Is outsourcing Project Management the right thing to do? I’m not talking about off-shoring customer or tech support, or manufacturing; I’m just talking about an On-Demand Project Management professional hired on an as-needed basis.
Having been laid off from an event project management position last year and replaced with a consultant, you might think I’d be against outsourcing. But the fact is, it makes a lot of sense to me, especially in the cases where a company takes on a new project but cannot afford to take on a new project manager.
Businesses need to cut costs and increase profits. Businesses also need to get business done.
In order to accomplish both, companies ask their employees to wear many hats and perform well in all of them, spreading those employees too thin at times. But employee overhead is a huge cost of doing business, so companies delay or freeze hiring, especially in a flattened economy. The result? Oftentimes things slip, or everything is done but nothing is quite up to par.
When a new bit of project based work demands a leader with experience and the time to focus on it – outsourcing is the smartest solution. if you select the right person for the job, you have an expert, experienced PM dedicated to that project, contractually obligated to meet your budget, timeline, and quality specs (with penalties for unmet obligations), and to whom you don’t have to pay benefits, taxes, or bonuses. Because they want to be on your RFP list going forward, they (should) bend over backwards to please you. Personality issues shouldn’t be an issue for the same reason – they are not only trying to add a win to their own portfolio, they want you to like them, pay them, and bring them back for the next project, and the next.
Additionally, a good PM consultant can look at your project with fresh, unbiased eyes, and bring a new perspective to the table. They tend to follow best-practices rather than be swayed by historical company methods, and can help produce a top-quality deliverable. The fact is, there are a lot of really good people out of work right now who are consulting, and doing an excellent job of it.
Of course, it’s the responsibility of the stakeholders to monitor the work of the consultant to insure the work is being done properly and in-house resources are being used optimally. A good online PPM software tool used by both internal and outsourced team members will help insure top-down and bottom-up visibility into the status of the project at all times. Are there risks? Sure there are; but there’s risk in any venture, isn’t there? I hired a painter awhile ago – he came highly recommended and has been in the business forever. Sadly, he just hired a bunch of unskilled guys to do the actual work and I ended up redoing it all myself. But I think that’s the exception rather than the rule. And I’m not saying "Fire all the PMs and bring in a parade of consultants;" I’m just saying there are times when added work doesn’t have to mean adding to the payroll – just outsource it.
What have your experiences been with outsourcing project management? Are you for or against the practice?
For all of the excellent reasons you cite, and more, hiring contract PMs is no longer either an oddity or even really a choice. It’s actually the only way to get more oomph out of the delivery engine. I’ve covered this in my blog, albeit with a slightly different emphasis, in the post “Offshore development: aim for it, even if you never go there”, at http://www.peterkretzman.com/2008/02/19/offshore-development-aim-for-it-even-if-you-never-go-there/
Thank you for the comment and the link, Peter – I enjoyed reading your blog and agree with what you’ve said. I look forward to reading more of your writing.
Hiya Cindi! From my perspective it depends on who to oursource to…do you outsource to a freelance PM who will essentially come to you and work for your company on his own, or do you hire a Big Five consulting firm with specific expertise and resources in project management? I’ve been on both sides of the Big Five equation now, both as a customer of PM services (working for a bank) and a vendor of them (working for a big consulting firm). As a customer I was never very satisfied with the results I got, and I frequently had to step in and course-correct. It wasn’t something I could take my hands off of…and if I can’t take my hands off it, why outsource in the first place? I can do that with my staff. As a vendor I found out the reasons for the behaviour I saw as a customer…the vendor PM finds himself caught between customer wants and sales targets, with management and sales pushing for more money in ways I found astonishing. So…I’m very anti-Big Five. Hiring a freelance PM is a different matter, and I can see specific benefits of doing so, as you cited above. From my perspective, though, I would prefer to build PM skills in-house, as those are assets that make my organization more powerful rather than diluting my workforce. Cheers, Cindi!