Choosing to outsource some or all of your project management office (PMO) functions is a big decision for your business area. When making to call to outsource or not, you need to take into account these five benefits of outsourcing your PMO functions.
Handing over some activities that are typically associated with a PMO can seem daunting – it might feel like a function that doesn’t lend itself well to being outsourced. However, each type of PMO can be outsourced, either in whole or in part.
When your business or existing PMO is assessing the benefits of outsourcing PMO operations, you need to be considering:
- The impact on efficiency
- How projects will function
- Structuring the contract in a favourable way
- The risk profile of the decision
- What project delivery will look like
All of which we’re going to discuss here to help facilitate your business decision to outsource.
1. Increased operational efficiency
It’s taken as given that outsourcing non-core business functions can increase how efficiently your business completes tasks. That concept should generally ring true when you outsource your PMO, too.
Your business no longer has to oversee people who are putting together deliverables. There’s no need to manage a process end to end and no technology that needs to be bought and managed.
On top of that, your PMO contractor will purely focus on PMO tasks – you won’t be able to ask them to take over project functions or jump into another area of your projects at will. Their skills and experience will be laser-focussed on delivering the functions you’ve contracted them for.
2. Projects will be focussed on delivery
With an external PMO providing unbiased data and reporting, it will allow projects to focus on their tasks. There will still be documentation to complete and records to handle, but you’ll be talking about some superfluous activities from them, such as budget reporting.
Tasks will be more clearly delineated when the PMO functions are external – job roles can’t begin to overlap as you could find with an internal project office.
Further, the experts in the outside PMO will bring in strong processes and clear documentation as part of the framework they support. It will allow projects to follow a clear and proven path to delivery with better processes and practices.
3. Contractual SLAs protect your business
As part of your business agreement with your contracted PMO, you’ll agree a range of service level agreements (SLAs). The type of work that you contract out will depend on what these are. Businesses are most likely to outsource admin or tooling, which can be relatively easy to agree SLAs.
A big benefit of outsourcing your PMO is the ability to hold it accountable through these SLAs. You can choose to build in financial rewards for exceptional performance and/or penalties if delivery deadlines aren’t met.
You can be assured the reports and data your business needs will be delivered on time, and you will get consistent performance, regardless of human resource challenges or other issues at the contractor’s end.
4. Reduce your operational risk
There are some risks that can be mitigated when you contract out your PMO or some of its functions. Finding the talent to staff your PMO is a challenge – it can take a long time to find the right skills and training. Outsourcing removes the risk of not finding the right people for your office.
Scope creep can also be reduced or cut altogether. Having an external PMO with clearly defined tasks and objectives means they can’t be asked to take on any other tasks without a new contract being drawn up.
Cost risk can also be pared back. Your contract will have a set fee for fixed deliverables so you can be sure of your overall costs for each reporting period.
5. A faster office set up
There are times that you’ll need to create or scale your PMO at a pace your current arrangements can’t keep up with. Starting to contract out your PMO functions can get your projects scaling and get a change delivery program running quickly while you work to build your own internal capabilities.
What are the benefits of outsourcing your PMO?
Along with the general benefits of outsourcing business functions, these five benefits of outsourcing your PMO can help you come to a decision that’s best for your business and your project teams.