Recently, I have been reading about and thinking about the pros and cons of organizations considering PMaaS (Project Management as a Service) which has been covered extensively in the news recently.
Considering we support and play this role for many of our clients, it made me think about the benefits and advantages to outsourcing your PMO.
Pros of Outsourcing Your PMO:
Skills and Competencies
For most companies, project management is not a key focus in terms of core competencies. We talk to, interview, and hire hundreds of project managers a year while most companies do not.
We eat, drink and sleep project management.
Okay maybe not sleep, but you get my drift. An organization dedicated to project management is always up on the latest and greatest tools, processes and secret sauce to effectively run projects. Ask your team how much time they spend on this today.
What value would you place on increasing your project “success” rate by 10%? 20%? What would be the value of helping your organization to improve its project management maturity level by interacting with leaders in this area?
I think this is in line with why most companies hire consultants to begin with. With an outsource partner, you can drive sweeping change more aggressively and much more quickly. Consultants also tend to be more transparent and are not caught up in company politics or their next promotion, which is key to effectively managing major projects.
You pay for what you need – the resource model can easily flex with an outsource model. Today, I see companies fracture project leadership by using ten different vendors with ten different objectives, instead of one objective – accomplishing their projects.
This process leads to a lack of clarity and focus! Most importantly, there really is a shortage of outstanding Project Managers. Can you risk a major project going south over the PM?
Cons of Outsourcing Your PMO:
Deep Corporate content knowledge
Some organizations feel that their PMs need deep corporate knowledge in order to succeed. I would say it is more important for Business Analysts to have that deep content knowledge than Project Managers. We have consistently seen that good PMs can navigate across various industries fairly easy.
You get what you pay for. Many companies devalue this role and do not pay industry level salaries. With outsourcing in these situations, it is not realistic to expect a material reduction in costs. To have the best, consulting firms have to charge top dollar for top capabilities.
Many companies feel that if the PM is not an employee, they lose control of them. In our experience, it is often the opposite as the consultant Project Manager is very motivated to drive client satisfaction.
PMaaS comes down to two things:
- How important is it that your projects are delivered on scope, on time, and on budget?
- Is project management a core competency to what you do?
If you do not have it or you cannot say it is core, then you should outsource it. In my own company, we outsource many things from IT support, marketing, financials, payroll, etc. Why? Because it is not considered core to what we do. Consulting is what we do. I’d love to hear your thoughts on this topic in the comments below. Do you think the trend will move this way? If not, why?