Have you struggled with a procurement project which had led to various problems such as delays, cost overruns, and even failure. For example, a construction project may face opposition from local residents who are concerned about noise, traffic, or environmental impacts or your bosses are not happy with a current project. Without effective stakeholder management, this opposition could lead to delays, lawsuits, and additional costs. Similarly, a new product launch may face resistance from employees who are concerned about job security or customers who are unhappy with the product's features. Without effective stakeholder management, these concerns could lead to negative publicity and reduced sales.
What is stakeholder management in procurement?
Stakeholder management in procurement is the process of identifying, analyzing, and engaging with various individuals or groups who have a vested interest or influence over a procurement project. The stakeholders may include customers, suppliers, employees, government agencies, investors, and other interested parties.
Why we need stakeholder management in procurement.
Here are some of the reasons why stakeholder management is essential in procurement:
- Understanding stakeholder needs
Stakeholder management helps procurement professionals to understand the needs, expectations, concerns, and goals of each stakeholder. This understanding is crucial in developing procurement strategies that align with stakeholder expectations and objectives. For example, the Fiji Procurement Office conducts quarterly meetings with suppliers to understand their expectations, concerns and enhance contract management for standing offer contracts.
- Building trust and credibility
Effective stakeholder management helps to build trust and credibility with stakeholders, which can lead to better relationships and increased cooperation. This can help to create a more supportive environment for the procurement process.
- Avoiding conflicts
Stakeholder management can help to avoid or mitigate conflicts that may arise during the procurement process. By identifying potential conflicts and addressing them proactively, procurement professionals can prevent delays, misunderstandings, and other negative consequences.
- Ensuring stakeholder satisfaction
By engaging with stakeholders throughout the procurement process, procurement professionals can ensure that stakeholders are satisfied with the results. This can help to build goodwill and a positive reputation for the organization.
- Managing risks
Stakeholder management can help to manage risks associated with procurement. By identifying potential risks, such as supplier performance issues or legal and regulatory compliance issues, and addressing them proactively, procurement professionals can reduce the likelihood of negative outcomes.
- Achieving project success
Effective stakeholder management is critical to achieve project success. By ensuring that all stakeholders are engaged and involved in the process, procurement professionals can create a more supportive environment for the project and increase the likelihood of success.
How to manage stakeholders in Government
Key steps in managing stakeholders must happen during planning stage. Here are some steps to help you manage your stakeholders in Fiji:
- Identify your stakeholders
Simply start by identifying who their stakeholders are. This includes anyone who is impacted by or has an interest in your project, such as customers, employees, shareholders, suppliers, and regulatory bodies.
- Analyze stakeholder needs and expectations
Once you have identified your stakeholders, you need to analyze their needs, expectations, and interests. Ministries should be able to understand from the information gathered what the stakeholders want and how they can contribute to your project.
- Prioritize stakeholders
Not all stakeholders are equally important. Some have a higher impact on your project than others. Ministries should prioritize stakeholders according to their influence and importance to the project.
- Develop a stakeholder engagement plan
Ministries can develop a stakeholder engagement plan that outlines how you will engage with your stakeholders throughout the project. This plan should include how you will communicate with them, what information you will share, and when you will involve them in decision-making. It is important to communicate with all shareholders and not leave them to assume what is being done.
- Engage with stakeholders
Engage with your stakeholders throughout the project. Keep them informed of project progress and any changes that may affect them. Involve them in decision-making and seek their feedback and input.
- Monitor and manage stakeholder engagement
Ministries to continuously monitor your stakeholder engagement to ensure that it is effective. Address any concerns or issues that arise and adjust your stakeholder engagement plan as needed.
- Evaluate stakeholder engagement
To enhance stakeholder engagement, Ministries can evaluate the success of stakeholders at the end of the project and use this evaluation to improve your stakeholder engagement plan for future projects.
Key takeaways about Managing Stakeholders
Managing your stakeholders is essential to the success of your project. In Fiji, this is an area that we will need to improve on. Starting with a management plan in place will make it easier to identify problems early on, communicate effectively, and maintain the project's direction. Managing stakeholders entails establishing productive and positive relationships with them. Stakeholders will become strong project partners and supporters as a result.
Prepared by: Ms Petrina Underwood