Project Management Institute

"Smart" sourcing



Valuing and cultivating interpersonal relationships and acknowledging the “people side” of project management is of increasing importance to today's project managers. PM Network addresses the topic with the launch of this column.

On a flight to Asia, a businessman approached me and asked, “Can you please tell me why all Indians shake their heads when they speak?” While keeping my head perfectly still I responded dryly, “No, actually, I don't think I can!”

Although stereotypes still exist in the 21st century, in my travels between Asia and Europe, I have seen the universal truth: We all have problems managing people, and nowhere is this more evident than in the outsourcing of projects.

The controversies surrounding outsourcing and the use of countries such as China, Malaysia and India show how much people management is being overlooked, as the increasing need to communicate effectively across both time zones and preconceived notions (such as the one I encountered on the plane) impact both time and performance. In Japan, I learned of people's frustration with outsourced projects to India. In Germany and England, I learned of project managers’ frustration with outsourced projects to India. In Singapore, I learned of the Indian frustration with outsourced projects from everywhere else.

When projects are outsourced, the cost of miscommunication—misunderstandings that are the result of misinterpreted content, tone or word choice—as it relates to people management is grossly disregarded. Take this example from a large financial organization with outsourced projects in Asia.

The company creates regular reports on its key accounts, and of the 12 reports filed a few months ago, four were inaccurate because of a simple yet hugely detrimental misinterpretation: One of the outsourced project team members mistook the brackets around £95 million to mean the account was in credit and generated a report to that effect. However, the brackets really indicated the account was that amount in debt. By chance, a senior manager discovered the mistake before the funds accidentally were made available to a heavily overextended credit line.

By chance, a senior manager discovered the mistake before the funds accidentally were made available to a heavily overextended credit line.

Not enough attention is paid to the cost of poor or inadequate people and expectation management, as well as training and development. I urge all project and program management stakeholders to make better decisions by:

Considering cultural sameness between the supplier and purchaser organizations

Developing shared quality objectives with regard to stakeholder management, deliverables and completion criteria

Paying close attention to contractual orientation and knowledge ownership.

When these factors are considered in conjunction with project scope, deliverables, constraints and timescales, project managers can determine the best “smart sourcing” strategy:

Do-It-Yourself Sourcing: Utilize existing skills within the project team as a first resort

“In” Sourcing: Gain resources and expertise, such as that of a systems architect, from within the organization to supplement the existing team.

“Back” Sourcing: Recognize the skills that the organization needs for the long-term, such as SAP skills, and recruit staff that can fulfill these needs on future projects

“Out” Sourcing: Identify the project deliverables that are not business-critical, such as payroll activities, and outsource only these things.

Projects benefit from thorough planning and foresight, in which a project's location is chosen based upon the breadth of its critical success factors, not simply because the hourly or daily rates are cheaper in another country, and the workers speak English. All projects must start with an understanding of people. PM

Sheilina Somani, PMP, is owner of Positively Project Management and vice president, education, for the PMI Diversity Specific Interest Group.


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