Here’s a couple of questions we get asked often. Does a business need a dedicated delivery team to run programmes and projects? Is it better to keep things in house or outsource project management as and when needed?
After speaking with many clients over the years, we’ve found that one size does not fit all. To get a view on the potential concerns and benefits of outsourcing project management we asked Leonard Vitarana, Partner – Project Management, to answer some of the most frequently asked questions about outsourcing project management to an external individual or team.
Why do clients outsource project management?
Typically, clients have discovered that they’re missing vital skills in their organisation. We often find that Project Management isn’t one of their core capabilities. As a result, they feel they are constantly chasing their tails and potentially repeating the same mistakes time and time again.
This is often heightened when a business faces a significant change or needs to expedite a new product or service to market as fast as possible. In particular, Digital Transformation programmes are notorious for being complex, Forbes claims up to 84% fail, and need careful management or they can derail quickly.
What are some of the typical concerns of outsourcing project management?
It’s usually concerns about lack of operational control, confidentiality and data security. Sometimes it’s about the quality of the final outcome of the project but these are easily mitigated if you select experienced project and programme managers with a proven track record.
Finding the right external resource ‘fit’ can also be a factor. Excellent communication skills are crucial in project and programme management, so it’s important to get the right mix of people (external and internal) working collaboratively together.
Of course, cost can be a barrier but you’re either paying someone internal or external to deliver the project. If you’re getting nowhere fast with just internal resource, then what is that costing you in terms of competitiveness and revenue?
What are the benefits of outsourcing project management?
Reduced cost: For some decision makers having resource focused specifically on delivery can be seen as a cost – an overhead, not an asset. It can be difficult for them to put the benefits against good execution, but companies can often see a reduction in overall operational cost associated with people, licenses, and office space when outsourcing.
Speed: Outsourcing project management is ideal for quickly plugging capability gaps in your team. Often it takes time to recruit the right people or upskill existing resource, and learning new and more effective creation processes can be slow. These problems are largely mitigated with outsourcing.
Flexibility: It can also mean more flexibility which is ideal if you have peaks and troughs in demand for delivery that don’t support employing permanent or full-time team resource. Having flexible team members can meet those pockets of demand quickly without having to do lengthy onboarding.
Improved quality: Using highly experienced and skilled external resource will help you deliver to a better level of quality of service or product that ultimately leads to improved and consistent customer satisfaction.
Best practice: With experienced people comes knowledge of the different methodologies and disciplines available and recommendations for emerging best practices, saving both time and money.
What is ‘Delivery as a Service’ offered by DWG?
Our Delivery-as-a-Service solution allows you to tap into highly experienced programme and project expertise when you need it – essentially, it’s capability and experience on demand.
A common misconception is that it means a full outsourcing of capability. However, every client request is different, and the right skills and level of resource are provided for their specific needs.
We cover technology, business and digital change. It can take many flavours, but here are some of the things we can do:
- Initiate and deliver new/greenfield projects
- Turnaround failing projects
- Scale delivery capabilities – when a client needs to get things up and running with cost and time at a premium
- Provide a ‘creation process’ that looks at the initial steps of aligning strategy to prioritisation, portfolio management and operating capabilities
Clients can either hire in our expertise to augment their teams or may ask us to run their programme or projects for them, end-to-end.
Naturally, the ‘service’ needs to fit with the operating model of the company, be that fully co-located workers, remote working or a mix. Agreements are made on the centralisation of decision making and working practices. We want the client to be as comfortable as possible and we work hard to build the trust that delivers the results they want.
Is it risky to outsource project management?
Sometimes organisations feel it’s best to keep things internal – keep the knowledge inhouse only. However, we often find our team can add value by offering a different perspective and voice, using experience from other projects to provide valuable insights. Obviously, discretion is built in, and Non-Disclosure Agreements (NDAs) can be used where appropriate. Our consultants have worked across many industries and sectors such as Financial Services & Fintech, Retail & eCommerce, Telecoms, Charity & Not-for-profit, and Government.
Why consider outsourcing now?
When considering outsourcing there are two things that stand out since the pandemic and lockdown restrictions; the improvements of tools available, and the acceptance of new working practices.
Historically co-located teams and face-to-face meetings were seen as the only way to ‘make things happen’ but we know from the pandemic that it’s not true and our world has evolved in a way that compliments the model:
- 30% of the UK workforce was working from home in 2021, compared to 5-10% of people who worked fully or partially in the early 2000’s
- According to the Office for National Statistics (ONS) the levels of working remotely peaked with almost half of working adults (49%) reporting having worked from home at some point. In the most recent period (25 January to 5 February 2023) around 40% of working adults reported having worked from home at some point in the past seven days
Improvements in SaaS and cloud computing also mean that the right tools can be selected and ready for use very quickly, with centralised reporting and numerous ways to collaborate quickly and effectively.
Video conferencing is now the standard meeting format and generally part of everyday life. The culture is here to stay.
Can you share a client outsourcing example?
We’re working with a high growth SaaS company at the moment. They work across retail and the public sector, providing data driven operational insights. The software is configured to meet specific client needs and drives significant cost efficiencies for the end customer.
With this client, projects are similar, but run without consistency by multi-skilled customer success representatives. The processes for delivery are often bespoke, and it feels like “we’re learning every time we implement”. But the existing model isn’t sustainable, especially as this company scales. Deals can be signed quickly or may take months to land, leading to larger customers that need to be onboarded concurrently.
Imagine having to build out a Project and Programme management function at pace whilst right sizing for unpredictable demand? It’s a potential recipe for inefficiency and poor customer experience.
How we help:
We were engaged to support them and outsource their PMO, building a repeatable delivery implementation approach and executing against it. We are able to flex demand up and down as needed, reducing costs, time to market, improving quality and efficiency, and importantly allow the ‘customer’ teams to focus on client relationships as opposed to managing project processes.