization. Successful PPM implementations seriously consider stakeholder needs by breaking down typical communication barriers experienced by varying players, such as IT, operations, customers, and management. Although PPM methodologies and solutions facilitate stakeholder communication, in reality most PPM methodologies and applications do not incorporate a stakeholder management component.

Today's PPM vendors deliver solid solutions that capture all relevant project data in a single repository for quick access and strategic decision making. A large part of the challenge in implementing a PPM solution is determining what data is relevant to which project stakeholder. Organizations implementing a PPM methodology or solution must be diligent in determining their stakeholder management strategy. This ensures that their stakeholders will have access to the most relevant information, thus facilitating the best results from their projects. Moreover, the PPM vendors that will lead the pack in delivering formalized processes, methodologies, and templates for stakeholder management will gain a competitive advantage by offering more focused and effective solutions customized to the unique needs of clients.