Project Management Basics: Stakeholder Management

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Project Management Basics Stakeholder Management EPICPM® Stakeholder – An individual, group, or organization who may affect, be affected by, or perceive itself to be affected by a decision, activity or outcome of a project. Source: PMBOK® p.563 Stakeholder Management Stakeholder Management – Includes the processes required to identify the people, groups, or organizations that could impact or be impacted by the project, to analyze stakeholder expectations and their impact on the project, and to develop appropriate management strategies for effectively engaging stakeholders in project decisions and execution. Source: PMBOK® p.391 Stakeholder Management * Stakeholder Management also focuses on continuous communication with stakeholders to understand their need and expectations, addressing issues as they occur, managing conflicting interests and fostering appropriate stakeholder engagement in project decisions and activities.

The key is Stakeholder Satisfaction Source: PMBOK® p.391 Stakeholder Management Stakeholder Management Source: PMBOK® p.71 Project Management Process Groups Initiating Planning Executing Monitoring & Controlling Closing Project Integration Knowledge Area Processes Identify Stakeholders Plan Stakeholder Management Manage Stakeholder Engagement Control Stakeholder Management These are the Cost Management processes and their alignment with the PMBOK’s Process Groups. You do need to know these alignments. Identify Stakeholders Identify the groups and people who could impact your project or think your project will impact them. Identify Stakeholder needs Identify what you need from these Stakeholders Relevant Information Support Interests Involvement Interdependence Dependence Influence Source: PMBOK® p.391 Plan Stakeholder Engagement The process of developing appropriate management strategies to effectively engage stakeholders throughout the project life cycle.

The Key is to provide a clear, actionable plan to interact the stakeholders to support the projects interest. Source: PMBOK® p.399 Manage Stakeholder Engagement The process of communicating and working with stakeholders to meet their needs/expectations, address issues as they occur and foster appropriate stakeholders engagement in project activities throughout the project life cycle. Source: PMBOK® p.404 Control Stakeholder Engagement The process of monitoring overall project stakeholders relationships and adjusting strategies and plans for engaging stakeholders. The key benefit is to increase efficiency and effectiveness. Source: PMBOK® p.404 Project Stakeholder Management Project Stakeholder Management Understand your Stakeholders and their Influencers and how interested Enablers can help you with your project. Stakeholder Analysis Table Example Name Role Why are they Important?

Rank (where in the Matrix) Current attitude What we would like them to do? Key Messages How (Tactics) When Who Identify Stakeholders STAKEHOLDER MAPPING Project Stakeholder Management Alhazmi1 Name: P. Bhavik K Pathak Bus-K301 WM= Waste Management CIO= Chief Information Officer If you were a CIO of WM, what could you have done differently to avoid this problem? SAP Software A 'Complete Failure,' Lawsuit Claims Waste Management claims SAP showed it "fake, mock-up simulations" of software in order to snag a contract to rehaul its revenue management system. By Mary Hayes Weier, InformationWeek March 27, 2008 URL: Waste Management Inc.'s lawsuit against SAP for the "complete failure" of a $100 million software implementation could bruise the credibility of SAP's vertical-market strategy.

Waste Management claims SAP duped it into purchasing untested software that wasn't ready to handle the complexities of the U.S. waste hauling market. The $13-billion-a-year waste hauler's suit comes at a time when SAP, Oracle, and other software companies are developing more software packages specialized for specific industries, while also honing their software to deal with the economic nuances of different global markets. Yet Waste Management, the nation's largest waste hauler, claims SAP failed it on those efforts. In a March 20 lawsuit filed in a U.S. District Court in Texas, Waste Management said that SAP had licensed its Waste Management and Recycling software to a limited number of small, European waste companies prior to its contract.

SAP assured the company, however, that its software would work in "the considerably more complex competitive environment" created by the U.S.'s open pricing system for waste hauling, which is very different from Europe's government-controlled pricing system. Waste Management claims it was a ruse, starting in 2005 with demonstrations in both the U.S. and Germany, involving high-level SAP executives such as SAP Americas President Bill McDermott and former president of technology, Shai Agassi, of what SAP said was mature, industry standard software for the waste industry that did not require customization. Waste Management claimed it later learned the demos were of "fake , mock-up simulations" of software with "false functionality." Waste Management said it signed a contract for an 18-month project for a system, built on SAP R/3, which handled the order-to-cash process, including billing, collections, pricing, and customer setup.

Its goal was to streamline operations and improve revenues and customer satisfaction. Waste Management said the system was core to a broader company strategy called Customer First for expanding and retaining market share. While Waste Management didn't provide details of its legacy systems, it appears some were developed by Oracle-owned companies. Waste Management used the services of SAP's TomorrowNow, a company that provides third-party support for Oracle software such as Siebel and JD Edwards, and is the subject of a lawsuit Oracle filed against SAP last year. During the initial pilot project in New Mexico, Waste Management discovered the software was "unable to run [our] most basic revenue management operation." Waste Management alleges that SAP tried to solve the problem by rewriting tens of thousands of lines of core code during the implementation process.

