Posted April 9Apr 9 comment_9983 The term stakeholder is familiar to those in project management. These are individuals, groups or organizations that have an interest in or are affected by the outcome of a project. However, not everyone understands that they can be broken down into internal stakeholders and external stakeholders. To understand the difference between internal and external stakeholders, we’ll first define both and offer examples of them in project management. Identifying them is only the first step. After that, we’ll spend some time explaining how to manage internal stakeholders and external stakeholders What Are Internal Stakeholders in Project Management? Internal stakeholders in project management are individuals or groups within the organization who have a direct interest in the project’s progress and outcomes. These stakeholders are typically part of the organization and play roles in decision-making, execution or oversight of the project. Internal stakeholders are crucial for project success because they have direct control or influence over the resources, processes and policies that drive the project forward. Managing their expectations, involvement and communication is vital for ensuring the project aligns with organizational goals, meets internal requirements and maintains smooth execution. Project management tools, such as Gantt charts, are important for internal stakeholders because they provide a clear, visual representation of the project timelines, tasks and milestones. This helps them understand the project’s scope, schedule and progress, enabling them to make informed decisions and track performance. ProjectManager is award-winning project and portfolio management software with superior Gantt charts that provide a clear project overview, offer resource and task management, timeline and milestone tracking and more to improve decision making. On top of that, our Gantt charts link all four types of task dependencies, which identify potential risks, delays and cost overruns. It can also quickly and easily filter for the critical path and set a baseline to track progress in real time to stay on schedule. Get started with ProjectManager today for free. /wp-content/uploads/2025/03/Gantt-CTA-2025.jpgLearn more 6 Examples of Internal Stakeholders in Project Management Internal stakeholders play a key role in the success of a project, as they are directly involved in the project or affected by its outcomes within the organization. These stakeholders are crucial for providing resources, support and oversight throughout the project lifecycle. Below are six examples of internal stakeholders in project management. Project Sponsor The project sponsor is typically a senior leader or executive who provides financial resources and strategic support for the project. They champion the project, ensure it aligns with organizational goals and have the authority to make key decisions. The project sponsor is responsible for securing funding and ensuring the project stays on track. Project Manager The project manager is responsible for the overall planning, execution and delivery of the project. They manage the project team, resources, timelines and budgets, ensuring the project meets its objectives. The project manager communicates with all stakeholders and is the central point of contact for any issues or risks that arise during the project. Project Team Members These individuals are directly responsible for carrying out the tasks and activities required to complete the project. Team members can include subject matter experts, engineers, developers, designers and other professionals who contribute their skills to ensure the project’s success. Their performance and collaboration are crucial for meeting deadlines and achieving project goals. Company Executives and Board of Directors Executives and board members provide high-level oversight and governance for the organization’s projects. They may not be involved in day-to-day project activities, but they make important decisions related to resource allocation, strategic direction and project prioritization. Their approval and support are often required for major project initiatives. Department Managers Department managers oversee the resources, people and processes within their respective departments. They ensure that their teams are properly allocated to the project and that the project aligns with the department’s broader goals. They also assist with resolving any departmental challenges that may arise during the project. Stockholders Stockholders or shareholders are individuals or entities that hold an ownership interest in the company. While they may not be involved in day-to-day project activities, they are considered key internal stakeholders because the project’s success (or failure) can impact the company’s profitability, stock price and overall performance, which in turn affects their investment. These internal stakeholders are critical in ensuring that a project has the necessary support, resources and strategic alignment to be successful. Each stakeholder group has its unique role and responsibility in the project’s lifecycle What Are External Stakeholders in Project Management? External stakeholders in project management are individuals, groups or organizations that are not part of the internal team or organization but have an interest in the project or are affected by its outcomes. While they don’t have direct control over the project, their influence can impact its success, timelines and results. External stakeholders can include clients, suppliers, regulatory bodies and the broader community. External stakeholders often have a broader and more varied range of interests compared to internal stakeholders, and their expectations need to be carefully managed to avoid potential conflicts or issues during the project’s lifecycle. Ensuring regular communication, addressing concerns and meeting their requirements is essential for achieving project success and maintaining positive relationships. 