Don't outsource program management

A large program consists of related projects that must be designed, managed and coordinated as a single entity in order to achieve the optimal outcome.

Today's IT organizations are developing fewer large programs in-house and buying more outside. This is increasingly due to necessity. After budget-squeezing, downsizing and outsourcing, many companies no longer have enough staff (or the right skills) to deliver on a grand scale.

When corporations need to undertake large programs, their IT organizations often outsource most of the tasks. It may be tempting to also outsource program management, but this function is critical to success and should never be outsourced.

Consider, for example, a new reservations system. It contains many separate projects: resource acquisition, marketing, development, customer support, rollout, maintenance and so on. Effective program management of these disparate projects is required for program success. While any or all of these projects may be successfully outsourced, the program management function should never leave your company. In addition, unless you and your outsourcer operate at Capability Maturity Model Level 4 or 5, you should have a "mirror" project manager on your staff. This is especially true when parts of the program are being sent offshore, which increases program complexity.

Moreover, many large programs involve changing internal organizational structures and business processes. You and your co-workers have a better understanding of these (and your company's culture and business needs) than any outsider can have. Also, you and your team are more motivated to make your program succeed than any outsider, since your long-term success is tied to the program's success.

A program is most likely to be successful when the people who develop and manage it are ultimately accountable for its operation and overall performance. Never outsource responsibility for the success of a program. Keeping its management in-house will enable you to maintain dedicated resources to the program, undivided loyalty, clear process ownership and timely problem resolution.

Managing large programs is no small undertaking. It requires time, effort, people and money -- as much as 15 to 18 percent of the total program budget. Moreover, it requires specialized program-management skills that many companies simply do not have.

If your organization lacks the necessary program-management skills, don't acquire them from an outsourcer. Instead, rent them from a boutique consulting firm that specializes in program and project management.

Consultants provide an independent source for measuring program progress as well as that all important tie-breaking vote.

When you and your outsourcer disagree, a consultant can mediate objectively and help break unproductive standoffs.

As IT builds less and buys more, effective program management becomes increasingly critical to the success of your programs and ultimately to the success of your company. If you allow your outsourcer to also serve as your program manager, you lose your leverage and allow accountability for the program to drift outside your company. Augment your resources; don't abdicate your responsibility.

Bart Perkins is managing partner at Leverage Partners

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