Outsourcing in Project Management
Every company strives to gain market advantage and maximize profits. This task requires knowledge, experience, and the ability to react quickly to changing market trends. For several years, IT outsourcing has been one of the trends in software development. It is mainly because employing specialized employees in the local market is becoming increasingly challenging. At the same time, many companies noticed that their projects could be much better if they were managed by a professional project manager and not by someone with no experience in this matter. And it doesn't matter if we are talking about a simple project like creating a website, a more complex one like building a mobile application, or an extremely complicated and time-consuming project related to artificial intelligence. Each project can help the company gain a market advantage, provided it is properly managed. However, only some companies have experienced project managers, so many companies decide to outsource this position.
Therefore, it is not surprising that the popularity of project management outsourcing is steadily growing. But to understand this phenomenon, read our article and find out what benefits project management outsourcing gives your company and how to avoid its risks.
What is Project Management?
The term "project management" has many definitions. However, perhaps the most accurate definition comes from the book "A Guide to the Project Management, The Body of Knowledge, PMBOK GUIDE." According to the authors of this position, "Project management is the application of knowledge, skills, tools, and technologies to project activities to meet or exceed the needs and expectations of principals. These activities invariably require a balancing act between the various elements: purpose, time, cost, and quality."
This simple definition not only shows precisely the idea behind this concept but also draws attention to the fact that a high level of project management requires appropriate skills. Nowadays, more complex projects are being created, and the entire company's existence often depends on how successfully they can be implemented. The project management process is complicated, and proper project management is an element that determines the efficient functioning and development of most modern organizations.
There are different project management methodologies, but they all have one thing in common: a project manager who, thanks to his unique knowledge, experience, and project management tools, will ensure that the project is completed on time and, equally important, will meet or even exceed customer expectations.
What is Project Management Outsourcing?
Project Management Outsourcing is nothing more than an external order to supervise the implementation of a project. External project managers deal with comprehensive project management, and your level of involvement depends only on you. You can work closely with your chosen external project manager and leave everything in his hands.
It is worth being aware that sometimes external project managers deal with a few projects simultaneously. Of course, these are usually simple projects that an experienced project manager can supervise simultaneously. Still, if your project is highly complex and requires a lot of commitment, it will be better if the project manager only deals with one project.
Outsourcing in project management is a simple solution but highly effective and, what is equally essential, definitely cheaper.
Why do Companies Consider Outsourcing Project Management?
The interest in external project management services has been steadily growing for several years. Many companies outsource project management because they see significant benefits from this solution.
In addition, very often, the reason for outsourcing projects or outsourcing project management is the current staffing situation of a given company. Often companies do not have enough employees, or the current staff is too much workload and cannot afford additional tasks.
Another reason is that professional project management requires specialist knowledge and experience. Hiring a project manager with the right qualifications is expensive and often infeasible because project managers are not interested in a short-term project, after which they have to look for a job again. They prefer to cooperate with professional outsourcing companies that provide them with continuous cooperation and diversified projects. A successful outsourcing organization concentrates on employing the right class of project managers. At the same time, the outsourcing projects implemented in this way are at the highest level.
It is also crucial that outsourcing project management is a cost-effective solution because, thanks to the support of an external, professional project manager, many companies can implement successful projects for reasonable rates.
What are the Benefits of Outsourcing Project Management?
The benefits of project management outsourcing are indisputable. For each company, different issues are crucial. For this reason, we have compiled a list of the most obvious universal benefits for any company, regardless of its size or the industry in which it operates.
Access to a Large Talent Pool
Thanks to outsourcing project management, your company can access an unlimited pool of talented project managers. There are no issues related to geographical restrictions or inadequate qualifications.
A trusted outsourcing company will choose a candidate per your preferences and expectations. A high level of project implementation is a priority for the best companies offering such services.
The external project manager provides the objectivity that internal employees sometimes lack. Such a rational, objective view of the project and its various aspects is precious, as it effectively fulfills business requirements and ensures high quality of project execution. The external project manager focuses on completing the task. If there is a problem, he will do everything to solve it, regardless of the private relations of the client's internal staff.
High Level of Experience
Project management requires experience because theoretical knowledge alone is not enough. Skillful project management combines experience, knowledge, and skills, including the ability to plan on a large scale and attention to small details. This approach ensures that each business initiative aligns with the overarching strategy.
Outsourcing allows you to hire an external project manager whose experience will enable you to cope with your project, even if it is very complicated and demanding.
Faster Project Completion Time
When you entrust project management to a professional, you can be sure that he knows from start to finish what needs to be done and the main stages of the process. His goal is the timely implementation of a successful project, and he focuses all his attention on this.
For many companies, the guaranteed completion date of the project is a massive relief because, in the case of internal project management, the deadline for completing the project is often postponed many times because an inexperienced project manager is unable to predict the emergence of various problems and has no experience in dealing with obstacles quickly. All of this left the project behind schedule and frustrated the team.
Outsourcing project management is also a good solution from a financial point of view.
It is because you do not have to hire a project manager permanently. An external expert works with you on a specific project. After its completion, the outsourcing company looks for another project for him, consistent with his experience and knowledge.
In addition, you are not interested in any organizational issues, such as a place to work or the proper hardware and software. All this is also on the side of the external company.
An important issue is also the fact that thanks to this solution, your employees can focus on the main activity of the company and not waste time on something for which they are not competent.
What are the Risks of Outsourcing Project Management?
Outsourcing has many benefits, no matter which outsourcing model you choose. But of course, project management outsourcing is associated with a specific risk like any solution. It is worth being aware of what can go wrong to prevent various dangers because this will allow you to prepare yourself properly and avoid unpleasant situations.
No Knowledge of Business Goals
Sometimes, companies do not sufficiently transfer knowledge about business goals to an external project manager. It is a huge mistake because of the lack of reliable knowledge about the project's business goals, and the company can make the result of the project unsatisfactory. The client cannot assume that the external expert will have the same knowledge about business objectives as its internal employees. Therefore, to avoid disappointment, it is necessary to provide an external expert with all data regarding the project and business activities of the company.
Difficult Cooperation with Internal Staff
Occasionally, when a company decides to outsource project management responsibilities, the external project manager may encounter difficulties with internal staff who do not support their efforts. It may be due to a lack of trust and an often unconscious reluctance to outsource. Such an attitude can significantly hinder a project manager's work, making it difficult to create a successful project. The solution to this situation is relatively simple because it is necessary to make the internal team aware that all team members - including the external ones - have a common goal they must achieve for the company to gain, for example, a competitive advantage.
Disclosure of Confidential Information
By establishing and implementing clear policies, processes, and measures, companies can significantly reduce the risk of data breaches by internal employees and external suppliers. To protect your business from potential security issues or threats that third-party vendors may pose, you must clearly define these protocols and ensure that they are communicated effectively throughout your organization.
There are many providers of project management services on the market, so it can be challenging to decide which one will suit your specific requirements. Whether you need help with large and complex projects or short-term projects, finding a trusted supplier who has access to resources and understands your expectations is crucial to the success of your projects. In our article "Choosing the right software partner," you will find advice on how to find and choose the right outsourcing partner.
When deciding on project management outsourcing, ensure that this solution is perfect for your company. If you would like to discuss this with our specialists, make an appointment for a free consultation at a convenient time. We have been creating successful projects for many years and are happy to advise our clients on the best solutions for them.