Stakeholder Management: The Key to Successful System Modernization

Imagine embarking on a large-scale system modernization without properly managing stakeholder expectations. The result? Resistance, confusion, and even project failure. Stakeholder management is crucial in mitigating these risks by fostering a sense of ownership and commitment among stakeholders. In this post, we share some of the tactics and benefits of effective stakeholder management, and we discuss some of the risks, too. Let’s dive in.

In our first post in the series, “From Confusion to Cohesion: How OCM Enhances System Modernization,” we introduced our approach to Organizational Change Management (OCM) and highlighted the importance of a comprehensive OCM strategy in overcoming the challenges of system modernization.

Our next post discussed assessing and boosting your organization’s preparedness for transformation. Key factors included leadership commitment, employee engagement, resource availability, and strategic alignment. Today, we continue developing this knowledge with an eye toward the many stakeholders involved in enterprise-wide transformations.

Understanding Stakeholder Management

Think about planning a big family reunion. You’d start by figuring out who to invite—immediate family, extended relatives, close family friends. Naturally, you’d take the time to get to know their preferences and needs, like favorite foods or special accommodations. To keep everyone in the loop, you might send out invitations, ask for input on the menu and activities, and update everyone on the plans. Everyone knows their roles, whether it’s bringing a dish or helping with setup.

By planning with input, you make sure the reunion is a great event for everyone. The same goes for a project—effective stakeholder management keeps everyone aligned with the project’s goals, boosting the chances of success.

Stakeholder Management is essentially about figuring out who has a stake in your project and making sure they’re on board with what you’re doing. It’s about building relationships, understanding what everyone needs, and keeping them informed and involved every step of the way.

The Role of Stakeholder Management in System Modernization

System modernization projects often involve significant changes that can impact various stakeholders, including staff, system users, vendor partners, and, ultimately, the people served or impacted by the programs these systems help coordinate and administer.

In a recent project, our team worked with a state agency to modernize its healthcare information system. The project involved integrating multiple systems and required collaboration across various departments and external partners. By implementing a robust Stakeholder Management plan, we identified key stakeholders, understood their concerns, and effectively engaged them throughout the project lifecycle.

So, what does engaging stakeholders really mean? For this project, we talked to people through interviews, surveys, and workshops to understand their commitment to the organization, knowledge of the project, and influence among their peers. We used this information to create a detailed plan to keep stakeholders involved. This plan included participation from leadership, focus groups, town hall style forums, and regular updates through newsletters and other project communication tools.

The result? The project was finished on time and within budget, with little resistance and high satisfaction from the stakeholders. The agency saw better service delivery and an improved user experience, leading to a more unified and efficient system.

Key Components of Stakeholder Management

To nail stakeholder management, you need a solid plan. Start by figuring out who the key players are and what they care about. Then, keep them in the loop with clear and regular updates. And don’t forget to keep an eye on how engaged they are and tweak your strategy as needed to keep their support.

• Identify Stakeholders: Figure out who has an interest in your project and what their needs and expectations are.
• Plan Engagement: Create a plan for how you will keep stakeholders involved and informed throughout the project.
• Communicate Clearly: Make sure to share updates and information regularly in ways that everyone can understand and appreciate.
• Monitor Engagement: Keep an eye on how well stakeholders are engaged and make adjustments as needed to ensure their continued support.

The Risks of Poor Stakeholder Management

Failing to manage stakeholders effectively can lead to several risks, including:

• Project Delays: Without proper stakeholder alignment, projects can face significant delays due to resistance, confusion, and lack of cooperation.
• Increased Costs: Mismanaged stakeholder expectations can result in costly rework and adjustments.
• Decreased Morale: Poor communication and engagement can lead to frustration and decreased morale among staff and other stakeholders.
• Reputation Damage: Failing to address stakeholder concerns can harm the organization’s reputation and credibility.

But don’t take our word for it! This client feedback from a state Medicaid agency offers a great description of effectively managing risk:

“Impressive stakeholder engagement with a variety of groups, accommodating a complex schedule for gathering, organizing and validating feedback towards producing the deliverables as required and achieving it all in such a short amount of time – risk well monitored and mitigated.”

Benefits of Effective Stakeholder Management

Stakeholder Management isn’t only about mitigating project risks. Effective stakeholder management offers several benefits. The trick is to engage your stakeholders early and often. This approach builds trust, reduces resistance, and boosts the chances of your project’s success because stakeholders feel involved and valued from the early days of project kick-off all the way through go-live! Plus, getting stakeholder insights and feedback along the way ensures better overall decision-making when risks or delays arise.

Wrapping Things Up

Stakeholder Management is a critical component of our OCM practice area and plays a vital role in the success of system modernization projects. By identifying, engaging, and collaborating with stakeholders, we can ensure that the changes are embraced and supported, leading to a smoother transition and better outcomes for all involved.

As always, if this post catches you with plans for enterprise-wide transformation or system modernization in your business plan, we’d be thrilled to be a part of your success. Drop us a note.