Should Project management be outsourced?


Should you outsource your project management or keep it under your own people would not be a straight answer since the decision would depend on a number of . A “project” can be viewed as an external deliverable to the enterprise or at times project is viewed more as a core strategic activity within the enterprise. If more strategic than outsourcing would be second option!

Project Management particularly in sunrise industries e.g. IT/Telecommunication is fast emerging  as a professional discipline. Over the last decade there has been considerable awareness in firms and organization to dedicate skilled & qualified people into the role instead of someone who happens to be available to coordinate. This is a welcome trend, however again organizations who do not have a governance body or core skills in PM can look for independent PM professionals or PM consulting firms who may fill the gaps.

I feel that one of the main reasons for failing projects is that the supplier side of the project also does the PM. This is also described in the PRINCE2 approach: customer and supplier have opposite Business Cases. Generally more a project spends, the happier the supplier. Cost of the customer is basically turn over for the supplier. So it is difficult to expect a supplier PM to keep the project (financially) under control unless it is a fixed bid project. Hence there is a strong case for an independent PM to manage enterprise critical project/programs where owner does not have a matured PMO organization.

Generally, the supplier who also happens to provide project Management would be more concerned for meeting what is ASKED FOR rather strategic objectives (if not asked for). Pre dominantly PM is assumed to be supplier responsibility & project fail often more due to gap in priorities of supplier and customer.

And yes, it is the customer responsibility to ensure that stated goals of the projects are well documented and measurable. If that is not done supplier cannot be held accountable for him the project is Successful if it delivers what was Asked For even if it was a waste of money for customer.

Having led several enterprise level projects myself, I found that lot many times customers themselves do not have a deep clarity on strategic goals of the project they want to initiate & not wonder as project progresses their goals too keep changing resulting in significant time delays, and more budget than planned. On top of it, once project is delivered, the usage & adoption challenges remain.Especially in IT projects, it not very uncommon scenario! Who do you think is to blame here? What kind of customer satisfaction ratings can be expected in such projects!

in case a consulting vendor is entrusted to manage end to end project, he is more likely to have a say in team with some influence from client. If he is to manage an existing team from vendor it might be some time before optimum results can be expected.

We see cases where project types changing mid way in large projects. May be it’s nice to have a T&M project type for pilot projects to understand project dynamics of a large longer term project! It would also help establish credibility of appointed Consulting PM org.

One more interesting issue that doesn’t get noticed is that management of project is more or less considered ‘free’ service by most buyers, may be that’s the reason suppliers have no option but to do it themselves! Also PM is applicable to wide range of industries, in fact many old economy sectors have more sophisticated PM practices while PM practices in IT are still evolving.

Well…no doubt an outsider would take time & would need money (internal PM is a cost too!) however, an outsider is most likely to be impartial & more focused on outcome in addition to bringing in top level skill set and proven domain experience.

With an appropriately organized project board, yes, project management can be outsourced. However the PM needs to be well versed in the sponsoring customers business / technical skill set and needs to have a strategic vision and fit. So if I was responsible for a project, the outsourcing decision should be based on finding the PM with the right (business!) skill set.

One thing that surprises me lot is that its not uncommon to have two different perspective from supplier Vs customer definition of project success. A logical conclusion should be to rate the vendor poorly on which the project failed and re-shuffle the Pre-qualified suppliers. Still, why don’t we see that many supplier churns in particularly large size projects! Customers seem to go back to same suppliers time and again despite having different views on success of completed projects. I know several large vendors in IT and capital goods sector who got repeat business despite average or below average ratings! But then that is another thing to ponder on! 🙂

Shyam Verma, PMP, ITIL
Program & portfolio mgnt professional
LinkedIn:spverma. Twitter: Shammy11

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