Stakeholders in the Software Development Process: Identifying and Distributing Responsibilities

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A good discovery process is critical to software development. The requirements that are generated at this stage form the backbone of the entire project, setting it up for success or failure. Getting all stakeholders involved right from the start is the single most effective step developers can take to ensure a project’s success, but identifying these stakeholders is not always easy.

Companies that are in a rush at the discovery stage may lose sight of those whose support they need in the future. This is why identifying stakeholders should be a deliberate process during the first steps of the discovery stage.

Who are the stakeholders in the software development process?

The term “stakeholder” refers to people or groups that are affected by a software. In any case, they are interested in the final product.

Stakeholders can tell a company what software is needed and suggest ideas for features as well as problems to be solved. They can also create use case diagrams and workflows that define the user interface for new software. 

Why are stakeholders important?

It’s risky to neglect stakeholders. First of all, without introducing them to the team, your developers will work with an incomplete list of requirements. 

In the case of delay, the initial time and budget requirements must be increased to cover new needs. This is not always possible. It is much more likely that some features will have to be cut to meet the deadline. But even if the deadline and budget are met, missed contributions have consequences. 

Sometimes, software turns out exactly the way management wants it, but employees don’t use it. Maybe they already have better tools, or maybe they find the new software is missing features they need. But regardless of why employees don’t use software, a lack of enthusiasm to adopt software makes developing it a poor investment.

This is especially true for small and niche groups whose needs are usually overlooked. During the software development process, there’s room for adding new requirements. However, requirements should be added in response to constant feedback and not as duct tape to patch up a poor requirements gathering process.

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Types of stakeholders in project management

In project management, there are two main types of stakeholders: internal and external.

Internal stakeholders

These stakeholders are people or groups within your company, such as team members, managers, and executives.

External stakeholders

External stakeholders are people or groups outside of your company, including customers, users, suppliers, and investors.

As you can see, stakeholders don’t always work for you (the project manager). Needless to say, this can add an extra layer of complexity, as you need to be able to connect with people at all levels of the business and with varying degrees of involvement, influence, and interests.

Who is considered a stakeholder?

While each development project is unique, there are several general categories of stakeholders.

End users and beneficiaries

These are the people the software will directly affect. Their participation in the development process is very important. No matter how attractive or effective software is, if end users don’t like it, they won’t use it. End users fall into three main groups:

Direct users

Direct users are those who will use the software directly. They are usually most concerned about how it will fit into their current workflows. They want to know that the software solves a significant problem or otherwise facilitates their work.

Secondary users

While direct users interact with the software itself, secondary users rely on products created by the software. New software should provide results in a format that fits into the workflow of secondary users. By ignoring secondary users, your software might create reports in a format that can’t be integrated into your analytics system.


These are all the people affected by your software. The term “beneficiaries” covers a huge base of customers and suppliers, who are more focused on results than on the development process. Their contribution should revolve around the services or information your software will provide.

Project build team 

A good software development process balances dreams and reality. End users sometimes create lists of unrealistic features and requirements.

The build team serves as the voice of reason that keeps the project manageable.

Their task is to find a way to accomplish as much as possible from the list of desires in order to achieve business goals, meet deadlines, and stay within budget. Each member of the build team has different goals.

Managers and company liaisons

These people make the final decisions on timing, budget, and scope. They can increase the time allocated for development or reduce the project’s scope.

Project managers and business analysts

Project managers shape the development process, tracking all moving parts for maximum efficiency and serving as a point of contact for other stakeholders. Their main interest is creating a reliable product and satisfying customers’ needs.

The project manager is responsible for planning, organizing, and controlling activities in accordance with established timelines. A project manager must know all necessary information about a project, including its requirements, scope, and goals. The project manager is considered an internal stakeholder because they are involved in the development process.

A project manager communicates with stakeholders outside the company and connects them with the development team. 

Business analysts make predictions to understand the budget and how much time should be spent on a project. They work on detailed requirements and decompose projects.


Developers build software based on feedback from other stakeholders, but they are also stakeholders themselves. Developers have the technical expertise needed to advise management on what features can be implemented and how long it will take to build each one.

Developers work in sprints. After each completed sprint, the development team discusses what they have done and what they need to do next. To make the software development process efficient, software developers should be involved in discussing the backlog from the beginning.

A team of developers can also include team leaders, designers, and testers. The most important task of a developer as a stakeholder is to ensure timely delivery and evaluate software. A quality assessment provides a clear understanding of the entire development process, the scope of work, and required resources.


