The Pros and Cons of Outsourcing Project Delivery

The key decision around whether to  in-source or outsource your digital project delivery function rests firmly around several considerations, namely:

  1. the nature of the project
  2. the complexity involved in the project
  3. existing internal capacity/availability, capabilities and competencies/expertise

Importantly to call out, there are pros and cons of both resourcing models. Below are some musings and questions businesses should ask themselves which should guide in decision making.

Does your in-house team have the necessary expertise to deliver?

In answering yourself this question remember, that most businesses have projects that are either one off or repeatable. For one off projects, these best are served by drawing on expertise from outsourced vendors as they carry often a higher risk profile and usually involve far more unknowns. 

Whilst building in-house expertise should always be considered, in certain instances once the project is completed, the skills developed by the internal team may simply not be portable due to the one off nature of the project.

Mobilising and developing an internal capability can be a significant investment (and often is more expensive than if assuming an outsourced model) and even once in place may not possess requisite skills and expertise to manage effectively both one off and repeatable projects. 

In contrast, engaging an external vendor with runs on the board in niche areas can de-risk delivery and – if managed well – will increase the liklihood of successful project delivery.

Is it a simple or complex project?

Depending on the complexity of your projects, in-house project management teams can do well for repeatable  projects where over time risks and other variables can be far better known and controlled. Take for example, infrastructure related projects, i.e. Operating System upgrades etc. These projects can best be undertaken by an internal team rather than requiring external expertise. Maintaining core system support and knowledge is key.

In contrast, one off projects depending on complexity are best delivered by external specialists.

Will the outsource vendor have skin in the game?

This is more a consideration once a decision has been made to outsource. First and foremost, a delivery partner should be identified with the expertise that is required to execute the project.

The next step is to assess if your selected partner has sufficient skin in the game to ensure they will be full committed to the right outcomes for the duration of the project.

Whilst contractually there are some safe guards that can be put in place in terms of SLAs and similar agreements, this should not replace due diligence and significant efforts on the part of both parties to foster an extremely collaborative relationship for the duration of the project.

This is best achieved if the relationship is established from the outset to be less master/servant and more one of a partnership.

Digital Rehab commonly operates on a discounted day rate and a success bonus demonstrating a willingness to carry some skin in the game and for complete alignment with successful delivery.

What is the risk to the business if the project fails?

All projects contain risk. These risks can impact on a business. Risk profile of a project should also be factored into the decision making around the suitability of in-house versus outsource models.

Outsourcing can appear the more costly option at the outset but this should be set against the potential cost, operational and reputational impact to the business of project failure.

Typically the greater the potential adverse impact to the business of project failure then the more consideration should be given to different delivery approaches including outsourcing the project to a partner with expertise.

Change Management

Managing change is one of the most critical elements in ensuring success of any project. It has been my recommendation to hundreds of clients that the process of change is best undertaken by stakeholders within the business rather than having reliance on an external vendor managing the change process in a setting, structure and foreign organisational cultural. Yet, change is rarely managed well. 

So, seeking external guidance during the change process usually also provides for greatest success.

Due diligence, contextual assessment & governance

Outsourcing digital project delivery is a proven model and should be given due consideration when an organisation is deciding how best to deliver a diverse portfolio of projects.

Irrespective of the delivery approach taken, outsourced projects should still be covered by sound portfolio management and internal project governance if the best results are to be achieved. 

If you wish to speak further around your digital project requirements and what delivery options are best  suited, call us on 0414 869 530

Looking for outsourcing your project to best ensure success? Speak to us!