Stakeholder Management

The McKinsey – Oxford University research [1] into 5400+ IT projects in June 2012 – Delivering large-scale IT projects on time, on budget, and on value – makes for very interesting reading. A key finding which came out of this research is that large IT projects (Initial budget> $15M US) on average ran 45% over budget, 7% over schedule, and delivered 56% less value than planned. Even more interestingly, fully 17% of large projects (called Black Swans) go so bad as to threaten the very existence of the company.

From their research, McKinsey also identified 4 broad dimensions for improving control of large IT projects:

  • Focusing on managing strategy and stakeholders instead of exclusively concentrating on budget and scheduling
  • Mastering technology and project content by securing critical internal and external talent
  • Building effective teams by aligning their incentives with the overall goals of projects
  • Excelling at core project-management practices, such as short delivery cycles and rigorous quality checks

 

McKinsey Value Assurance assessment elements

 

On analyzing the Project success factors identified by McKinsey, it becomes apparent that effective Stakeholder Management is a critical enabler to the success of large IT projects:

  • Clear Project objectives: Improvement of this Success factor requires strong User involvement, which would in turn be enabled by effective Stakeholder management.
  • Well-defined business case: Improvement of this Success factor requires Clarity into Project objectives & strong User involvement, which would in turn be enabled by effective Stakeholder management.
  • Alignment of major stakeholders: This success factor can be achieved by effective Stakeholder management.
  • Minimized, stable project scope: Improving this Success factor requires clarity of objectives, strong User involvement, and a Qualified & motivated project team. These would in turn be enabled by effective Stakeholder management.
  • Robust vendor contracts with clear responsibilities: Improvement of this Success factor requires strong Procurement processes, clarity into Project Objectives, clarity into the skills & skill levels of the internal teams, Project management expertise, as well as an effective Project Management methodology. The first 4 factors would be in turn be enabled by effective Stakeholder management, while the last would necessitate a mature Organizational Project management methodology.
  • Executive support: This success factor can be achieved by effective Stakeholder management.
  • Standardized, proven Software technology: Improvement of this Success factor requires a qualified Project team that is able to understand the project objectives and recommend the right, proven Software technology to achieve the project objectives. This, in turn, would be enabled by Executive support, which can further be enabled by effective Stakeholder management.
  • User involvement to shape solution: Improvement of this success factor can be achieved by effective Stakeholder management.
  • Experienced Project manager: Improvement of this success factor can be achieved by Executive support, which can further be enabled by effective Stakeholder management.
  • Qualified and motivated Project team: Improvement of this success factor can be achieved by Executive support, which can further be enabled by effective Stakeholder management.
  • Sustainable mix of internal and external resources: Improvement of this success factor can be achieved by Executive support, which can further be enabled by effective Stakeholder management.
  • Reliable estimates and plans, appropriate transparency about project status: Improvement of this success factor can be achieved by means of a mature Organizational Project Management methodology.
  • Proven methodologies and tools: Improvement of this success factor can be achieved by having in place a qualified Project team that can recommend and effectively adopt these methodologies and tools in the project.

The conclusion that can be drawn is that adopting an effective Stakeholder management strategy can yield substantial benefits on most of the McKinsey-recommended Project success factors.

Recommendations on improvement of Stakeholder management can be found in the article “4 Steps to effective Stakeholder management” on the pmExcell website. I have on focused the Stakeholder analysis activity to greater depth here, since this step may be the make-or-break activity that really makes a difference to a project’s success or failure.

References:

[1] McKinsey and Oxford University study – Delivering large scale IT projects on time, on budget, and on value, 2012.