October 9, 2018
Stakeholder Analysis: Another Key Piece of Product Inception for Building a Successful Software Product
Stakeholders are a vital part of any software project, which makes Stakeholder Analysis a critical part of the Product Inception phase. The only way to make sure that we are building a product that is relevant and valuable is to engage people and understand why they may be interested in the product and bring them into the process. If we don't involve stakeholders from the very beginning, we can easily build an excellent product with great features, but it's possible that no one will want or need to use it.
What is a stakeholder?
A stakeholder is any person or group of people that have a specific interest in the product we are going to build. This will of course include end users and customers but can also include, for example, a leadership team, marketing department, investors, or any number of other people who have an interest or "stake" in the product and its developments.
We've already begun the process of identifying stakeholders on the Product Vision Board, when we listed Target Groups who can also be considered stakeholders.
Say for example, we want to develop a flower delivery app where users can log in and order flowers from a local florist to be delivered anywhere in the city. Our stakeholders might include:
- Customers/End Users: These are the people who will sign up and use your app to order flowers.
- Flower Shops: These are the people who you will need to convince to affiliate with your app and be vendors.
- Marketing Staff: They have to market the product and make it desirable for users
- Investors: They have a financial interest in the success of the product.
What is Stakeholder Analysis?
Stakeholder Analysis is a process of understanding your stakeholders' background and context in order to pinpoint what they want and contrast that with what they actually need.
Once we've identified our stakeholders, we want to ask questions like:
- Who are the stakeholders?
- Where do they come from?
- What is their common background?
- What are they looking for, as a group, from the project/product?
- What is important to them?
- Do they have any specific goals as a group?
During Stakeholder Analysis, we need to determine not only who our stakeholders are but also what is their relationship to the project as well as figure out which stakeholders' concerns we will need to prioritize throughout the project.
Stakeholder Analysis Techniques
There are several different techniques for Stakeholder Analysis at the Product Inception phase. Here are some of our top techniques for analyzing stakeholders:
Product Vision Board
During the process of creating a product vision board, we identified broad target groups, who are ultimately stakeholders. Later on in the inception process, we will have a chance to define these a little more specifically.
See More: Product Vision Board
Stakeholder Mapping: Influence vs. Interest Chart
Every software development project will have multiple stakeholders and at some point, their needs are going to be in conflict. Stakeholder Mapping on an Influence vs. Interest Chart help us to determine each stakeholder's relationship to the product and how we will need to engage them throughout the process.
The chart maps Influence on the x-axis and Interest on the y-axis. The more Influence a stakeholder has, the more necessary it will be to meet their needs. And the more Interest that they have, the more we will need to keep them informed about the product. When mapping the stakeholders, we need to keep the product at the center at all times.
In our example, we might map our stakeholders in this way:
Our investors will have a lot of influence over the product, because they are the ones financing it. However, their primary interest in this case is in the revenue received from a successful product, rather than the product itself. For this reason, they are High Influence, Low Interest.
In contrast, our flower shops have a lot of influence as well, because their buy-in is necessary for the app's success. However, they also have a lot of interest in the product, as it is a tool for them to increase their sales and improve their business. This makes them a relatively High Influence, High Interest stakeholder that we will have to manage thoroughly.
We always want to build the best product possible, but unfortunately time, energy, and resources are finite, meaning that trade-offs and compromises will be necessary at some point. Trade-Off Sliders are an extremely useful technique for identifying the true needs and priorities of each stakeholder group by giving them constraints and forcing them to make compromises.
In this exercise, we will come up with several attributes of the product. Some of the most common include Feature Completeness, Budget, Speed to Market, Security, Quality, and User Experience, but you can include others that you find relevant for your product as well. We will then ask each stakeholder group to rank these factors into 3-5 importance levels, from least to most important. However, we will given them some constraints that will force them to make concessions and trade-offs to determine what is truly most important for them.
Going back to our flower delivery app, let's say we ask an end user to rank these factors with the following constraints:
- Only 1 factor can be ranked as Critical (5)
- Only 1 factor can be ranked as Important (4)
- All rankings cannot sum more than 18 points in total.
Here's what the tradeoff might look like from their perspective:
The most important thing for this user is User Experience, and Security is also a top priority. If they are going to make payments through the app, they will want to know that their payment information is safe. However, they are not interested in minimizing cost, because they are not affected by the budget.
In contrast, an investor will probably prioritize quite differently:
This investor's top priority is minimizing cost in order to maximize their revenue, while speed to market is also important because they will want to get a product out quickly in order to start generating revenue as soon as possible. User Experience is low priority, however. While desirable, they are much more interested in getting a working product out quickly.
At the end of the day, everything we do, we do with people in mind. Every software product that we develop starts with thinking about something that people need or that people want or a way to make something easier for people. So keeping those people in mind throughout the product inception and development phases is crucial for success.
A thorough Stakeholder Analysis ensures that we not only start the project off on the right foot, but also that we will be able to create a product that is relevant for the people involved, that people will want to use, and that ultimately solves the problem that we began with in the first place.