Outsourcing

Outsourcing a project does not relieve you of responsibility


The outsourcing of project work is more common today than ever. But even though you outsource the work, you can't completely outsource your obligation to make sure the project is progressing smoothly. If all goes well with the outsourcer, you don't have much work to do. But many times the outsourcer doesn't perform to your expectations. If that happens, you want to know about it as soon as possible.

On a normal internal project, the project manager is held accountable for the success of the project, while other people monitor the work. On an outsourced project, the roles are still in place, but the vendor project manager is the one who's worried about the details of managing the work. The client project manager (you) takes on the role of monitoring the work and the progress. You need to ask the right questions to make sure the vendor is doing his job correctly. You don't necessarily need to know all the details but you have to feel comfortable that the project is progressing as expected.

At the beginning of the project you need to look for the up-front deliverables that you expect all projects to have. For example, the vendor project manager should have a Project Charter or Statement of Work document that describes what his team is doing. You need to make sure that the project is defined correctly and to your satisfaction, and that the vendor project manager has an adequate schedule. You should also approve his or her project manager procedures.

As the project is progressing, you must continue to ask questions to determine the current state of the work. You should have status meetings weekly and you should have a formal quality assurance check at the end of every agreed-upon milestone. You and your sponsor should formally approve the important deliverables. If there is a partial payment being made at a milestone, you need to ensure that the criteria for payment are all defined and that they are, in fact, completed.

Many people think that by outsourcing work, they're ridding themselves of the responsibility. That's only partially correct. Your organization must also monitor the work to ensure that the work's progressing as expected. Remember that vendor problems eventually become client problems.

6 comments
afranquesa
afranquesa

I'm currently working in an outsourced service and most of the times, we are being stopped by never-coming decisions from our customer, so we should include in this post, other customer responsibilities which can assure the supplier progress.

debasisr
debasisr

The view above is aboslutely correct. But per the recent trend I would like to take this one step ahead thinking the so called Vendor as partner or internal team. If the client POC starts thinking that way everything will fall in place automatically. Colloaboration along with strong communication are the key in current oursourcing world. Understanding the outsourcing partners challenges and empowering the partner to take decision aligned with business goal will be the pillar of success.

addicted2speed
addicted2speed

In order to successfully outsource work, you must become someone who can manage other managers. Sadly, not everyone who decides they want to outsource work can do this. People who have excellent "1st-tier" management skills such as managing direct reports or leading small teams, may not have the necessary skills to step one more tier away from the people who are actually doing the work. It is still of paramount importance that the management chain communicates well, and have strong management skills from top-to-bottom. The only difference is that the management chain now leads out of your office and into another company's office, sometimes oceans-away.

nitin.sharma
nitin.sharma

It is very true that Company's PM is the link between the vendor and the company and should work hand-in-gloves with the Vendor's PM.The process of execution,monitoring and control should be meticulous and closure should be after the customers sign off.In this way the company may run down most of the risks. Many projects do suffer when they are outsourced and not monitered properly.

generapharm
generapharm

My experience is that outsourcing is one of the most difficult issues for PM. Firstly, as the article says, outsourcing does not relieve you of responsibility-but many companies I work with simply do not realize this. Outsourcing is often done when internal resources are inadequate. The assumption is made that having outsourced, this has solved the resource problem. The opposite is true when it comes to PM but this is often not included in the resource evaluation. Secondly, managing an outsourced project is especially complicated because, particularly if the end result of the outsourcing requires tech transfer, it means monitoring the work where there may be two different project management systems and, in particular, if the project charter is not precise at the beginning, the transfer at the end will be high risk. Malcolm Ross Generapharm-Training and Consultancy Generapharm@Gmail.com

guillenkma
guillenkma

There are several significant benefits that result from outsourcing; 1) Your production staff can remain fully operational during project execution and 2) The outsourcing team can typically complete the project quicker with better results, having likely encountered many critical paths issues on previous projects, than the company team. The key to gaining results that are to everyone's benefit is communications. First, the vendor MUST do extensive business case analysis to FULLY understand the project requirements. Second, an SOW that reflects this BCA and is clear and concise is critical. Be careful remove any subjective task descriptions. Finally, develop and maintain a communications management plan (CMP) that establishes roles, responsiblities, mitigating actions and points of contact within all areas of the project team (internal and external). Use this CMP as a tool to keep the door open should any critical path issues arise.

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