Page 296 - Global Project Management Handbook

PROJECT MANAGEMENT FOR OUTSOURCING DECISIONS 14-21

Basic project management principles apply to outsourcing decisions as well. The
project life-cycle phases of an outsourcing decision are analogous to a classic project
management structure. Scope and time objectives establish the basic structure of an out-
sourcing decision. The drivers and results are examined according to their priorities in the
conceptual, design, implementation, finalization, and control phases. There are several
aspects that influence the decisions and consequently the outcomes of the outsourcing
project. Cost is considered to be the major aspect, but it is only one of the factors. Risk is
also an important element that determines the fate of the project, and is an inevitable
challenge that has to be mitigated throughout the course of this project. (Fig. 14.6).
The success of an outsourcing project depends on a number of critical factors. The
support of executive team and user community has the foremost criticality. Morale and
productivity are hard to measure but play an important role. Without support from higher
levels, the organization cannot achieve the targeted productivity. Long-range planning
cannot be effective if there is weak or no support from the chief executive that is not
visible to each level of the organization. Style of management determines the actions of
the executive in assuring the organization of the importance of the project. The executive
must perceive the primary responsibility with an involvement starting from setting objec-
tives and continuing with approval of strategies that lead to those objectives.
The skills of the project manager and the executives play an important part in the suc-
cess of an outsourcing project. The project manager and the executive should have a basic
knowledge of change management and risk management, as well as contract management,

FIGURE 14.6 Aspects of outsourcing decisions. 31