7 Benefits of Project Management Outsourcing
This post was originally published on www.rtinsights.com
IT outsourcing has become more than just a tool for cost savings. It’s a strategic approach that allows software companies to delegate a wide range of tasks, from development, UI/UX design, and manual and automation testing to cybersecurity services, so that they can innovate, stay competitive, and quickly adapt to the changing market dynamics.
However, as more companies turn to outsourcing, many are faced with the dilemma of whether they should keep project management in-house or outsource it to the same company they used to hire a remote development team.
On the one hand, keeping project management in-house offers direct control. You can talk to someone who knows everything about the project’s progress at any time and make sure that if any issues occur, they can be addressed quickly. It almost feels like having your team under the same roof, even if they’re based miles away. On the other hand, a project manager who works from a distance might find it rather challenging to keep things rolling.
So, which approach to project management is more preferable: hiring an in-house project manager who would be working next to you or delegating project management? These are the questions we’re going to break down further in this article. Kick back, and let’s dive into it.
The Role of a Project Manager: Key Responsibilities and Impact
Before we delve into details, let’s start by understanding who a project manager is and what this role entails in terms of duties and responsibilities. This will give you an idea of their scope of work and help you make an informed decision.
By and large, project management is a rather complicated process that entails many different activities, phases, and tools, and a project manager is the linchpin holding it all together. So, what’s this figure?
Simply put, a project manager is the maestro who conducts the entire project symphony. They are the glue that binds the various elements – tasks, team members, deadlines, and resources – together. They are also intermediaries who act as a communication chain between the development team and the client, keeping both parties informed about the development of the project.
A project manager is an integral part of a development team. They are responsible for developing an idea, planning its execution, allocating resources and things like scheduling tasks, monitoring the project’s progress, and evaluating results. All of these duties lie in the responsibility of a project manager.
Now, let’s look more closely at their day-to-day project functions. Following our own experience, we’ve put together a list of PM’s core responsibilities that illustrate the diversity of this role:
- Communicate closely with the development, design, and testing teams to ensure the tasks are being implemented according to the project plan;
- Proactively track the course of the project to discover any changes, difficulties, or occurring risks as early as possible and mitigate them as needed;
- Ensure that the team adheres to the chosen project management methodology (run daily meetings and retrospectives, etc.);
- Maintain all project-related documents concise, informative, and understandable by involving software engineers in the documentation process;
- Engage with the project owner and stakeholders, acting as a point of communication between the R&D team and top management staff.
- Make sure the project’s budget fully corresponds with the planned workload and, if any changes need to be made, it can be adjusted quickly;
- Act as a delivery lead, providing the completion of projects on time and within agreed-upon budget frames;
- Foster a collaborative team culture by organizing team-building activities, encouraging open communication, and promoting a positive working environment and corporate culture.
As you can see, almost every project manager’s responsibility is closely related to communication, especially with software engineering and testing teams. Now imagine trying to do all this while being miles away from the team! The answer is obvious.
For an outsourced team to work effectively, a project manager should work alongside them and actively monitor the progress of the project. This not only improves productivity but also ensures that everyone is on the same page. Moreover, working together helps build an emotional connection, which is an important element of a positive organizational culture.
Outsourced PM is often built on an outstaffing model, providing business owners with a high level of management control. This can be a good option for clients who are comfortable with deep personal involvement in managing each aspect of development.
Roman Lyha, Head of PMO at QArea
Of course, regular meetings with stakeholders are also a vital part of PM duties. However, being physically present with them isn’t as critical. For one, reporting information is much easier and faster than gathering it. Plus, meetings with stakeholders can be efficiently conducted virtually, using communication channels that are convenient for both the team and the client.
“Managing developers is both an empathic and culturally affected job. So it’s important to have a manager close to the team. Removing roadblocks and impediments while understanding precisely what struggles the team is facing right now is a key to high productivity. It’s possible to manage developers from the outside by setting objectives, but a lack of clear communication will backfire.”
Alex Gostev, Agile Coach at QArea
We can assemble a team in 48-72 hours to meet the unique needs of your project.
Project Owner vs. Project Manager: Roles Compared
Besides a project manager, some projects may require the inclusion of a product owner, which isn’t the same role. A project owner (PO) is a person who brings vision to the project and ensures it stays on track with stakeholders’ long-term goals. Unlike project managers, who are mostly occupied with internal communication with the team, they work closely with project sponsors, stakeholders, and directors.
