Should You Outsource?

Usually we want to do things on our own. It is the easiest thing to do, produces the least paperwork, requires the least amount of planning, and the least amount of legal interference (which most of us wish to avoid like the plague). It’s what we’re used to, it’s where our product and project expertise lies, and it’s usually the path of least resistance.

Next in line is the concept of bringing in outside consultants to work on the project as needed. For example, you may need a particular software expertise on your project and everyone in your organization with that expertise is booked on another engagement. Since you need the work performed now – not in two months – you bring in an outside expert for, say, five weeks to get the task completed and you move on.

The third choice you have is outsourcing the needed work. Outsourcing is always an option. And it is often a good option. And sometimes the ONLY option if you want to meet a certain deadline or odd customer requirement that implies a certain expertise that your organization and resource pool lacks. There may be times in the life of your projects or during your project management career, where the best alternative is to outsource an entire portion of the project to an outside vendor to perform, say, all of the development work or all of the testing of the system prior to user acceptance testing. It may be faster and cheaper than hiring individuals and getting them up to speed.

Let’s look at this option further….

Going the outsourced route

An alternative to using consultants is outsourcing, by which an independent vendor provides a service and assumes responsibility for the results. For example, a project manager might outsource the development and delivery of a deliverable or component of the product being built.

Outsourcing has its advantages. It can help shift the development of difficult, complex deliverables to expertise that does not exist on the team. It can shift nonessential deliverables to outside vendors so that the team can focus on critical matters. Finally, it can allow for flexibility in responding to a fast-paced environment, since less is invested in a project infrastructure and the outsourcing can be canceled without investing too much.

Outsourcing has its disadvantages, too. The potential for losing control may be high. The work can cost more initially. And it takes time to find a reliable outsourcing vendor.

To ensure that you make a good outsourcing decision:

• Do an analysis to determine if outsourcing is a better option than having the team do the work.
• Select from several outsourcing vendors. Compare each one, not just on a cost basis but also on reputability of work and service.
• Identify what is too critical to outsource. A bad outsourcing decision can have disastrous results on the entire project.
• Identify what you can outsource. Often, these are services or deliverables not essential to the outcome of the project.
• If outsourcing something critical, then ensure that reviews and audits are stipulated in the contract. Actually, the rights for reviews and audits should be incorporated in the contract as a general rule, but especially for critical services or deliverables.

Summary

Whether outsourcing is the way to go or not may not be really an objective finding. And, remember, organizational policies and processes may – and often do – play a significant role in whether you should or even can outsource much of the project work…even if it is truly the best decision for the project, the organization and the customer. It takes some digging, some cost-benefit analysis, and some research as to your organization’s skills database and resource availability. Then, and only after all of that, can you make wise choices for your project and customer concerning outsource the necessary portions of your project.