Managing Project Stakeholders & Communication: Comprehensive Guide
Overview: This guide covers two critical aspects of IT project management: Stakeholder Analysis and Project Metrics. Understanding these concepts is essential for effective project monitoring, control, and communication.
Part 1: Stakeholder Analysis
What is Stakeholder Analysis?
Stakeholder analysis is a systematic process to understand who your stakeholders are and what roles they play in your project. Think of it as creating a detailed map of all the people who have an interest in or influence over your project’s success.
The Stakeholder Analysis Process
The stakeholder analysis process follows a structured approach that helps project managers identify, understand, and manage relationships with all project stakeholders. Let me walk you through each step:
| Step | Description | Key Questions |
|---|---|---|
| 1. Develop Stakeholder List | Create a comprehensive list of all stakeholders | Who is affected by the project? Who has influence over it? |
| 2. Identify Interest | Determine if stakeholder has positive (+1) or negative (-1) interest | Does this person want the project to succeed or fail? |
| 3. Gauge Influence | Rate influence from 0 (none) to 5 (high) | How much power does this person have over the project? |
| 4. Assess Conflicts | Identify potential conflicts between stakeholders | Where might stakeholder interests clash? |
| 5. Define Roles | Assign roles: Champion, Consultant, Decision Maker, Advocate, Ally, Rival, Foe | What role does each stakeholder play? |
| 6. Identify Objectives | Understand what each stakeholder wants to achieve | What are their goals and motivations? |
| 7. Develop Strategies | Create approaches for managing each stakeholder relationship | How will you build, maintain, or improve relationships? |
Example: Stakeholder Analysis Matrix
Example from the Lubbock Florist Project:
| Stakeholder | Interest | Influence | Role | Strategy |
|---|---|---|---|---|
| Carlos (Owner) | +1 | 5 | Project Sponsor & Champion | Maintain open communication, provide regular updates |
| Project Manager | +1 | 3 | Lead & Coordinator | Work closely with team and stakeholders |
| Development Team | +1 | 2 | Implementers | Support with resources, minimize distractions |
| Competitors | -1 | 4 | Rival/Foe | Monitor market position, maintain confidentiality |
Part 2: Project Metrics
Understanding Project Metrics
Project metrics are quantifiable measurements that help us track project performance. Think of them as the vital signs of your project – just as a doctor monitors heart rate and blood pressure, project managers monitor metrics to ensure project health.
Why Metrics Matter: Without metrics, you’re flying blind. Metrics provide an early warning system that alerts you to problems before they become crises, holds people accountable, and ensures resources are used efficiently.
Key Project Metrics: The Foundation
1. Planned Value (PV)
Budget at Completion (BAC) = Total cumulative planned value for entire project
Think of PV as your project’s budget roadmap – it tells you how much you should have spent at any given point.
2. Actual Cost (AC)
This is the reality check – what you’ve actually spent so far.
3. Earned Value (EV)
EV represents the value you’ve created. If a task worth $10,000 is 50% complete, the EV is $5,000.
Performance Metrics: Analyzing the Numbers
Cost Performance Metrics
• Positive CV = Under budget (good!)
• Negative CV = Over budget (concern!)
Cost Performance Index (CPI) = EV / AC
• CPI > 1.0 = Under budget
• CPI < 1.0 = Over budget
• CPI = 1.0 = On budget
Example: If EV = $6,000 and AC = $8,000:
CV = $6,000 – $8,000 = -$2,000 (over budget by $2,000)
CPI = $6,000 / $8,000 = 0.75 (for every $1 spent, only $0.75 of value earned)
Schedule Performance Metrics
• Positive SV = Ahead of schedule
• Negative SV = Behind schedule
Schedule Performance Index (SPI) = EV / PV
• SPI > 1.0 = Ahead of schedule
• SPI < 1.0 = Behind schedule
• SPI = 1.0 = On schedule
Forecasting Metrics: Predicting the Future
Estimate at Completion (EAC)
EAC helps predict the total project cost based on current performance. There are two main approaches:
EAC = AC + (BAC – EV) / CPI
Method 2 (CPI and SPI):
EAC = AC + (BAC – EV) / (CPI × SPI)
Variance at Completion (VAC)
• Positive VAC = Projected surplus
• Negative VAC = Projected deficit
To Complete Performance Index (TCPI)
TCPI tells you the efficiency level needed to complete the project within budget:
For revised budget: TCPI = (BAC – EV) / (EAC – AC)
• TCPI > 1.0 = Must improve efficiency
• TCPI < 1.0 = Can afford to be less efficient
• TCPI = 1.0 = Continue at current efficiency
Practical Application: The Lubbock Florist Example
Given Data:
| Task | PV | AC | EV |
|---|---|---|---|
| 1 | $5,000 | $3,000 | $3,000 |
| 2 | $5,000 | $3,000 | $3,000 |
| 3 | $5,000 | $3,000 | $2,000 |
| 4 | $5,000 | $4,000 | $1,000 |
| 5 | $5,000 | – | – |
| Total | $25,000 | $13,000 | $9,000 |
Calculations:
BAC = $25,000 (total budget)
CV = $9,000 – $13,000 = -$4,000 (over budget)
CPI = $9,000 / $13,000 = 0.692 (poor cost performance)
SPI = $9,000 / $25,000 = 0.36 (severely behind schedule)
EAC (CPI) = $13,000 + ($25,000 – $9,000) / 0.692 = $36,121
VAC = $25,000 – $36,121 = -$11,121 (projected overrun)
Creating a Communication Plan with Metrics
Different stakeholders need different information at different frequencies. Here’s how to tailor your metric reporting:
| Stakeholder | Frequency | Key Metrics | Purpose |
|---|---|---|---|
| Sponsor/Owner | Monthly | EAC, VAC, TCPI | High-level financial overview for funding decisions |
| Project Manager | Weekly | CPI, SPI, CV, SV | Performance tracking and corrective action |
| Team Members | Daily | Task-level EV, PV | Progress tracking and efficiency improvement |
Key Takeaways for Exam Success
Stakeholder Analysis Essentials:
- Always identify both positive (+1) and negative (-1) stakeholders
- Influence is rated 0-5, with 5 being highest
- Stakeholder roles range from Champion to Foe
- Strategies must be tailored to each stakeholder’s role and influence
Project Metrics Essentials:
- PV = planned, AC = actual spent, EV = value earned
- Negative variances indicate problems (over budget/behind schedule)
- CPI and SPI below 1.0 indicate poor performance
- EAC forecasts final cost based on current performance
- TCPI shows efficiency needed to meet budget goals
Common Exam Scenarios
Scenario 1: “Your CPI is 0.8 and SPI is 0.9. What does this tell you?”
Answer: The project is over budget (spending $1.25 for every $1 of value) and behind schedule (completing only 90% of planned work).
Scenario 2: “A stakeholder has high influence (5) but negative interest (-1). How should you manage them?”
Answer: This is likely a Rival or Foe. Strategy should focus on minimizing their negative impact through careful communication and possibly finding ways to align their interests with project success.