Outsourcing PMO Decision

Are You Outsourcing Your PMO? When is it the Right Decision?

Outsourcing your project management office (PMO) in full or some of its functions is becoming more common, but why? Here, we’re going to look at when it’s the right decision to outsource your PMO.

Some businesses are used to outsourcing functions like payroll processing or marketing, but the idea of outsourcing a PMO can be harder to understand. PMOs provide governance and oversight to the projects in a business, so outsourcing the function may not feel natural.

However, particularly if your projects aren’t a core function of your business or it’s only a temporary need, you may see benefits from outsourcing your PMO. We’re going to look at the use cases for outsourcing your PMO, including:

  • Getting your business developing quickly
  • Scaling your business fast
  • Tight costs and margins
  • Improving your existing PMO

Outsource your PMO when your business needs to move fast

There are times when a business needs to affect change quickly. This could be because of a negative financial situation, an unexpected change in regulation, or a market innovation, for example.

In these types of situations, you need to be able to move fast to implement a change programme. Finding the right resources, such as:

  • People
  • Technology
  • Office space

Takes time that could be better spent delivering projects.

In this case, it makes sense to bring in a ready-made PMO that has the people, and the capabilities ready to go so your business can focus on the change it needs to create.

Scaling your business may require outsourcing your PMO

In a similar vein, when your business is growing rapidly, an outsourced PMO can help plug the skills and knowledge gap you have.

A new client, offering a new service, or a struggling competitor means your business grows quickly can mean that you need to ramp up your project capabilities. If you already have a PMO in place, it’s possible and logical to outsource some functions.

Tasks like project admin, data entry, and generating standard reports can all be handed over to a contracted PMO. This allows your PMO team to pay more attention to strategy and offering support to projects.

When margins are tight, outsourcing your PMO can help

Setting up a PMO can represent high sunk costs that you may not be able to afford at the moment. You need to spend money on things like:

  • Recruiting
  • Onboarding
  • Training
  • Finding office space
  • Investing in hardware

Without cash on hand but a need to start taking control of project governance and compliance, it can make sense to outsource your PMO initially.

You can use a contracted PMO as a stopgap to buy you time to get your own internal PMO created and staffed. It’s even possible to hybrid your office between internal and outsourced, as we’ve just looked at, so that some of the simpler functions are taken care of while you get your project and change agenda under control.

To support your growing PMO, you can outsource some functions

Particularly if you’re struggling to find the right talent to staff your PMO, you can outsource some functions whilst you bring your team up to speed.

An unexpected resignation or a change in project capacity can mean your PMO has more work than the staff on hand. Outsourcing some office functions can give you the time to recruit or train people to bring the work back in-house.

Being able to see an efficient and professional PMO at work can have a positive effect in growing your existing office functions. You can also consider adding training into your outsourced PMO contract so that your existing team get clear benefit from the temporary arrangement.

When should you outsource your PMO?

Outsourcing your PMO can be a solid and necessary business decision. You may not have time on your side, or it may be that you don’t have the funds to invest in PMO creation at the moment.

It can also come from a positive place – the right time to outsource your PMO can be when your business is growing, and you need to give the repetitive and standard tasks to an outside organisation and focus on improving your team’s strategic and business awareness.