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The Importance of Stakeholders In Project Management

Knowing the role of stakeholders in project management is important to ensuring the success of your project. let’s go through the main reasons that the importance of stakeholders in project management is a priority.


Why stakeholders are important

Most projects you work on will involve multiple stakeholders, and each one potentially has the ability to speed up, slow down or completely obstruct your progress. Stakeholders in project management may not be in the driving seat, but they can be extremely useful advocates, sponsors, and agents of change.

What you may not appreciate, however, is why it is important to keep stakeholders happy.

Often, the process of managing stakeholders is viewed by project managers as a form of risk management. After all, keeping shareholders happy and meeting their expectations will certainly reduce the risk of negative influences affecting your project. Therefore, this view is not completely inaccurate, but it does perhaps over-simplify the issue.

Good management of stakeholders will not only clear the path of any possible obstructions but will also promote steady progress and eventually improve the quality of the results you are generating. It’s not just a case of keeping stakeholders in project management happy – it’s also a matter of using their resources, knowledge and influence to help you achieve your objectives.

So long as the project managers and the stakeholders are heading towards a common goal; receiving inputs and feedback from the different stakeholders becomes easier to manage. In most cases, hearing back from different perspectives can help outline any potential issues or improvements project managers might have otherwise missed.

The ability to understand the importance of stakeholders in a project is arguably what separates the best project managers from the average performers. In a post based on The Project Management Book by Richard Newton, Elizabeth Harrin’s project management blog highlighted the importance of stakeholder engagement in project management.


Free resources

In his book, Newton points out that tapping into the skills and knowledge of engaged stakeholders can give project managers access to a host of additional resources, at no extra cost.

Consider what you want from each stakeholder and the amount of help you need from them to help you achieve the results you want. In most cases, stakeholders hold a plethora of knowledge about the current processes, industry insights and past successes/mistakes. This can be an invaluable pool of knowledge that is used to help make key decisions throughout the project process.

With proper management, stakeholders are more often than not compliant to help out and offer assistance. So long as a positive relationship has been built with the stakeholders, it will become easier for a project manager to reach out for advice and insight.

For the public sector, stakeholder management is as important as for private companies. As also a free resource, we made a guide so you can learn how to transform stakeholder engagement in this sector. 

Increased perception of success

Good management of stakeholders throughout a project should ensure they view it in a positive light, regardless of the outcome. Newton explains that engaging stakeholders via a shared workspace online over a period of time makes them “far likelier to perceive a project as a success than those who have been ignored.”

Including them in the process increases transparency and makes them feel included throughout the different project stages. The reason the perception of success is greater when stakeholder management is done effectively is due to the fact that the stakeholders in projects can see for themselves, the cause and effect relationship between the decisions made throughout the process, and the end result.


Smoother handover process

It’s much easier to hand over the deliverables to someone who has been fully aware of the project’s development. Stakeholders who have been managed effectively will be more prepared to take the reins when your project reaches its conclusion.

If they have seen the project from start to end, and been made aware of the occurring updates, they will have a better understanding of the most effective way to take over the deliverables upon completion. It’s clear that stakeholder management supports successful project delivery in many ways.

However, it’s not always easy for project managers to keep every stakeholder in project management informed and engaged, particularly in a scenario where stakeholders span several organisations and multiple locations. In these cases, many project managers choose to carry out online stakeholder management, using the latest tools to keep the wider working community engaged with their progress.

Collaboration software is an effective tool for supporting stakeholder management on all kinds of projects, particularly when there are difficulties in bringing all the participants together for meetings or conference calls.

Using these online collaboration tools, including bid management software, allows for the ease of remote access to files, communications, and the capability to share real-time updates on bidding processes. This way, all stakeholders are empowered with the control to decide their level of involvement in the project, with transparent access to bid information and a platform for seamless communication with project managers if they choose to be involved.

A sense of community develops rapidly because each member using the online collaboration software can create a simple public profile that includes a photo, information about their organisation and contact details. Project managers can then use the tool for managing stakeholder engagement however they want – keeping stakeholders in project management up to date on progress, seeking consultation and feedback, and tapping into their additional resource base when required.

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