Partners are defined as external groups that participate in the actual development process. They can be owners of third-party tools or business partners of the customer who need to ensure compatibility with their systems.


Some people are not directly involved in the project but somehow have power over it. These include legal and regulatory bodies, shareholders, and company owners. Although they do not interact with the software on a daily basis, they regulate its use. Be sure to ask their opinion during the discovery stage to avoid issues in the future.

Each of these categories can be divided into internal and external stakeholders. Internal stakeholders are part of your company: managers, employees, board members, etc. Their goal is to solve pressing business problems by streamlining processes, increasing sales, obtaining more accurate information, or providing other measurable benefits.

External stakeholders are outside your company and include clients, regulators, officials, and surrounding communities. They want to get the most out of the project with the least risk to their own interests. Internal and external stakeholders have seemingly conflicting motives, but in practice there is a middle ground in which everyone can find value. Collaboration between different groups of stakeholders is key to finding this middle ground.

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How to do a stakeholder analysis

1. Identify stakeholders

In the first step, you need to identify who your stakeholders are. To do this, use your project charter and any other project plans and documentation to compile a complete list of your project’s stakeholders, both internal and external.

Keep in mind that some stakeholders will only come into play later in the project lifecycle, but if you can anticipate who they will be in advance, you can start getting their support by building relationships and helping them feel involved from the very beginning.

2. Prioritize stakeholders

Once you have identified all the stakeholders, you can begin to prioritize them. Prioritizing stakeholders is important because it helps you understand where to invest your resources. In other words, it helps you as a project manager to identify who is making the key decisions at any given moment so you can be sure you’re talking to the right people at the right time.

3. Understand your stakeholders

Now that you know who the key players are and whose needs you should prioritize, you need to get a full idea of your stakeholders’ expectations from the project. For key stakeholders, you might do this by conducting short personal interviews or holding conversations in which you discuss things such as:

  • The definition of project success
  • Concerns or reservations about the project or its results
  • Expectations for the project
  • The impact on the stakeholder of a positive or negative project outcome
  • Any anticipated conflicts of interest with other stakeholders that you need to be aware of

These conversations will not only help you understand each stakeholder’s involvement and views on the project but will also help you build a broader picture of your stakeholder network and how all stakeholders interact with each other.

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How to manage your project’s stakeholders

Identifying stakeholders and their needs is only part of the stakeholder management puzzle. For a successful project, the requirements, goals, and satisfaction of your key stakeholders should be an ongoing concern throughout the project.

This does not mean that stakeholders are always right, however — and your job as a project manager will sometimes involve confronting stakeholders and redefining their expectations by referring to the project charter and project plan that all stakeholders agreed on at the beginning of the development.

The tricky part is balancing stakeholders’ needs, requirements, and goals to keep all stakeholders happy while simultaneously completing the project you set out to implement. Here are some ways to leverage best practices in stakeholder management and improve stakeholder relations at every stage of your project.

Document each stakeholder’s roles and needs

Take advantage of all the work you have done to identify stakeholders and their individual needs by compiling the information you’ve collected into a shared document to make sure you have a record of all roles and responsibilities and that all stakeholders are on the same page.

Creating a stakeholder register for your project will help you keep track of a long list of people and priorities. By having a detailed document that you can update, edit, and consult as your project progresses, you can be sure you’re always taking the project in the right direction and keeping the right people in the loop at the right time.

Communicate with your stakeholders

For a project manager, communication, participation, and engagement with stakeholders throughout the project lifecycle is critical. Your priority stakeholders can change throughout the project, and knowing whose input you should prioritize at any given point in time means you can direct your energy where it’s needed and not overwhelm people with unnecessary information.

Even though you want your stakeholders to be visible, excessive communication can be as unpleasant as a lack of communication. Using a project management tool with many different communication options means you can tailor your notifications to the needs of each stakeholder while maintaining a complete audit history of each activity and decision (which is especially handy when it comes time for reporting).

Give project stakeholders visibility over what matters to them

stakeholders in software development
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Help each stakeholder cut through the noise and immediately gain insight into the metrics that matter most to them by creating custom dashboards. You can create personalized dashboards for stakeholders to track things like tasks, project statuses, team actions, milestones, risks, and more so your stakeholders can quickly see how certain parts of the project are progressing and get an immediate overview of the information they’re interested in.

Final thoughts

Effort spent during the discovery stage translates into money saved during development. Take time to gather the views of all stakeholders and take advantage of a smoother, more focused development process.

If you have any questions regarding stakeholders in software development projects, contact Mobindustry for a free consultation.

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