Chapter 11.  Managing an Outsourced Project

Chapter 11. Managing an Outsourced Project Managing projects is hard. Scope creeps, changes go uncontrolled, defects are introduced, schedules are delayed...and that's all in your own organization, where your software engineering team is right down the hall. Imagine how difficult it is to get even these results when your team is in another organization in an entirely different buildingand possibly in a city halfway around the world! When you hire a company outside your organization to build your software, you open up yourself, your project, and your organization to exactly these problems. Unfortunately, that straightforward reasoning seems to be lost on many people. The fact is that outsourcing is risky, and many people find that their projects go awry. Gartner, a respected research and consulting group, recently (at the time of this writing) published a report that predicted that half of IT outsourcing projects in the next 2 years will fail, and that 60 percent of organizations that outsource customer-facing processes will find that hidden costs and customer problems have wiped out any cost savings. This implies that leading an outsourced project requires a different set of skills than most project managers are familiar with. If you are used to working with an in-house team, you personally will need to change your approach to project management if you want to get your outsourced project done right. There are a lot of overly optimistic books, articles, and papers written about outsourcing. Mary Lacity and Rudy Hirscheim propose reasons for this phenomenon in their book Beyond the Information Systems Outsourcing Bandwagon. They point out that much of the outsourcing literature is written during the "honeymoon" period, after the contract is written but before any project milestones are met (or blown). Many only report projected savings, not actual savings. And most of all, they point out that only the successes tend to be documented, because few organizations want to publicize their mistakes. The truth is that the project manager for an outsourced project faces all of the challenges she would face on a project developed within the organization, plus a slew of additional difficulties. However, if she is able to navigate these issues, she can lead a successful project.