But that only caused further failures and made the system incompatible with future upgrades, Waste Management claims. That pilot, originally scheduled for completion in December 2006, is "not even close to being completed today," Waste Management said. It appears that Waste Management is looking to kill the SAP project. SAP proposed a new development project to fix the problems that would result in completing the project in 2010 "without any assurance off success," Waste Management said. But that would require the company to "once again act as SAP's guinea pig by agreeing to convert what was supposed to be an 18-month out-of-the-box implementation into an even more expensive, longer and highly risky software development project." The suit accuses SAP of fraudulent inducement, fraud, negligent misrepresentation and breach of contract and seeks compensatory and punitive damages.

SAP decline comment on the suit. Sponsored by: This story appeared on Network World at SAP fires back at Waste Management By Chris Kanaracus , IDG News Service , 08/14/2008 SAP attorneys have filed a counterclaim to the lawsuit Waste Management filed in March over dissatisfaction with an enterprise resource planning implementation, asserting the vendor's innocence and charging in turn that the trash-disposal company violated the deal's contract. Waste Management's initial complaint states that in 2005, the company was seeking a new revenue management system, and SAP said its Waste and Recycling product was ideal for Waste Management's needs. SAP also allegedly said the software could be fully implemented throughout the company within 18 months.

In addition, senior SAP executives allegedly participated in "rigged and manipulated" product demonstrations prior to the deal that employed "fake software environments, even though these demonstrations were represented to be the actual software." After a deal was signed in October 2005, SAP's implementation team soon discovered gaps "between the software's functionality and Waste Management's business requirements," and SAP's German product development team knew these existed before the deal closed, according to Waste Management. Related Content SAP eventually determined that if Waste Management wanted an enterprise-wide deployment, it would have to develop a new application with an updated version of SAP's platform, pushing the project's estimated completion date from December 2007 "to an end-date sometime in 2010 without any assurance of success," according to Waste Management's complaint.

But SAP's amended counterclaim, filed in July in a Harris County, Texas, court, said those claims are invalid because Waste Management "understood and expressly agreed that SAP America not warrant that the applications in the Software are designed to meet all of [Waste Management's] business requirements." In addition, Waste Management allegedly violated its contractual agreement with SAP in a number of ways, including by "failing to timely and accurately define its business requirements"; not providing "sufficient, knowledgeable, decision- empowered users and managers" to work on the project; and failing to successfully migrate data from the legacy system. SAP alleges that it is owed millions in maintenance and services fees, and is seeking unspecified compensatory damages as well as the return of its software.

Sponsored by: An SAP spokesman said Thursday that the company does not comment on ongoing litigation, but the company is "confident in the actions of the court." Waste Management said in a statement that SAP's claim and alleged damage "are baseless." "We find it interesting that SAP not only continues to evade responsibility for its fraudulent conduct, but wants to profit from it by obtaining even more fees from Waste Management," it added. "The costs SAP wants to recover are for consulting services it provided in a futile attempt to fix its own defective software, which Waste Management is not even using." It is somewhat unusual for implementation disputes to result in active litigation, industry observers said Friday.

Related Content "Large-scale implementations are complicated affairs that require alignment among the system integrator, vendor and client for success, " Forrester Research analyst Ray Wang said via e-mail. "It's a three-legged stool and lawsuits are typically the last resort when any one party faces irreconcilable differences." Nucleus Research analyst Marc Songini echoed Wang. "Things have become very, very bad here. Usually these implementations either get fixed up or they're settled quietly, or as quietly as possible," Songini said in an e-mail. "It doesn't look good to a prospective customer to see that their relationship with an enterprise applications vendor might end in court." "It's always incumbent on the software vendor to ensure their customers succeed with the vendor's software," Songini said.

"According to the response, however, SAP is blaming Waste Management for the problems. In fact, SAP seems to be indicating that if the customer doesn't have a Mensa-level IQ, they shouldn't deploy SAP." The IDG News Service is a Network World affiliate. SAP Software a complete failure SAP Fires Back Scope Scope Statement Project Title Project Sponser Objective Project Manager Stakeholder Influence v Interest Analysis Project Scope Statement Type here Milestones ROM Budget Milestone 1 (type here) Milestone 2 (type here) Milestone 3 (type here) Milestone 4 (type here) Milestone 5 (type here) Initial Organization Type Here Product Description Type here Stakeholder Stakeholder Management Project Title Project Sponser Objective Project Manager Stakeholder Register Date Name of Stakeholder Interest Influence Role in Type of Type of Other Expectations Project Stakeholder Communicaion Interests of Project Stakeholder Influence v Interest Analysis Map Influence Interest

Paper For Above instruction

Effective stakeholder management is a critical component in the success of any project, especially those involving complex software implementations and significant business impacts. As outlined in PMI's PMBOK® Guide, stakeholder management encompasses processes that identify, analyze, and plan engagements with stakeholders, ensuring their needs and expectations are understood and addressed throughout the project lifecycle (PMI, 2021). This essay explores the importance of stakeholder management within project management, emphasizing key processes, strategies, and challenges illustrated through a case involving SAP's failed software implementation for Waste Management.

