Managing Outsourced Projects

Outsourcing of project work is more common today than ever. However, even though you outsource the work, you cannot completely outsource your obligation to make sure the project is progressing smoothly. If all goes well with the outsourcer, you do not have much work to do. Unfortunately, in many instances, the outsourcing vendor does not perform against expectations. If that happens, you want to know about it as soon as possible. For the purposes of this discussion, let us assume that your company has outsourced a project, or a portion of a project. Your company has also asked you to manage the relationship to ensure the vendor performs as expected.

Many people are not sure what they should be doing when they are asked to manage an outsourcing relationship. Part of the uncertainty is because some of the project roles are reversed when you outsource work to a third-party. On a normal internal project, the project manager assigns the work and manages issues, scope, risk, quality, etc. The project manager makes sure work is done on time and the project is progressing as it should. He is held accountable for the success of the project. Other people perform a quality assurance role to make sure things are progressing as they should.

With an outsourced project, the vendor takes on the direct management of the outsourced work. The client project manager is now the one that has to ask the quality assurance questions to make sure the vendor project is progressing as it should. Some of the up-front questions to ask include:

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Is there a contractual agreement that spells out the expectations of both parties in terms of deliverables to be produced, deadlines, payment schedule, completeness and correctness criteria, etc?
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Has a comprehensive project schedule been created?
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What is the Project Management Plan the vendor will use to control the project?
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Has the vendor been clear on what resources will be needed from your company and when they will be needed?
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Have a number of agreed-upon milestones been established to review progress so far and validate that the project is on-track for completion?

Ongoing Questions

As the project is progressing, you must continue to ask questions to determine the current state of the work. You may have status meetings weekly, but there should be a formal quality assurance check at the end of every agreed-upon milestone. The types of questions you would ask at every milestone include:

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Have the deliverables specified in the Project Charter been completed up to this point?
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Have the appropriate deliverables been agreed to and approved by the company?
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If the vendor has met expectations up to this point, have any interim payments been released?
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Can the vendor clearly explain where the project is vs. where it should be at this time?
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Will all the future deliverables specified in the Project Charter be completed?
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Are issues, scope, and risks being managed as stated in the Project Management Plan?
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Should the contract or Project Charter be updated to reflect any major changes to the project?

Once you understand your role on the project, it is easier to ask the right questions to make sure that everything is progressing as it should.

The Discovery Project

For large projects, there is a tendency for the project definition process to become very lengthy and unfocused. Defining the work for very large projects takes enough time that it should be structured as a project itself. This is the purpose of defining a separate Discovery Project.

This should make sense. If the project is ultimately going to take 50,000 effort hours, it may take a number of months to get the project defined and approved. In these cases, a distinct first project is established to define the second larger project itself. The final deliverable for a Discovery Project is a completed Project Charter, Project Management Plan and project schedule for the subsequent large project. For the most part, all the other deliverables will be produced as a part of the next follow-up project.

The Discovery Project should be planned and managed as a project. This includes defining the work, building a schedule and budget and subsequently managing the Discovery Project. You want to make sure you are clear on what is expected at the conclusion of a Discovery Project.

Discovery Projects, like all projects, come in all sizes. You should estimate the effort and duration required for the Discovery Project. Based on the effort required for the Discovery Project, you can categorize the Discovery Project itself as small / medium / large. Remember that this is the relative size of the Discovery Project, not the final project. Depending on the size of the Discovery Project, you again have three options on how to define the work.

For a small Discovery Project, a service request can be created to define the work. Even thought he Discovery Project is small, you can assume that the final project deliverable will be a full Project Charter and a project schedule for the subsequent project.

For a medium-sized Discovery Project, you should follow the TenStep Project Management Processes for defining and managing a medium project. The Discovery Project should have an Abbreviated Project Charter and project schedule, and be managed just like any other medium-size project, including managing issues, scope, risk, etc. When the Discovery Project is complete, the Project Charter, Project Management Plan and project schedule for the subsequent project should be created. The approval process for these documents should be a part of the Discovery Project. Assuming that the Project Charter is approved, the subsequent larger project can start at any time. However, the TenStep steps 1.0 Define the Work and 2.0 Build the Schedule and Budget will already be completed. (These planning processes were the purpose of the Discovery Project). The project management process for this subsequent project can begin in Step 3.0 Manage the Schedule and Budget.

If the size of your Discovery Project is, in fact, a large project itself, you should follow the steps required for defining large projects. You would want a full Project Charter to define the Discovery Project, and you would want a full project schedule, budget and Project Management Plan. If the Discovery Project is a large project, the subsequent project will generally be huge - perhaps a program of related projects. Similar to a medium project, the Discovery Project would create the Project Charter, schedule, budget and Project Management Plan for the subsequent larger project (or program). Assuming that the Project Charter is approved, the subsequent larger project can start after the Discovery Project is completed.