Pros and Cons of Outsourcing the Project Management Office

Next-Gen PMO

Is outsourcing the project management office (PMO) a viable solution for an organization? The fact is that there are a few key factors to consider when deciding whether or not to outsource the PMO. First, does the organization have the internal resources to manage the project effectively? If not, outsourcing may be the best option. Second, is the organization willing to invest in training for staff members who will be responsible for managing the project? Without proper training, even the most experienced staff member can make mistakes that could jeopardize the success of the project. Finally, does the organization have a clear understanding of what it wants to achieve by outsourcing the PMO? Without a clear goal in mind, organizations can end up overspending on unnecessary services or making other mistakes that could have been avoided. Additionally, they need to consider the group to whom PMO services would be outsourced (Malik, 2015). Would that group be dependable and trustworthy? Would it be able to efficiently and effectively manage a project? Thus, from these considerations it is plain to see that when it comes to outsourcing the PMO, there is no one-size-fits-all solution. Organizations need to carefully consider all of these factors before making a decision on outsourcing the PMO.

There are actually a number of advantages to outsourcing project management. For instance, one advantage is that it can help to free up internal resources, which in turn allows businesses to focus on their core competencies. Another advantage is that it can provide access to expert knowledge and experience, i.e., skills and expertise that may be lacking within the organization. In addition, outsourcing can help to improve efficiency and quality while reducing costs. It can give organizations the flexibility to scale up or down as needed. And it can help to improve project value and timeliness by aligning strategy with investment and execution (Karkukkly, 2010). When done correctly and with due diligence, and with deliverables clearly defined, outsourcing project management can be an important tool for organizations of all sizes (Larson & Gray, 2017).

However, just because outsourcing is an option does not mean it is always the best option. The group should complement the firm in the first place (Malik, 2015). If it does not complement the firm, the work is not likely to be complementary either. There can be all manner of disadvantages, ranging from coordination breakdowns, to loss of control, to conflict, security issues, and even problems caused by politics (Larson & Gray, 2017). Domestic workers do not like to see their jobs offshored to other parts of the world. If a political candidate senses that he can turn their anger into votes, it can mean trouble for the offshoring company. Thus, a business has to be sensitive to how workers are going to feel about the outsourcing of PMO.

On the other hand, if the company believes it can manage these disadvantages, the advantages should not be ignored. They include cost reduction, faster project completion, expertise, and flexibility (Larson & Gray, 2017). But do these advantages really outweigh the disadvantages? Again, it all depends on the company. The reality is, though, that a firm has to be careful and selective when outsourcing PMO. Mistakes are waiting to happen in just about any situation—so the first thing the firm has to do is figure out if it will lose control of the project by outsourcing it. If the new partner is unable to deliver, the project could falter as the team has no authority over the outsourced group. That can be a major problem.

Then there is the matter of coordination breaking down. When teams are working remotely there is the issue of physical separation, and it is compounded by the fact that communication may be delayed or lacking, and oversight missing. For example, team members may have different schedules and time zones, making it difficult to coordinate meeting times. Or team members may not have access to the same resources, which can make it difficult to work on projects together. Plus, working remotely can also make it difficult to build trust and rapport with teammates. When team members are not able to interact face-to-face on a regular basis, it can be difficult to build relationships of trust and mutual respect. Thus, outsourcing PMO means that one half of the team at least is working remotely, which can end up posing big challenges for the group as a whole in terms of coordination and communication.

Thus, when deciding whether or not to outsource project management, there are a number of factors to consider. On the one hand, outsourcing can be a cost-effective way to get access to skilled labor. In addition, it can free up internal resources that can be better used elsewhere. It can speed up projects and ensure that expertise is obtained for the management of the project. It can give organizations a great deal of flexibility too in terms of how they allocate their own internal resources. Still, there are also some potential downsides to outsourcing PMO services. For example, it can be difficult to maintain quality control when working with an external contractor. In addition, there is always the risk that the contractor will not live up to expectations. There can be conflicts, coordination breakdowns, loss of control, and even negative political ramifications that could come back and bite the organization. Therefore, as with any decision, the pros and cons of outsourcing should be carefully weighed by the organization before proceeding.