by Taryn van Olden

OUTSOURCING

In through the door

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The benefits of outsourcing are well documented: reasons of economy, efficiency and scope often lead an organisation to identify those functions that can strategically be better handled by a third party. The information technology project management space is no different. The cost of challenged projects and the rate at which they occur in the IT environment have brought with them the realisation that project management requires a specific skill set combined with technical insight and is not simply a means to an end.

Studies such as the Standish Group’s Chaos Report, and locally the Prosperus Report, highlight the frequency with which IT project failure occurs and the link between project success (or lack thereof) and project management maturity. Overcoming failure and realising benefits should therefore be a major consideration in the implementation of IT project strategy.

Ilsa Keulder of Integrity Solutions has vast experience in the IT project management space and as an outsource partner to several blue-chip clients on matters from IT strategy formulation to project assurance. She believes organisations should make their policy toward outsourcing a part of their IT strategy.

“There are several common themes that I see which constantly contribute to a challenged IT project environment. The first is a lack of support from executive leadership where two consequences frequently emerge: poor project selection; and failure to make appropriate financial allocation for specialised skills and
project resources.

“A second theme is the choice of project manager – where we find too often that the project manager either lacks PM competency or experience in the project environment in which they are expected to deliver.

“Methodologies, as a theme, are also inhibitors to success, where appropriate standards and best practices are not applied consistently or have not been sufficiently customised to the organisation’s environment from an industry and
subject perspective.

“A lack of project governance is another prevailing theme, in that there is no centralised structure housing a management framework within which project decisions can be made, and the resources facilitating good project execution can be organised.

“Finally, planning – or more accurately – failure to allocate the appropriate amount of time and effort to the planning function is one of those elements that seem obvious in hindsight, but frequently can be traced as the cause for a project becoming derailed.”

So, where does this leave organisations when it comes to outsourcing decisions?

Keulder suggests internal capability be carefully assessed prior to project implementation. Thereafter, a realistic consideration should be made about what aspects of the project or programme should be outsourced to overcome the themes mentioned earlier.

“Where subject matter expertise and/or project management expertise is not available in-house, it makes sense to outsource the project manager role rather than set an internal resource up for failure or have them so thinly spread that their availability becomes a project risk. A good outsource partner will bridge the gap between subject and project knowledge expertise, and their deliverables are tied in to a service level agreement, making it less likely than an internal resource that they will be redeployed or made responsible for more projects than they can handle. This outsourced resource will also bring an appropriate methodology, customise it if necessary, and a good outsource partner will build skills transfer into the deal –
effectively leaving both a methodology and those skilled to apply it at the conclusion of their contract.

“Few organisations have the in-house capability to establish a project/programme management office. This is an ideal aspect to outsource: an outsourced partner that brings an existing and proven framework and is able to adapt it to the organisation’s requirements makes far more sense than reinventing the wheel or engaging in a process of trial and error,” says Keulder.

Once the PMO is established, is functional and reflective of best practices for that environment, it can be handed over to an in-house resource to run. A well-structured and functional PMO will address most of the themes mentioned earlier. It will be responsible for project governance and relating project selection back to business need and benefits realisation. It will reinforce the link between planning and effective execution, and it will be the custodian of the PM methodology and organisation’s project ‘history’ and body of knowledge.

An additional area that was once considered optional and is increasingly falling under the spotlight is that of project assurance. Ideally, project assurance is an effort by an independent auditor to determine the health of a project or programme at specific milestones using a framework that covers some or all of the following aspects, identified by the Project Assurance interest group of the Association of Project Management: client and scope; risk and opportunities; planning and scheduling; organisational capability; supply chain; solution; finance; social responsibility; performance;
and governance.

“Project assurance should always be outsourced. It is impossible to expect someone with any kind of vested interest in the project to be sufficiently impartial to fulfil the requirements of project
assurance,” says Keulder.
Not all outsourcing relationships deliver on expectations, however. She cautions organisations to select their outsourced partners carefully, seeking ones that
correspond with the following:

• ¾ Has a proven track record in the specific industry;

• ¾ Has specialised expertise in the area required to be assured;

• ¾ Commitment to knowledge transfer and leaving behind sustainable practices;


• ¾ Offers value for money (never assume the most expensive is the best);

• ¾ A good fit with specific requirements;


• ¾ The willingness to discuss non-negotiables vs nice-to-haves;

• ¾ Use an appropriate methodology specific or customisable to the specific environment; and


• ¾ Apply the methodology to their own environment (which proves its workability and effectiveness).

Taryn van Olden

 

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