Signs a Project Manager Should Be Worried About Outsourcing

outsource inhouse

outsource inhouseIf your company is experiencing these developments, you may need to protect your job.

In a recent CIO Magazine article, Moira Alexander of Conture Business Advisors points out that an in-house PMO isn’t a foregone conclusion. Depending on your industry, type or size of business, and the specifics of your organization, your CIO might consider outsourcing the project management function to be a sensible move. What are some of the signs that your company might go in this direction, and what can you do to save your role?

Low Staffing Levels

Alexander says that many businesses do not have adequate staffing levels for one or more employees to solely focus on managing projects. You, your team, and other existing resources may already be overextended and only able to focus efforts on the daily operational duties that keep the business afloat. If you’ve been running around like crazy doing the work of three people for as long as you can remember, this scenario might apply.

Shortage of Experienced Staff

We all know that project management is not an easy skill set to hire. You might have it, but do others in your company? Alexander comments that outsourcing may make sense if internal team members do not have the PM experience and/or training to effectively take a project from inception to closeout. Lack of specialized expertise in a particular area may be a factor as well.

Cash Flow Issues

In all industries and types of organizations, budgets are shrinking. It may be more costly to find, hire, and train project management staff than to find a vendor who can offer similar services on a per-project basis.

Business Model Decisions

Today’s business world is constantly in flux, and if your company experiences a re-organization or a shift in its business model, senior leadership may not be sure where an internal PMO will fit. Alexander says, for instance, that if the majority of your projects are of the one-off or ad-hoc variety, it may be more cost-effective and less of an administrative burden to outsource.

The Case Against Outsourcing

Now that you know what you’re up against, how should you build your case to keep the project management function in house? You can start with what Alexander outlines as the risks of outsourcing. External vendors, for example, often run into political snafus with internal staff. Projects become more challenging to execute and everyone is less productive as both parties struggle with trust and buy-in.

There’s also something to be said for institutional knowledge. Internal PMs have insider information and background that a vendor simply can’t match. The former understand business objectives and operations, and are close enough to the action to comprehend the nuances. Exposing vendors to confidential company information can result in a data breech even when non-disclosures are signed, and reliability may become a problem because a vendor is not as personally impacted by the business outcomes of the project as an internal team member.

You versus the Faceless Vendor

In addition to these arguments, you should strive to communicate the value you bring as an individual PM. Make sure the powers that be know why the company is better off because you work there, and how your projects have exceeded expectations and helped the business be more profitable. You should be able to rattle off, at a moment’s notice, concrete success metrics and the reasons an external party couldn’t possibly replace you. And, if you have people who work for you, it’s your responsibility to ensure that they are adding value – and showcasing that value – in the areas and to the people who matter.

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