Outsourcing Project Management

When should you consider outsourcing your IT project management (PM) needs? There are lots of factors which are unique to every organization and it depends on how the organization prioritizes them.

Are we spending too much on project management? Should this role (PM) be outsourced? On a given project, do we want an internal “rock star” or the proverbial “hired gun”?

Outsourcing considerations:

There are many variables involved in deciding outsourcing PM.

Firstly, we need a good sense of the project’s risk. Riskier the project, the more challenging the PM role is and more care must be taken in selection of PM. For example, is the project mission critical? Is the project technically complex? What will likely happen if this project is risky, we will assign the most capable project manager we can find, whether internally or externally.

Next, we must honestly assess the PM strengths and weaknesses of the organization. If the organization has few or no skilled IT project managers and little formal practices, it will likely increase pressure for outsourcing. If the gap between PM needs and available abilities is great enough, as in organizations with little or no talent, we may consider outsourcing all of PM needs.

Besides availability of qualified PM resources and processes, a few more considerations may enter the calculus for outsourcing PM or not. For example, a project may be extraordinarily political, making it nearly impossible to find an unbiased internal PM candidate.

Next, there is the matter of cost when considering internal versus external PM talent. On the surface, contract project managers may appear more expensive than insiders, but such quick looks can be deceiving.

The criteria considered to evaluate the options are (in order of importance):
1. Ability to manage project risk
2. Ability to meet PM requirements on the project
3. Ability to remain apolitical
4. Ability to be objective
5. Ability of PM to be on-site and face-to-face with team
6. Cost-effectiveness
7. Ability to ensure PM knowledge transfer
8. Ability to work autonomously

When considering outsourcing project management, it is possible to
make careful, studied recommendations that will withstand scrutiny by
those affected. This brief discussion offers a quick example of just such
a scenario.

Reference: Projet Management Institute - Information Systems Specific Interest Group.