Stakeholder Register

A stakeholder register includes basic information on stakeholders:

Identification information: The stakeholders’ names, positions, locations, roles in the project, and contact information

Assessment information: The stakeholders’ major requirements and expectations, potential influences, and phases of the project in which stakeholders have the most interest

Stakeholder classification: Is the stakeholder internal or external to the organization? Is the stakeholder a supporter of the project or resistant to it?

Name	Position	Internal/External	Project Role	Contact Information
Stephen	VP of Operations	Internal	Project sponsor	stephen@globaloil.com
Betsy	CFO	Internal	Senior manager, approves funds	betsy@globaloil.com
Chien	CIO	Internal	Senior manager, PM's boss	chien@globaloil.com
Ryan	IT Analyst	Internal	Team member	ryan@globaloil.com
Lori	Director, Accounting	Internal	Senior manager	lori@globaloil.com
Sanjay	Director, Refineries	Internal	Senior manager of largest refinery	sanjay@globaloil.com
Debra	Consultant	External	Project manager	debra@gmail.com
Suppliers	Suppliers	External	Supply software	suppliers@gmail.com

Table 13-1. Sample Stakeholder Register

Classifying Stakeholders

1. After identifying key project stakeholders, you can use different classification models to determine an approach for managing stakeholder relationships

2. A power/interest grid can be used to group stakeholders based on their level of authority (power) and their level of concern (interest) for project outcomes

Figure 13-2. Power/Interest Grid

Stakeholder Engagement Levels

Unaware: Unaware of the project and its potential impacts on them

Resistant: Aware of the project yet resistant to change

Neutral: Aware of the project yet neither supportive nor resistant

Supportive: Aware of the project and supportive of change

Leading: Aware of the project

What Went Right?

Instead of just saying “no” when your project sponsor asks for something unreasonable, it is better to explain what is wrong with the request and then present a realistic way to solve the problem at hand

For example, Christa Ferguson, a PMP and independent program manager in San Francisco, described how she handled a request from a project sponsor to deliver a new tablet device in two months when she knew she would need more time. Based on her experience, she knew the RFQ for the effort alone would take almost a month. Christa quickly researched the facts to propose a realistic delivery schedule.

The project sponsor reset expectations once he learned what it took to produce the tablets

P.s. A request for quotation (RFQ) is a standard business process whose purpose is to invite suppliers into a bidding process to bid on specific products or services. RFQ generally means the same thing as IFB (Invitation For Bid). An RFQ typically involves more than the price per item

Planning Stakeholder Management

After identifying and analysing stakeholders, project teams should develop a plan for management them

The stakeholder management plan can include:

Current and desired engagement levels

Interrelationships between stakeholders

Communication requirements

Potential management strategies for each stakeholders

Methods for updating the stakeholder management plan

Sensitive Information

Because a stakeholder management plan often includes sensitive information, it should not be part of the official project documents, which are normally available for all stakeholders to review

In many cases, only project managers and a few other team members should prepare the stakeholder management plan

Parts of the stakeholder management plan are not written down, and if they are, distribution is strictly limited

Name	Power/Interest	Current Engagement	Potential Management Strategies
Stephen	High/high	Leading	Stephen can seem intimidating due to his physical stature and deep voice, but he has a great personality and sense of humor. He previously led a similar refinery upgrade program at another company and knows what he wants. Manage closely and ask for his advice as needed. He likes short, frequent updates in person.
Chien	High/medium	Resistant	Chien is a very organised yet hardheaded man. He has been pushed corporate IT standards, and the system the PM and sponsor (Debra and Stephen) like best goes against those standards, even though it's the best solution for this project and the company as a whole. Need to convince him that this is okay and that people still respect his work and position.
Ryan	Medium/high	Supportive	Ryan has been with the company for several years and is well respected, but he feels threatened by Debra. He also resents her getting paid more than he does. He wants to please his boss, Chien, first and foremost. Needs to convince him that the suggested solution is in everyone's best interest.
Betsy	High/low	Neutral	Very professional, logical person. Gets along well with Chien. She has supported Debra in approving past projects with strong business cases. Provide detailed financial justification for the suggested solution to keep her satisfied. Also ask her to talk to Chien on Debra's behalf.