Traditionally, POs are in charge of business processes, the project’s market fit, and the overall success of the release. Aspects like business analysis, future product’s mission and vision, market penetration strategy, financing, and returns on sponsors’ investments also belong to the project owner’s responsibilities.
| Project Owner | Project Manager |
| Asks what and why about the product under development. | Asks who and how about the team members working on the product. |
| Develops a bigger-picture vision of the product on the digital market. | Focuses on daily work that should be done in accordance with the project plan. |
| Makes sure the necessary resources are being allocated to the project. | Allocates technical duties to developers and testers. |
| Needed at large and/or long-term projects. | Needed at all projects regardless of the scope. |
It is important to note that not every single digital project requires a project owner. You will most definitely need one for large projects like building a complex enterprise system or developing a software suite. You may also need one for medium-scope projects, but if your project is rather small and short-term, hiring a product owner will be overkill.
The same cannot be said about project managers, though. Even if a project is small, having a PM on board is required to complete tasks smoothly and efficiently and ensure timely project delivery dates.
Benefits of Project Management Outsourcing
There are numerous advantages of outsourcing project management that can contribute to the success of projects. Let’s look at some of the most important of them based on the reviews of clients who have experience with outsourcing project management services.
- Cost savings
Opting for an outsourced project manager, coupled with a remote development team, proves to be a cost-effective choice, eliminating expenses related to hiring and training the in-house staff. Moreover, the benefits of outsourcing project management go beyond personnel expenses.
By outsourcing the entire project management process to an outsourcing firm, businesses can trim down additional costs associated with equipment, tools, and location rent that might be otherwise essential for project competition. This not only streamlines the budget but also eliminates the need for significant capital investment in project management infrastructure.
- Time savings
When you outsource project management to the same company that you use for software development, you can gain significant time savings. First, most outsource companies have already predefined assets such as templates, guidelines, documentation, and so on, eliminating the need to create them from scratch. And second, they can take responsibility for managing, reviewing, and auditing PM processes so your team can concentrate on their regularly assigned tasks.
“Even though PM activities are delegated to the outsourcing company, this doesn’t prevent the client from stepping into the process at any time and introducing changes to the PM’s work.”
Roman Lyha, Head of PMO at QArea
- Flexibility
If there are certain processes established within your organization such as performance appraisals, mentoring programs, or personal development plans, they can be partly managed or delegated to the outsourcing partner. Additionally, outsourcing allows you to allocate resources full time or part time depending on the load, project demands, and business priorities. This flexibility empowers organizations to optimize resource allocation, maximize productivity, and achieve their strategic goals more efficiently.
- Expertise and experience
Engaging with outsourced vendors for project management brings a wealth of experience and industry experience to the table. Unlike in-house PMs, outsourcing providers work with clients from many industries, giving them an advantage in understanding the specific challenges of different businesses and skillfully navigating them.
Moreover, working with an outsourcing company gives you access to a large pool of PM specialists. This means you can select a PM with a skill set and knowledge that are relevant to your particular project.
- Tailoring to specific business needs
Another major benefit of outsourcing PM is that it allows you to tailor PM activities and processes based on your project size, team size, tech stack, and methodology using predefined presets. This way, whether your project is small or large-scale, outsourcing gives you the advantage of customizing your project management efforts to suit the specific needs of your business.
- Focus on core competencies
Another benefit of project management outsourcing is that it helps organizations save time. Instead of juggling multiple projects along with all the other day-to-day business activities, companies can focus on their core competencies and channel their internal resources on the areas that require the most attention and dedication.
- Scalability
By outsourcing software development to external project managers, businesses get the advantage of scaling and downsizing their project management resources as they see fit. For example, they can get more people during peak periods to complete projects faster and scale down during slower phases.
This way, instead of hiring new employees and taking on the financial risks of not knowing whether bringing on additional manpower will produce the results they expect, they can allocate resources wisely and ensure they have the people and tools they need at the right time.
- Faster hiring process
Outsourcing project management also speeds up hiring. If you’ve ever tried to assemble your own in-house project team, you know firsthand how time-consuming the process can be. Finding experienced candidates not only requires a lot of time to sift through thousands of CVs but also involves a lengthy onboarding process that increases the time it takes for a team to be fully operational and causes unnecessary delays.
In contrast, companies that opt to outsource project management may skip this step altogether. The benefit of turning to third-party management teams is that they are made up of already-vetted professionals. This means you can begin development almost immediately, eliminating delays associated with traditional recruitment cycles.
- Effective time management
Another advantage of outsourcing is that external PMs typically have extensive experience working with different types of projects. This allows them to foresee challenges and potential roadblocks and effectively optimize the workflow, ensuring the projects are delivered on time and within budget.
- Fresh perspectives
Last but certainly not least, by involving people outside of your team, you can take a fresh look at your project, recognize challenges that weren’t previously apparent, and find ways to implement innovative solutions. Many clients who have used outsourcing services have acknowledged that using external project managers has played a critical role in the success of their projects.
