Project sponsor and project customer: what’s the difference?

In a recent LinkedIn Live session, someone asked, “What exactly is the difference between a project sponsor and a project customer? Sometimes, the sponsor is also the customer, but the roles have notable differences: 

Authorizing or terminating the project. The project comes about because the project customer has a problem to solve or opportunity to pounce on. And the project customer’s needs must be met for the project to be a success.

However, it’s the project sponsor who authorizes the project launch, usually by signing a Project Charter. (The Charter also names the project manager and lays out their responsibilities and authority to manage the project.) The sponsor can also cancel the project should business conditions change or due to poor project performance. The project sponsor typically consults with the project customer before launching or terminating the project. Bottom line, the sponsor makes the final decision.

Directing project governance. The sponsor owns responsibility for meeting the terms of the project’s business case.  The sponsor is responsible for managing the project manager, sharing project status, ensuring customer needs are met, authorizing risk response actions, and handling issues that the project manager can’t resolve. While much of the work related to these responsibilities sits with the project manager, the project sponsor has the ultimate responsibility to ensure the project is managed with sound business judgment.  On the other hand, the customer’s role is to comply with project governance and inform the project manager if governance is being compromised within the business area they represent. For example, customers need to analyze change management requests to ensure they are in the best interest of the customers’ business areas.

Funding. The source of funding may come from the sponsor’s budget or from the budgets of project customers. The project sponsor, however, controls allocation of funding for the project and management of any project contingency funds. Decisions on the release of funding to obtain project-related equipment, supplies, and contracted skills or to pay employees assigned to the project are made by the project sponsor. If finances are constrained, the customer typically helps prioritize deliverables. The customer and sponsor will discuss different business scenarios, and then the sponsor decides on the final prioritization.

Assigning and prioritizing project resource work. The customer informs the project manager of staffing constraints due to existing workloads, but that’s where their responsibility stops. The project sponsor allocates the skilled resources needed to complete project tasks. This allocation often involves prioritizing workloads, because many project resources don’t work full-time on projects. They have their “day jobs” and project work represents responsibilities over and above their normal workloads. The project sponsor often needs to relieve staff of some of their normal work responsibilities to allow project tasks to be completed on schedule. Project resources often report to managers other than the project sponsor, so negotiation is required to get the resources necessary to meet project deadlines.

For more about project sponsor and customer roles, check out my Project Management Foundations course.