6 Examples of External Stakeholders in Project Management External stakeholders in project management are individuals, groups or organizations that are not part of the internal project team but still have a significant interest or influence in the project’s outcomes. These stakeholders can affect the project in various ways, whether through providing resources, regulatory oversight or end-user feedback. Below are six common examples of external stakeholders in project management. Project Client The project client is the individual or organization that commissions the project. They are often the primary external stakeholder, as they define the project’s scope, objectives and expectations. The client typically has the authority to approve or reject project deliverables and may provide funding or resources. Customers and End Product or Service Users Customers and end users are the ultimate beneficiaries of the project’s deliverables. Their needs, expectations and feedback are crucial in shaping the project’s success. Understanding customer requirements and ensuring the project meets their needs is essential for achieving a positive outcome and customer satisfaction. Regulatory Agencies Regulatory agencies include government bodies or industry regulators that enforce laws, standards and policies relevant to the project. These agencies ensure the project complies with legal requirements, safety standards, environmental regulations and other codes. Compliance is crucial to avoid penalties, delays or legal issues. Business Partners Business partners are external organizations or individuals that collaborate with the project team to achieve mutual goals. These partnerships can involve shared resources, expertise or co-investment. Business partners have a vested interest in the project’s success, as it may affect their business interests or reputation. Vendors and Suppliers Vendors and suppliers provide the materials, products, services or technology required for the project. Their role is critical in maintaining the project’s timeline and budget. Delays or issues with suppliers can have a significant impact on project execution, making their reliability and performance essential for success. Contractors and Subcontractors Contractors and subcontractors are external parties hired to carry out specific tasks or deliver specialized services in the project. They are responsible for completing portions of the work and adhering to project schedules and quality standards. Their performance directly affects project timelines and overall quality. Managing relationships with these external stakeholders and ensuring their expectations and requirements are met is crucial for project success. Regular communication and transparent engagement are key to preventing misunderstandings and ensuring the project delivers the desired outcomes. How to Manage the Internal and External Stakeholders of a Project Managing internal and external stakeholders is crucial to a project’s success. Stakeholders can influence the project’s direction, execution and outcomes. Effectively managing these stakeholders ensures that their needs, expectations and concerns are addressed throughout the project lifecycle. Here’s how to manage both internal and external stakeholders in a systematic and structured manner. 1. Identify Stakeholders with a Stakeholder Register First, identify all potential stakeholders, both internal and stakeholders, who are involved in or impacted by the project. This is done using a stakeholder register, a document that lists key stakeholders along with their roles, contact information, interests, influence and expectations. This list helps ensure no important stakeholder is overlooked and allows for effective communication planning. 2. Create a Stakeholder Map to Analyze and Prioritize Stakeholders Once internal and external stakeholders are identified, it’s essential to analyze and prioritize them based on their level of interest, influence and impact on the project. A stakeholder map visually categorizes stakeholders into different groups, such as high-power, low-interest or low-power, high-interest. This helps you understand which stakeholders require the most attention and engagement, ensuring that resources are allocated effectively. 3. Make a Project Communications Plan to Engage Stakeholders A project communications plan is essential to ensure that internal stakeholders and external stakeholders are kept informed and engaged throughout the project. This plan defines how, when and what kind of communication will occur with each stakeholder group. It ensures timely and consistent communication, addresses stakeholders’ concerns and keeps everyone aligned with the project’s goals, status and deliverables. 4. Report on Progress and Status Periodically to Project Stakeholders Regular updates and progress reports are essential for maintaining transparency with internal and external stakeholders. Periodic reporting allows stakeholders to stay informed about the project’s achievements, challenges and risks. These reports can be tailored to different stakeholder needs and should include key performance indicators (KPIs), milestones and any actions taken to address issues that arise. 