Introduction

Stakeholders are individuals or groups that influence or are influenced by project activities, decisions, and outcomes. Managing these stakeholders effectively is essential for fostering collaboration, minimizing resistance, and ensuring project objectives are met (Bourne, 2015). The project environment depicted by the SAP-Waste Management case underscores the significance of proactive stakeholder engagement, clear communication strategies, and risk mitigation to prevent costly disputes and project failures.

Significance of Stakeholder Management

Stakeholder management is integral to project success because it aligns project objectives with stakeholder expectations, thereby enhancing stakeholder satisfaction and project legitimacy (Kloppenborg et al., 2019). Projects involving technological upgrades, such as SAP’s revenue management software, require nuanced understanding of stakeholder interests, influence levels, and interdependencies. Failure to identify and engage stakeholders early and continuously can result in misunderstandings, misaligned expectations, and, ultimately, project failure, as seen in the Waste Management case.

Core Processes of Stakeholder Management

The PMBOK® recognizes four primary stakeholder management processes: identify stakeholders, plan stakeholder engagement, manage stakeholder engagement, and control stakeholder engagement. These processes ensure a structured approach to stakeholder engagement (PMI, 2021).

1. Identify Stakeholders: This involves determining all parties affected or impacting the project. In the SAP case, stakeholders included Waste Management executives, SAP Project Managers, software developers, and legal teams.

2. Plan Stakeholder Engagement: Developing strategies to communicate and collaborate with stakeholders throughout the project life cycle is crucial (Pinto & Slevin, 1987). Clear articulation of roles, responsibilities, and expectations helps mitigate misunderstandings, which proved to be a critical issue in the SAP project.

3. Manage Stakeholder Engagement: Active involvement and transparent communication facilitate stakeholder needs and expectations management. Regular updates, stakeholder meetings, and feedback loops are vital (Bourne, 2015).

4. Control Stakeholder Engagement: Continuous monitoring and adjusting strategies ensure stakeholder relationships stay aligned with project goals, especially in dynamic environments like software implementation projects (PMI, 2021).

Challenges in Stakeholder Management

In the SAP-Waste Management case, several challenges emerged, including misrepresentation during software demonstrations, misaligned expectations, and failure to manage the legal ramifications of project disputes. These issues highlight the importance of accurate stakeholder analysis and truthful communication (Eskerod & Huemann, 2013).

Particularly, the misrepresentation of software capabilities through fake demos led to a breach of trust. Effective stakeholder analysis and influence-interest mapping could have identified the risk of stakeholder mistrust and miscommunication (Freeman et al., 2010). Additionally, the high-level engagement of executives in demonstrations and contractual negotiations underscores the need for strategic stakeholder management at leadership levels.

Strategies for Effective Stakeholder Management

To avoid the pitfalls experienced in the SAP case, project managers should adopt comprehensive stakeholder analysis tools, such as stakeholder mapping matrices, which categorize stakeholders based on their influence and interest levels (Mitchell, Agle, & Wood, 1997). These matrices help prioritize stakeholder engagement efforts and tailor communication strategies accordingly.

Building trust through transparency, avoiding misrepresentation, and establishing clear contractual agreements are fundamental strategies. In the context of software projects, conducting thorough due diligence, pilot testing, and phased implementation can also mitigate risk and align stakeholder expectations (Wang et al., 2018).

Conclusion

In conclusion, stakeholder management is a vital element of project success, particularly in complex and high-stakes projects such as enterprise software implementations. The case of SAP’s failure with Waste Management exemplifies the risks associated with inadequate stakeholder engagement, miscommunication, and mismanagement of expectations. By applying structured processes, transparent communication, and strategic stakeholder analysis, project managers can significantly improve project outcomes, build stakeholder trust, and prevent costly disputes.

References

• Bourne, L. (2015). Stakeholder Engagement: The Game Changer for Project Success. Gower Publishing.
• Eskerod, P., & Huemann, M. (2013). Stakeholder management in sustainability-oriented projects: A case survey. International Journal of Project Management, 31(2), 229-240.
• Freeman, R. E., Reed, D. L., & Parmar, B. (2010). Stakeholder theory. Business Ethics: Ethical Decision Making & Cases, 8th Edition.
• Kloppenborg, T. J., Anantatmula, V., & Wells, K. (2019). Contemporary Project Management. Cengage Learning.
• Mitchell, R. K., Agle, B. R., & Wood, D. J. (1997). Toward a theory of stakeholder identification and salience. Academy of Management Review, 22(4), 853-886.
• Pinto, J. K., & Slevin, D. P. (1987). Critical success factors in effective project implementation. IEEE Transactions on Engineering Management, (1), 22-27.
• PMI. (2021). A Guide to the Project Management Body of Knowledge (7th ed.). Project Management Institute.
• Wang, R., Wang, C., & Fernandez, J. (2018). Managing stakeholder expectations in software projects. International Journal of Managing Projects in Business, 11(4), 898-913.
• Additional scholarly references on stakeholder management principles and best practices would be included as per research depth.