What’s the difference between a stakeholder and a supplier?
I was asked this question recently and I thought it was quite simple to answer. It turns out, as I started to formulate my response, that it is a lot harder to pin down than I anticipated.
Partly, I think, that’s due to the “flexible” nature of project management jargon. What’s a stakeholder for me might not be so defined by the methodology you use, or the common terminology used by your PMO.
I think the difference is easier to explain if we look at what each of them is. The comparisons, similarities and differences then become more transparent.
What is a Stakeholder?
For me, a stakeholder is anyone who has an interest in the project.
Primary stakeholders are those who do the process. They agree what will and won’t be in scope of the project. They know how much they are prepared to invest, both in terms of time and money. This group is going to shape the project and includes your project sponsor and the people who sit on your Project Board.
Secondary stakeholders have less of a vote in the way the project is run and the outputs it will achieve. They may shape and define the result, and you’ll listen to them as they are affected. The project might be quite challenging for them, and you’ll want to involve them, but they aren’t key decision makers. This group would come to meetings, maybe take part in a workstream and do smaller tasks.
Interested stakeholders are curious. They might feel like they want a say but they have no managerial interest in how the process is performed, they are not a supplier, and they are not involved in delivering the project or process. These are people you meet at the water cooler or coffee machine. They have a view, but you may or may not want to listen to it. It would depend on their level of influence over the opinion of people you do rate on the project.
Stakeholders can be internal or external. Internal suppliers work within your organiation, so your peers, managers, colleagues. They are people on the payroll of your business.
External stakeholders are the opposite: they are people outside your organisation, and that includes suppliers.
What is a Supplier?
When most people think of suppliers we think of organisations from whom we buy goods and services for our project. This would include:
Hiring equipment e.g. cement mixers, venue hire, kit of a any kind
Providing a service e.g. contract developers, subject matter experts brought into the project for a particular purpose such as specialist lawyers, trainers. Contract staff members joining the project team would fall into this category, even if they were on staff for the duration of the project and work as if they are a member of the in-house team.
Providing goods e.g. vendors from whom we purchase equipment or products for the project like computer chips, raw materials, steel etc.
These organisations or individuals are normally external. You can’t source the goods or services in-house so you go externally to procure them.
The other thing they have in common is that we typically pay for them.
However, suppliers could be internal, if your internal labour market is set up that way. IT, for example, could be a supplier of development resource to your Sales project, and they could charge you for the time and effort of the team involved. In this respect they would be a supplier and would act like one. You’d probably have a formal statement of work, estimates drawn up and so on.
I’ve only worked in one organisation like this but it is perhaps more common than you think, especially in the biggest organisations and the public sector. Personally I’m not convinced of the value of this kind of internal economy, but I mention it because there might be times where a supplier (in terms of your project) is actually someone who sits down the corridor from you and works for the same entity.
Managing Suppliers as Stakeholders
I think we can conclude that suppliers are a subset of your stakeholder group. They should be managed and engaged as any other stakeholder group. That means including them in your stakeholder analysis.
It’s important when working with people who are strategically important to the success of your product e.g. package software provider, to think about their involvement in the project and to do what you can to set them up for success. In other words, you could involve them in project communications. They might need slightly different versions of your communications because you might not be able to share company confidential information with them, but broadly you should treat them as per your stakeholder analysis suggests.
To conclude, suppliers have a distinct role to play but they appear in my stakeholder management plan. I would put suppliers as a sub-group of my stakeholders. I would classify them as external primary stakeholders. In other words, they have a core role to play and are influential in both shaping and delivering the project, but they aren’t employees.
How would you state the difference between a supplier and a stakeholder? Perhaps you can do it in fewer words than me! Let me know in the comments section below.