Managing Stakeholder Engagement

Project success is often measured in terms of customer/sponsor satisfaction

Project sponsors often rank scope, time, and cost goals in order of importance and provide guidelines on how to balance the triple constraint

This ranking can be shown in an expectations management matrix to help clarify expectations

Measure of Success	Priority	Expectations	Guidelines
Scope	1	The scope statement clearly defines mandatory requirements and optional requirements.	Focus on meeting mandatory requirements before considering optional ones. In this case, following corporate IT standards is optional.
Time	1	There is little give in the project completion date. The schedule is very realistic.	The project sponsor must be alerted if any issues might affect meeting schedule goals.
Cost	3	This project is crucial to the organisation. If you can clearly justify the need for more funds, they can be made available.	There are strict rules for project expenditures and escalation procedures. Cost is a very important, but it takes a back seat to meeting schedule and then scope goals.
Technology/standards	2	There are several potential solutions available, but only one that meets all of the sponsor's technical requirements, especially for accounting.	While corporate IT standards are important, an exception makes sense in this case.

Table 13-3. Expectations Management Matrix

Best Practice

Project managers are often faced with challenges, especially in managing stakeholders

Sometimes they simply cannot meet requests from important stakeholders

Suggestions for handling these situations include the following:

Be clear from the start

Explain the consequences

Have a contingency plan

Avoid surprises

Take a stand

Controlling Stakeholder Engagement

You cannot control stakeholders, but you can control their level of engagement

Engagement involves a dialogue in which people seek understanding and solutions to issues of mutual concern

Many teachers are familiar with various techniques for engaging students

It is important to set the proper tone at the start of a class or project

Example of Engaging or Not Engaging Students (or Other Stakeholders)

If a teacher (or manager) does nothing but lecture on the first day of class (or at meetings) or criticizes the first person who offers a comment, students (or workers) will quickly decide that their best strategy is to keep quiet and maybe not even attend the class (or meetings)

On the other hand, if the teacher (or manager) uses a lot of activities to get all participants to speak or use technology to participate, they will expect to be active participants in future classes (or meetings)

Media Snapshot

Many students today like to interact via text messages. Ellen DeGeneres, a popular comedian with her own television show, likes to poke fun at text messages in a segment based on amusing errors caused by cell phone auto-correct features. For example, a father had the following text exchange with his daughter:

In addition to watching out for auto-correct errors when messaging, users must also be careful who they reply to and what they say in reply

See the text for an example from an actual college student who forgot about an exam. The professor called the student’s cell phone shortly after the exam started. Her policy was to assign a grade of zero if students did not show up without a valid excuse

The student did not answer the phone call, but he sent several texts, which were obviously not true

Ways to Control Engagement

Key stakeholders should be invited to actively participate in a kick-off meeting rather than merely attending it

The project manager should emphasize that a dialogue is expected at the meeting, including texts or whatever means of communication the stakeholders prefer. The project manager should also meet with important stakeholders before the kick-off meeting

The project schedule should include activities and deliverables related to stakeholder engagement, such as surveys, reviews, demonstrations, and sign-offs.

Stakeholders As Key Project Team Members

On some IT projects, important stakeholders are invited to be members of the project teams

For example, when Northwest Airlines (now Delta) was developing a new reservation system called ResNet, it interviewed reservation agents for positions as programmers on the project team

Northwest made sure that user needs were understood by having them actually develop the system’s user interface

Using Software to Assist in Project Stakeholder Management

Productivity software, communications software, and collaboration tools can promote stakeholder engagement

Social media can also help engage stakeholders. For example, LinkedIn has thousands of groups for project management professionals

Some project management software includes functionality like Facebook’s to encourage relationship building on projects, like giving high fives for a job well done

Social Media for Project Managers

Elizabeth Harrin, author of Social Media for Project Managers, describes the pros and cons of several social media tools, including blogs, collaboration tools, instant messaging, microblogs like Twitter and Facebook, podcasts, RSS, social networks, vodcasts (video podcasts), webinars, and wikis

Harrin provides advice for when to use social media and when not to use it

As the saying goes, “A fool with a tool is still just a fool.” A lot of stakeholder engagement requires old-fashioned techniques like talking to someone!

Global Issues

Not all software implementations go well, and managing stakeholders is a major challenge

The U.K. government scrapped its £11.4 billion national healthcare IT initiative in September 2011 after it failed to deliver the promised benefits. Unfortunately, this project was just one in a series of high-profile failures in the U.K.

In response, the government decided to send its project managers back to school! They partnered with the University of Oxford and the Deloitte consulting firm to establish the Major Projects Leadership Academy in Oxford, England

Chapter Summary

Managing stakeholders is now the tenth knowledge area in the PMBOK® Guide.