5. Implement Stakeholder Engagement Actions Engagement actions refer to the efforts taken to ensure that stakeholders are actively involved in the project and that their concerns are addressed. This could include meetings, feedback sessions or collaborative decision-making. Stakeholder engagement actions should align with the stakeholder map and communication plan to ensure effective and productive interactions. Proactive steps to address stakeholder needs can enhance project support and reduce the risk of conflicts or delays. Effectively managing stakeholders is a continuous process that requires flexibility, communication and timely responses to feedback. By following these steps, you can foster positive relationships with both internal and external stakeholders, ensuring smoother project execution and greater chances of success. Free Stakeholder Management Templates There is more than one way to manage stakeholders. Below are three free stakeholder management templates from over 100 free project management templates available on our site. There are free templates in Excel and Word that cover all aspects of managing a project across multiple industries. Stakeholder Analysis Template Download this free stakeholder analysis template for Excel to identify, assess and manage stakeholders. It helps prioritize stakeholder engagement, address concerns proactively and ensure better communication throughout the project lifecycle. Stakeholder Map Template This free stakeholder map template for Excel is a visual tool to represent and categorize stakeholders based on their level of influence and interest in a project. It provides a clear overview of the stakeholders, how they relate to the project and how their involvement might impact its success. Stakeholder Register Template A stakeholder register is a document used in project management to record detailed information about all the stakeholders involved in a project. This free stakeholder register template for Excel serves as a centralized resource to track stakeholders, their interests, levels of influence and how they might affect or be affected by the project. How to Manage Internal and External Stakeholders With ProjectManager While stakeholder management templates can help project managers and their teams understand the influence and impact of various internal stakeholders and external stakeholders, they’re not a great way to manage them. Instead of using static documents to try and control a dynamic situation, it’s better to add internal and external stakeholders to your project management software. ProjectManager is award-winning project and portfolio management software with multiple project views that allow each stakeholder to use the tool best suited to their needs. Whether that’s kanban boards, task lists or a calendar view for a monthly overview of progress. Plus, guest licenses give external stakeholders access without being able to edit plans. Stay Productive With Resource Management Tools Internal stakeholders, such as project team members, can be onboarded to the software, which then can set their availability, pay rate and skill set. This ensures that the right resource is assigned to the right task at the right time. Project managers can view resource allocation across one or multiple projects by viewing the color-coded workload chart. They can quickly see who is overallocated or underutilized and balance the team’s workload without leaving the chart. View activity on the team page, which can be filtered by progress or priority and tasks are updated without leaving the page. /wp-content/uploads/2023/01/Team-Light-2554x1372-1.png Keep Stakeholders Updated With Real-Time Dashboards and Reports Whether an internal stakeholder or external stakeholder, project data is critical. Both can get a high-level overview of the project’s key metrics by toggling to the real-time project or portfolio dashboards. There’s no setup required to view time, cost, workload and more on easy-to-read graphs and charts. Project managers can focus on specific data points by using customizable reports on status, workload, timesheets, variance and more. Then, filter the report for a more general summary and share it with external stakeholders to keep them updated on progress. Even our secure timesheets help by tracking labor costs to stay on budget. /wp-content/uploads/2022/07/Dashboard-light-mode.jpg Related Stakeholder Management Content There’s more to stakeholder management than identifying who is an external stakeholder and who is an internal stakeholder. For those who would like to read more about the subject, below are some more recent posts we’ve published on our blog. Stakeholder Salience Model in Project Management What Is Stakeholder Theory? Free Stakeholder Management Templates for Excel & Word How to Manage Stakeholder Expectations Stakeholder Mapping 101: How to Make a Stakeholder Map Stakeholder Engagement in Project Management ProjectManager is online project and portfolio management software that connects internal and external stakeholders, whether they’re in the office or out in the field. They can share files, comment at the task level and stay updated with email and in-app notifications. Join companies like Avis, Nestle and Siemens who use our software to deliver successful projects. Get started with ProjectManager today for free. The post Internal Stakeholders vs. External Stakeholders in Project Management appeared first on ProjectManager. View the full article
