As the IT industry grows up and more and more skills are
concentrated on the supplier side, the issue of whether to source
project management is a matter the users will have to resolve.
Project management might better be understood and executed if it
were called risk management. The decision whether to keep the
project management of a major installation in-house or to outsource
to a third party should really be dictated by where you want to
load the risk.
In the experience of David Biondini, director of business
development at systems integrator Logica, if a contractor is
charged with the installation of hardware and software of a system,
it makes sense for them to own the programme management role too.
"If, in this scenario, the project management were on the client
side, they would be one step away from the project and wouldn't
have the necessary visibility," he maintains.
Calling in a third party
Another model for
project management is a shadowing role where a third-party
specialist advises the in-house project manager. For Ray de Winter,
principal consultant with Cornwell Associates, this has been a
typical role and a very effective way of cutting through the
internal politics that can, all too often, sabotage a project.
"In a big organisation, quite often you need someone in-house to
manage the in-house politics - it's the only way to get through.
The only way to get a project off the ground is the to promote the
perception that someone in-house owns it," says de Winter.
Such a partnership would work with the in-house person presenting
the face of the project and receiving advice behind the scenes from
the contractor. And, when a project changes business processes and
the way that people would have to behave, it becomes even more
crucial to sell the project from inside, says de Winter.
Watch out for conflicts of values
He even
suggests that to outsource the project management slice in its
entirety is risky, pointing out that outsiders have a different set
of objectives to the company.
While it's possible to manipulate a contract through incentives, he
points out that there is the inherent danger that contractors will
work to incentives, not the greater good of the company.
This conflict of values would emerge most strongly should the
business change halfway through a project, which would require a
reassessment of the project.
"When a project becomes difficult or contentious, contractors tend
to do what they were commissioned to do," he warns.
An opposite point of view contends that outsourcing project
management wholesale offers the prospect not only of implementing
within time and budget, but of reaping business benefit.
Outsourcing project management that is defined in terms of business
benefit would mean rewarding a third party on its ability to
deliver value and opens up new vistas of sharing risk - and
reward.
"A smart way to measure project management is whether business
benefits are delivered within agreed time frames," confirms Tom
Abram, chief executive officer of Mantix consultancy and chairman
of Eurim's Modernising Government group.
If a deal specifies that a third party is paid on the basis of
sharing cost savings and taking a percentage of any accrued
benefits, it would be easy for them to rack up payment of £15m in a
project which has identified a £50m business benefit.
Perhaps it's hardly surprising that although Mantix has been
offering this type of "no win no fee" deal for 15 years, few
customers have opted to proceed on this basis. "The problem is that
people find it difficult to believe in their own business cases and
risks " concludes Abram.
Quality people for a quality project
A more
common reason for looking to an outside party is to secure the
quality of personnel. The biggest problem identified by Abram in
the DIY scenario is that companies do not put their best people in
the project or, if they do, they try to stint on their time. This
insight is corroborated by Bill Yule, principal consultant with
project management specialist Pink Rocadde, corroborates
this.
In a previous life when he worked for a major food distribution
company, Yule was appointed the project manager of a major roll-out
of till software across all company outlets, while being expected
to continue his existing roles, which included managing field
support teams and some internal systems.
"The project went well because I put in ridiculous hours and pulled
a good team together," he recalls. But, he admits, the strain was
tremendous. "At one stage, I was as close as I've ever been to
thinking it was too much."
A little confidence goes a long way
However,
these models are all academic and in real life nothing is that
clear cut. Commentators tend to agree that confidence can carry
projects a long way and plug the gaps left by methodology or
technology shortcoming.
"Both sides need to articulate continually that they are on track,"
Biondini says. This is particularly important in scenarios where
business requirements take a lot of modification - and time- to be
transformed into code.
As the IT industry continues to consolidate and more skills are
concentrated on the supplier side, the issue of where to source
project management is one that users will have to resolve:
"Traditionally, management consultants used to supply the layers of
project management between client and vendor. But, increasingly,
these consultants are becoming the suppliers of the system," says
Abram.