Processes include:

Identify stakeholders

Plan stakeholder management

Manage stakeholder engagement

Control stakeholder engagement

Learning Objectives

Understand the importance of project procurement management and the increasing use of outsourcing for information technology (IT) projects

Describe the work involved in planning procurements for projects, including:

determining the proper type of contract to use and

preparing a procurement management plan,

statement of work,

source selection criteria,

and make-or-buy analysis

Discuss how to conduct procurements and strategies for obtaining seller responses, selecting sellers, and awarding contracts

Understand the process of controlling procurements by managing procurement relationships and monitoring contract performance

Describe the process of closing procurements

Discuss types of software that are available to assist in project procurement management

Importance of Project Procurement Management

Procurement means acquiring goods and/or services from an outside source

Other terms include purchasing and outsourcing

Experts predict that global spending on computer software and services will continue to grow

Garner estimated the value of the global IT industry in 2014 at $3.8 trillion

People continue to debate whether offshore outsourcing helps their own country or not

Global Issues

A recent approach to bring IT jobs back to the U.S. is called urban onshoring, especially for functions like software testing

For example,

the Urban Development Center model develops the infrastructure, resources, and jobs in low-income urban neighborhoods to provide technology education, training, and job placement services for over 4,500 unemployed and low-income adults in New York City

Debates on Outsourcing

Some companies, such as Wal-Mart, prefer to do no outsourcing at all, while others do a lot of outsourcing. GM recently announced plans to switch from outsourcing 90% of IT service to only 10%

Most organisations do some form of outsourcing to meet their IT needs and spend most money within their own country

The U.S. temporary workforce continues to grow as people work for temporary job agencies so they can more easily move from company to company

IT Outsourcing Market Continues to Grow

U.S. companies are transferring more work abroad, especially in the areas of IT infrastructure, application development and maintenance, and innovation processes

India, China, and the Philippines are the preferred locations for outsourcing, and Latin America is growing in popularity

A shortage of qualified personnel, not cost savings, is the top reason for global outsourcing of IT services

What Went Right?

Retailer Zulily develops software in-house to meet their needs for speed and innovation

Their proprietary algorithms track customers and make adjustments to meet changing consumer preferences

They believe you have to build the technology from scratch to fit your market perfectly

Why Outsource?

To access skills and technologies

To reduce both fixed and recurrent costs

To allow the client organization to focus on its core business

To provide flexibility

To increase accountability

Contracts

A contract is a mutually binding agreement that obligates the seller to provide the specified products or services and obligates the buyer to pay for them

Contracts can clarify responsibilities and sharpen focus on key deliverables of a project

Because contracts are legally binding, there is more accountability for delivering the work as stated in the contract

What Went Wrong?

In 2011, New York City’s mayor, Michael Bloomberg, acknowledged that City Hall had mismanaged its major IT projects and vowed to improve their oversight

For example, prosecutors said the $700 million price tag for the CityTime payroll system was inflated by fraud, and the mayor demanded $600 million back from the main contractor

The automated personnel system, Nycaps, suffered significant delays and cost overruns due to leadership issues, increasing from an original estimate of $66 million to over $363 million

Project Procurement Management Processes

Project procurement management: Acquiring goods and services for a project from outside the performing organisation

Processes include:

Planning procurement management: Determining what to procure and when and how to do it

Conducting procurements: Obtaining seller responses, selecting sellers, and awarding contracts

Controlling procurements: Managing relationships with sellers, monitoring contract performance, and making changes as needed

Closing procurements: Completing and settling each contract or agreement, including resolving of any open items

Planning Procurement Management

Identifying which project needs can best be met by using products or services outside the organisation

If there is no need to buy any products or services from outside the organisation, then there is no need to perform any of the other procurement management processes

Types of Contracts

Different types of contracts can be used in different situations:

Fixed price or lump sum contracts: Involve a fixed total price for a well-defined product or service

Cost reimbursable contracts: Involve payment to the seller for direct and indirect costs

Time and material contracts: Hybrid of both fixed price and cost reimbursable contracts, often used by consultants

Unit price contracts: Require the buyer to pay the seller a predetermined amount per unit of service

A single contract can actually include all four of these categories, if it makes sense for that particular procurement

Contract Clauses

Contracts should include specific clauses to take into account issues unique to the project

Can require various educational or work experience for different pay rights

A termination clause is a contract clause that allows the buyer or supplier to end the contract

Tools and Techniques for Planning Purchases and Acquisitions

Expert judgment

Market research

Make-or-buy analysis: General management technique used to determine whether an organisation should make or perform a particular product or service inside the organisation or buy from someone else

Make-or-Buy Example

Assume you can lease an item you need for a project for $800/day. To purchase the item, the cost is $12,000 plus a daily operational cost of $400/day

How long will it take for the purchase cost to be the same as the lease cost?

