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Managing Outsourced Projects
 Outsourced Workforce Management
There is an increasing reliance on outsourcing to meet business needs and demands. As more and more organisations outsource the development and implementation of their IT applications, the skills required to manage an outsourced project are now becoming very crucial for the success of the project and the business. Outsourcing has potential risks and careful management is required if the real benefits are to be realised.
Outsourcing is the delegation of tasks or jobs from internal production to an external entity (such as a subcontractor). Most recently, it has come to mean the reduction of native staff to staff overseas, where salaries are markedly lower. This is despite the fact that the majority of outsourcing that occurs today still occurs within country boundaries, especially in North America. It became a popular buzzword in business and management in the 1990s.
Overview
Outsourcing and out-tasking involve transferring a significant amount of management control to the supplier. Buying products from another entity is not outsourcing or out-tasking, but merely a vendor relationship. Likewise, buying services from a provider is not necessarily outsourcing or out-tasking. Outsourcing always involves a considerable degree of two-way information exchange, co-ordination, and trust.
The concept started with Ross Perot when he founded Electronic Data Systems in 1962. EDS would tell a prospective client, "You are familiar with designing, manufacturing and selling furniture, but we're familiar with managing information technology. We can sell you the information technology you need, and you pay us monthly for the service with a minimum commitment of two to ten years."
Organizations that deliver such services feel that outsourcing requires the turning over of management responsibility for running a segment of business. In theory, this business segment should not be mission-critical, but practice often dictates otherwise. Outsourcing business is characterized by expertise not inherent to the core of the client organization.
A related term is out-tasking: turning over a narrowly-defined segment of business to another business, typically on an annual contract, or sometimes a shorter one. This usually involves continued direct or indirect management and decision-making by the client of the out-tasking business.
With the rise of Globalisation, many companies are turning to either offshoring or offshore outsourcing. Stock markets pressures requires that managers search out the cheapest sources of services they can find. In countries like India and China companies like IBM, Microsoft, Hewlett Packard, and Novell choose to get services from sub-contractors in these countries or move many development and support jobs there. Smaller businesses can also take advantage of freelancing on the Internet to get smaller projects done by offshore developers at minimum cost.
Source : www.centipedia.com
Strong management of these projects especially as they are likely to be part of a number of other business activities that are locally managed and staffed, or where activities use a combination of internal and outsourced staff is key to success.
This selection of papers looks at how using the internet to link geographically disconnected centres of activity provides companies with a framework within which to explore the creation and maintenance of a virtual or disembodied organisation.
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