When you think about project funding, you would think about Project Sponsor Role. So what is the role of Customer? Doesn’t Customer provide funds for the project? Is Project Sponsor same as Customer?
I am often asked these kind of questions during PMP and other project management training workshops. Let us look at the definition of Project Sponsor and Customer, and understand their role in order to answer these questions. In the ensuing discussion, I have considered Customer and Client as synonymous.
Project Sponsor and Customer – Definitions
A person or a group who provides resources and support for project, program, or portfolio and is accountable for enabling success
Customer is a person(s) or organization(s) that will pay for the project’s product, service, or result. Customers can be internal or external to the performing organization.
Before we discuss further, you should refer to Max Wideman Glossary and read some other standard definitions. These are more comprehensive.
You would find the PMBOK Guide’s definitions somewhat confusing. As per the its definition, customer pays for the project’s product. This is bewildering, especially if you had the notion that Sponsor provides funding for the project. Moreover, the definition states that the customer could be internal or external to the performing organization. Let us look at the definition of Performing Organization as well.
Performing Organization (PO)
An enterprise whose personnel are most directly involved in doing the work of the project or program.
So, what does these definitions imply? If Customer’s Organization (CO) is paying for the project’s product, does it mean that Sponsor is part of the CO? Or does it mean that Sponsor has no role in funding of the project. Let us understand the major role of Project Sponsor and Client in a project.
Difference Between The Role of Project Sponsor And Customer
Here is the simplified version of the definitions.
- will pay for the project’s product.
- will give the products’ requirements and reap benefit from the product (usually long after the project is over).
- may or may not be part of the Performing Organization.
- is usually part of the Performing Organization.
- will decide how much funds will be used for the project. She/he will take budgetary decisions.
- will appoint the Project Manager and provide necessary support to her/him.
Generally, for projects that are done for profit, the Sponsor is part of the PO. But she/he can be part of the CO, especially if the project is not done for profit.
Let us consider 2 different projects that are done by a PO under a contract from an external CO.
A project done for profit – The Client agrees to pay $100K for a fixed price project. The Sponsor from the PO decides to do the project for $80K and rest will be deemed as profit.
A project done for a social cause – A Donor Agency (Client) initiates a disaster management project. It contracts an independent non-profit organization (PO) to meet project’s objectives. The Sponsor from the Donor Agency will take decisions about the project budget and disburse the funds as needed to manage the costs.
To conclude, it would not be a travesty to say that this blog is sponsored by Praveen Malik. 🙂
Do you still have any confusion? Please share your opinion in the comment box below.
5 thoughts on “How is Project Sponsor Role Different From Customer’s?”
There is nothing in said about external sponsor in this post. In my view the person or group on the client side that initiated this project will be external sponsor on the project.
Read the second situation – it talks about external sponsor.
The case is:
I must prepare a project of design a camping park for motor-homes.for a real-state company. That company is who pay the money. But of course the requirements that I must use are for design come from the potencial customers of camping park, the motor-homes travellers. Who are the customer?
Hi Jorge, From the wording of your Q, it seems that real estate co. is your customer. When you “potential customers of camping park”, they are actually end-users (not explained in this article). Your req. would come from real estate co. and not end users. BR.
Hi Gent, from my point of view the customer is the funding organization or individual, The sponsor is group or individual selected by the customer to act as their representative during the project starting (starting could be from the initiation stage or after preinitiation phase) till project closure except if the customer need the sponsor to continuo for operating and maintain of the project outcome.
The sponsor can be internal the organization such as the PMO offices for large companies and also he can be external like hiring consultation company to play the role of PMO
There is another point needs to be understood, the internal and external sponsors are playing the same role which is satisfying their customer and coordinate the project with contractors and vendors to deliver the project goals and objectives.