Aligning Stakeholder Goals in Custom Software

In the dynamic and highly competitive world of technology, custom software development projects are increasingly becoming arenas of intense competition. A significant oversight many companies commit to is neglecting to consider the interests of every stakeholder involved in creating and utilizing the product. Ignoring the perspectives of various groups, ranging from the client’s employees to the end-users, is not a mere oversight; it’s a strategic error that could jeopardize the entire project. Achieving a balance among the varied and often conflicting needs and expectations is undoubtedly challenging. However, this challenge is pivotal in determining whether a custom development project will emerge as an example of innovation and customer-centricity or flounder due to a restricted viewpoint and the disregard for various influences. This article aims to shed light on why it’s critical to meticulously consider the concerns of all stakeholders, not only as a best practice but as a fundamental necessity for the success of any custom development project. We will begin by discussing a typical scenario contractors often face in such projects.

Understanding Stakeholders: A Disclaimer

Initially, it’s essential to define the stakeholders in relation to our project. Stakeholders encompass individuals or groups that contribute to the project’s business goals, have a vested interest in its outcomes, and impact its progress and final results. This includes the end-users and those responsible for the software’s upkeep post-development. Key stakeholders typically consist of the customer or product owner, the customer’s management team, experts in information security, those who control the budget or are shareholders, partners, and finally, the users or clients.

The Project Gone Wrong: A Common Scenario

Let’s examine a common scenario to illustrate how a project may progress and the potential outcomes, particularly when the interests of certain key stakeholders are overlooked.

At the launch, the product owner validates the business requirements for the software under development, and the contractor’s analyst drafts a detailed technical specification (DTS) aligning with these requirements. Once approved by the client, this document becomes the cornerstone of the formal software development agreement. The project kicks off, the team is assembled, and development progresses smoothly in line with the agreed-upon schedule for several months.

Issues emerge when an end user, previously uninvolved in the approval process, voices dissatisfaction with the outcomes of the initial stage. This criticism catches the financial controller’s attention, prompting a meticulous review of the completed work and its terms. The controller firmly states that no extra resources or time will be allocated for additional software features deployment.

Complications intensify when it’s revealed that the client’s project manager lacks the authority to modify the project terms. This situation leads the client to halt payments for completed tasks and appoint a new manager who disavows prior agreements. Furthermore, conflicting requests from end users in various departments intensify the rift between the client and contractor.

As tensions reach a breaking point, the client company’s CEO steps in, soon followed by the security department enforcing restrictions that render the software almost inoperable. Ultimately, the steering committee, inclusive of all major stakeholders, decides to discontinue the project due to inadequate coordination and attention to detail from all parties involved. Consequently, the project is suspended, and the client refuses to cover the contractor’s already-incurred expenses despite earlier agreements.

Debriefing: Identifying the Missteps

The narrative concluded with disillusionment. The client determined that contracting and bespoke development didn’t align with their product needs, and the development firm faced the recurring challenge of clients not having a definitive grasp of what they wanted. Let’s examine the underlying reasons for the issues described earlier.

Before The Project Launch

1. Partial Participation of Key Stakeholders: When discussing business needs and formulating the Detailed Technical Specification (DTS), essential stakeholders such as end users, budget holders, and compliance engineers were not fully engaged. This resulted in a DTS lacking key aspects, missing vital user requirements and safety standards.
2. Formal Ratification of DTS and Contract: Stakeholders formally ratified the DTS and the Master Service Agreement without thoroughly examining its specifics, leading to a lack of constructive feedback and an insufficient comprehension of the requirements.
3. Ambiguity in the Project Manager’s Role: The scope of authority and the boundaries of responsibility for the client’s project manager were not distinctly outlined or agreed upon at the beginning of the project.
4. Discrepancies in End Users’ Perspectives: There was no consensus among end-users regarding the desired functionalities of the software being developed, preventing the formation of a unified agreement.

While The Project Unfolds

1. Exclusion of Key Stakeholders from Communication: Key stakeholders, including end-users and budget owners, were excluded from the project’s communication channels. They were not engaged in project meetings, did not receive progress updates, and had no opportunity to provide input.
2. Inadequate Information Flow to Management: The product owner and client-side project manager failed to ensure the timely, accurate, and comprehensive communication of project issues and progress to senior management and budget holders. This resulted in information being either concealed or distorted.
3. Budget Owner’s Late Involvement: The budget owner joined the communication process only after end-users expressed dissatisfaction with the project’s outcomes.
4. Top Management’s Belated Intervention: The CEO and compliance department actively stepped in to address issues and influence the project, but only after the situation had reached a critical stage.

Essential Strategies: Preventing a Crisis

Let’s examine essential guidelines that software service providers should employ to ensure effective engagement with stakeholders throughout the development process, from defining business requirements to delivering the final or intermediate product to the client:

Identify Key Stakeholders: Recognize and actively involve the project’s most critical stakeholders, including those with decision-making authority and the capacity to impact project outcomes.

Understand Stakeholder Interests: To enhance the accuracy of project planning and development and gain insight into stakeholders’ needs, expectations, and priorities.

Engage Stakeholders in Planning: Ensure that representatives from diverse interest groups participate in the initial planning stages to formulate comprehensive business requirements and technical specifications.

Foster Open Communication: Establish transparent communication channels with all key stakeholders, incorporating surveys and meetings to integrate their perspectives and ideas.

Implement Stakeholder Engagement Processes and Tools: Create processes for reviewing and approving requirements, facilitate collaborative planning, and conduct regular demonstrations involving key stakeholders.

Educate and Informing Stakeholders: Raise awareness among clients and other pivotal participants regarding the significance of considering the interests of all stakeholders.

Facilitate Collaborative Decision-Making: Engage stakeholders in decision-making throughout all development phases, documenting and providing mutually agreed-upon agreements.

Manage Stakeholder Expectations: Conduct a realistic assessment of project capabilities and establish clear expectations while providing information about risks and risk management and aligning project priorities, timelines, and objectives.

In Conclusion

In this article, we have delved into the common issues in custom software development projects when relevant stakeholders are not engaged on time. We discussed how it impacts project planning, progress, and outcomes and offered essential recommendations for effective stakeholder management to mitigate risks and challenges. In the upcoming article, we will explore typical approaches to project organization and management Auriga offers to our customers and partners. To conclude, it is crucial to underscore that prioritizing the interests of key stakeholders and maintaining their active involvement is pivotal to achieving the following project goals:

• Client Satisfaction: Considering all stakeholders’ interests ensures that the software aligns with the client’s expectations and requirements, identifying crucial needs and objectives.
• Conflict Mitigation: Addressing diverse interests helps prevent conflicts by seeking compromise solutions and considering different viewpoints.
• Enhancement of Product Quality: Varied stakeholder perspectives contribute to creating software that caters to different user groups, thereby improving product quality and functionality.
• Successful Project Execution: Incorporating the interests of all stakeholders facilitates realistic planning and contributions from all project participants, ensuring efficient project completion within established timelines and budgets.