In recent years most companies have realised that project management plays a key role in improving the company’s business processes and implementing their projects successfully.
More than 94% of companies from all sectors that use project management believe that project management plays an important role in the performance of their organisation. These companies have seen that project management helped improve significantly their financial controlling, customer satisfaction and project process indicators.
At the same time large companies are increasingly forced to implement their large projects of critical importance with limited human and financial resources, in record time, owing to market pressure. As a result, close to 24% of large projects fail while 44% exceed the planned deadline and the allocated costs. Despite economic challenges, cost limits and continuously decreasing resources, company managers have to realise that they cannot save money on project management because of the risks involved in the given project. Instead of doing away with project management, companies – in a search for new solutions – opt for project management outsourcing.
By outsourcing their project management activities, companies can complete their projects more cost efficiently, by the deadline and with more success, while they also elevate project management culture and increase organisational knowledge at the same time.
It is generally true that a company that specialises in a given task can perform that task in a much lower cost structure. It can do so because it offers the given service at a larger volume and is capable of realising higher cost-efficiency this way, while specialisation also may result in considerable cost reduction.
A service partner with sufficient experience and expertise is capable of transferring to the other organisational units of the company the structural and process capabilities that ensure the efficient implementation of the project.
Project management outsourcing offers the following advantages to companies:
1. Reduced costs
Reducing operating costs is one of the most important corporate objectives that a company using external resources wants to achieve. In project management outsourcing, companies no longer have to invest constantly into project management training and infrastructure. The company no longer has to do and pay the cost of finding, hiring and integrating into the organisation experienced project managers for special project needs. It is worth noting that in this arrangement the company is not responsible for ensuring the utilisation of employees when the number of projects is low.
2. Quicker market access
Projects that are completed by the deadline play a key role in launching products and services as soon as possible. Delays in marketing a product or service considerably reduces the projected and theoretically attainable profit.
3. Methodology background
In the absence of a project management methodology the various players in the project (project manager, customer, project team members, etc.) interpret the project and the role they play in it differently and they understand activities and results differently. Without methodology, projects are very rarely completed by the deadline within the pre-approved cost and resource limits. On the other hand, in project management outsourcing the company immediately receives from the outsourcing service provider internationally accepted project management methodologies that only need to be customised. Customised methodology results in a regulated project process and can also help measure the performance of the service.
4. Increased customer satisfaction
Effective project management increases the quality of products and services and consequently the satisfaction of external and internal customers. The increase in customer satisfaction justifies within the company the use of project management and the outsourcing model, and in the case of external customers, it may increase sales and profits.