To Outsource Project Management or Not: Main Concerns and Ways to Overcome Them
Outsourcing is one of the most efficient strategies to expedite your business growth and scale up quickly. However, there is still a percentage of companies that have concerns when it comes to outsourcing project management. Let’s look at them and see how they can be overcome.
No direct control
One of the cons of outsourcing project management is that it rids you of direct control of the day-to-day project activities. Not all founders feel comfortable about it, and some may even believe that if they aren’t directly involved in the project, they may lose their authority.
Is that really the case? In a way, but not quite. It’s true that outsourced PMs will have more control over the development since they will spend more time together, but it doesn’t mean you won’t also have control. Outsourcing companies usually keep their clients updated by regularly arranging virtual meetings, producing reports, and writing emails so they know exactly what’s happening and can influence the process at any time.
Poor quality results
Another concern that some companies may have is that a contractor might not be able to meet their quality standards and that a final product will be of poor quality. While this issue could take place, this shouldn’t be a worry if you choose a reliable outsourcing firm. Companies that specialize in delivering projects for outsourced clients have rather strict coding standards of their own and will never begin development without understanding their client’s requirements and expectations.
Security concerns
Security concerns are among the other worries that may deter product owners from outsourcing project management. Some believe that if they share the details of their core business operations with a third party, this data may get into the wrong hands, and they may become a victim of fraud.
If you have the same concerns, they can be addressed by taking a number of security measures, such as signing an NDA, using encryption protocols, and maintaining communication within secure communication channels.
In addition, serious outsourcing companies usually obtain ISO certification to confirm they take extra measures handling sensitive data and comply with all data protection rules fully. For example, our team has received ISO 27001: 2013 certification – the globally recognized benchmark for information security management systems (ISMS).
So, before you jump into collaboration, make sure that the team you hire follows security best practices and is transparent about the protective measures they employ.
Communication issues
One of the other concerns for outsourcing project management may be the fear of not being able to maintain effective communication. This can be due to the time difference or language barriers if the team is based overseas.
While we don’t deny that these issues are possible, the good news is that with a choice of outside vendors available, finding a team that can work within a timeframe convenient for you has become a lot easier. In fact, most companies would pick a time that overlaps with yours so you can get real-time updates and communicate with the team seamlessly.
As for the language barrier, this shouldn’t be an issue either. IT specialists from all over the world get better and better at English, while project managers, as the key communicators, have advanced English skills to ensure smooth communication.
However, you don’t have to take just somebody’s words for it. It’s a common practice to interview potential candidates to assess their English language proficiency. If there’s anything you don’t like, be it the level of English or the accent, you can choose a different candidate.
Speaking of the latter, any decent outsourcing company should be able to offer you a replacement candidate if he or she doesn’t fit your certain criteria, even if you realize it halfway through the process. At QArea, our recruitment process includes thorough English proficiency assessments, and we also provide the option for candidate replacement if necessary at any stage of the project development.
Extra Costs
Finally, if a company already has a project manager, they may not see the point of hiring another one. They may look at it as an extra cost that doesn’t add apparent value to the existing setup. It’s a valid concern – why invest in an outsourced PM when an in-house professional is already in place?
However, when we look at the unique advantages an outsourced PM brings to the table, the perspective changes. A PM isn’t just an additional set of hands but a strategic partner who introduces fresh insights, diverse experience, and a specialized skill set. Moreover, they already know the team, which allows them to bring the most out of each team member without the need for any additional training. As a result, what you thought of as additional costs may result in actual savings in the long run.
Did we mention that most of the outsourced PMs are already certified, further reducing the cost? If your internal staff are not certified, but your next project requires one, it’s more reasonable and cost-effective to outsource project management rather than invest resources in obtaining it.
Final Thoughts
Outsourcing project management offers many benefits that make it a popular option for IT projects of all scales. First, it provides access to a diverse pool of skilled professionals with specialized expertise, allowing companies to assemble high-performing teams without the challenges of in-house recruitment. Secondly, outsourcing is a cost-effective option. By entrusting the management of a project to an outsourced PM, businesses can save money on training programs and many other costs associated with maintaining internal staff.
What’s more, it provides greater flexibility compared to traditional in-house models, as companies can scale their project management resources based on project demands. This way, you can only pay for the service you need rather than maintain a fixed in-house team with ongoing costs. In addition, keeping a project manager next to the development team is good in terms of overall work efficiency. Trust and emotional connection are the key to successful outsourcing that fosters effective collaboration and leads to successful project outcomes.
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