An article in Forbes magazine recently described project management as "a compass" that helps the business to "use its agility to move toward its real overall goals". With the strategic role the project management discipline plays, the question often arises: is it better to insource or outsource projects?
After all, project managers - working as part of a wider programme management office - have to be experts in the organisation. They must be able to see the bigger picture and understand the organisation's quirks and culture while keeping focus on the outcome.
They have to manage any factions and potential conflicts within the organisation, and steer all contributors towards the ultimate vision.
There is no way an outside contractor who is not immersed in the organisation could achieve this as successfully as an insider - right?
Not so fast.
Ross Musselman, account executive at IT consultancy Mint Management Technologies, says the decision about whether to outsource or insource project management is complex.
He suggests asking the following seven questions to make the decision easier, and offers some considerations:
1: How antagonistic is the project's human environment?
Successful projects are driven by people who have bought into its core objective. When stakeholders are at war with each other, the likelihood of success diminishes. An internal project manager is more likely to navigate that battle successfully than a contracted project manager.
2: How much executive mandate is being given to the project?
Critical business initiatives that lack executive mandate will fail. If executive support is strong, contractors can cut through much of the internal dynamics, although this could result in a disenfranchised senior management (risky - but it ultimately could transform the business).
3: How painful is the project likely to be?
Projects that force people to change the way they work are always painful. A talented contracted project manager (PM), who is free of the internal politics and can become the whipping boy for staff resentment, is probably a good bet. Unfortunately, without strong internal project champions, this approach could lead to post-project regression.
4: Is there an internal resource available?
Business leaders often mistakenly start with this question. In small businesses, project managers (if there are any) are often already swamped. In enterprise environments, the available project managers are often unable to transform the business. The first step should be to understand what is needed for project success, and then to evaluate whether the internal staff can deliver.
5: How complex is the project's technological environment?
Technological complexity should play an important part in deciding whether to outsource. A lengthy ramp-up period in which external project managers try, for example, to figure out which applications are involved in an initiative, is often untenable, especially in IT projects.
6: Is the project aimed at changing the company's core processes?
In this scenario, it's probably better to get an external PM with in-depth experience and expertise in the new technology/application/processes who is able to navigate the implementation landmines. Additionally, because these are projects where cultural shifts must take place in order to be successful, a new person is more likely to be champion of the company's new culture.
7: What is the timeframe?
If the project must start tomorrow, contractors are likely the best option, even if they often require more ramp-up time. However, in some instances, ramp-up could take contractors so long that it might be better to wait for an internal PM to become available.
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