Make-or Buy Solution

Set up an equation so both options, purchase and lease, are equal

In this example, use the following equation. Let d be the number of days to use the item:

$12,000 + $400d = $800d

Subtracting $400d from both sides, you get:

$12,000 = $400d

Dividing both sides by $400, you get:

d = 30

If you need the item for more than 30 days, it is more economical to purchase it

Procurement Management Plan

Describes how the procurement processes will be managed, from developing documentation for making outside purchases or acquisitions to contract closure

Contents varies based on project needs

Contract Statement of Work (SOW)

A statement of work is a description of the work required for the procurement

If a SOW is used as part of a contract to describe only the work required for that particular contract, it is called a contract statement of work

A SOW is a type of scope statement

A good SOW gives bidders a better understanding of the buyer’s expectations

Figure 12-3. Statement of Work (SOW) Template

Procurement Documents

Request for Proposals: Used to solicit proposals from prospective sellers

A proposal is a document prepared by a seller when there are different approaches for meeting buyer needs

Requests for Quotes: Used to solicit quotes or bids from prospective suppliers

A bid, also called a tender or quote (short for quotation), is a document prepared by sellers providing pricing for standard items that have been clearly defined by the buyer

Figure 12-4. Request for Proposal (RFP) Template

Source Selection Criteria

It’s important to prepare some form of evaluation criteria, preferably before issuing a formal RFP or RFQ

Beware of proposals that look good on paper; be sure to evaluate factors, such as past performance and management approach

Can require a technical presentation as part of a proposal

Conducting Procurements

Deciding whom to ask to do the work

Sending appropriate documentation to potential

sellers

Obtaining proposals or bids

Selecting a seller

Awarding a contract

Approaches for Procurement

Organisations can advertise to procure goods and services in several ways:

Approaching the preferred vendor

Approaching several potential vendors

Advertising to anyone interested

A bidders’ conference can help clarify the buyer’s expectations

		Proposal 1		Proposal 2		Proposal 3, etc.
Criteria	Weight	Rating	Score	Rating	Score	Rating	Score
Technical approach	30%
Management approach	30%
Past performance	20%
Price	20%
Total score	100%

Seller Selection

Organisations often do an initial evaluation of all proposals and bids and then develop a short list of potential sellers for further evaluation

Sellers on the short list often prepare a best and final offer (BAFO)

Final output is a contract signed by the buyer and the selected seller

Controlling Procurements

Ensures that the seller’s performance meets contractual requirements

Contracts are legal relationships, so it is important that legal and contracting professionals be involved in writing and administering contracts

It is critical that project managers and team members watch for constructive change orders, which are oral or written acts or omissions by someone with actual or apparent authority that can be construed to have the same effect as a written change order

Suggestions for Change Control in Contracts

Changes to any part of the project need to be reviewed, approved, and documented by the same people in the same way that the original part of the plan was approved

Evaluation of any change should include an impact analysis. How will the change affect the scope, time, cost, and quality of the goods or services being provided?

Changes must be documented in writing. Project team members should also document all important meetings and telephone phone calls

Project managers and teams should stay closely involved to make sure the new system will meet business needs and work in an operational environment

Have backup plans

Use tools and techniques, such as a contract change control system, buyer-conducted performance reviews, inspections and audits, and so on

Closing Procurements

Involves completing and settling contracts and resolving any open items

The project team should:

Determine if all work was completed correctly and satisfactorily

Update records to reflect final results

Archive information for future use

The contract itself should include requirements for formal acceptance and closure

Best Practice

Procurement can be more intelligent:

Data scientists build predictive models to analyze big date related to finance, marketing, etc. Why not model procurement processes?

Behavioral economists know that people do not act rationally. Why no apply irrationality to your advantage in negotiations?

Crowdsourcing solicits ideas from a large group of people. Can it apply to some of your organisation’s procurements?

Tools to Assist in Contract Closure

Procurement audits identify lessons learned in the procurement process

Negotiated settlements help close contracts more smoothly

A records management system provides the ability to easily organise, find, and archive procurement-related documents

Using Software to Assist in Project Procurement Management

Word processing software helps write proposals and contracts, spreadsheets help evaluate suppliers, databases help track suppliers, and presentation software helps present procurement-related information

E-procurement software does many procurement functions electronically

Organisations also use other Internet tools to find information on suppliers or auction goods and services

Chapter Summary

Project procurement management involves acquiring goods and services for a project from outside the performing organisation

Processes include:

Plan procurement management

Conduct procurements

Control procurements

Close procurements