Outsourcing

Outsourcing Project Work

Advantages of Outsourcing

• Cost reduction: Outsourcing can lead to significant cost savings, as it allows companies to leverage lower labor costs in other countries.
• Focus on Core Competencies: Outsourcing non-core activities allows companies to focus on their primary business functions.
• Access to Expertise: Outsourcing to specialized service providers can provide access to expertise that may not be readily available within the organization.
• Scalability: Outsourcing can facilitate scalability, as service providers can quickly increase or decrease resources as needed.
• Risk Management: Outsourcing can help manage risks associated with new or untested technologies or markets.

Managing Risk

Risk Management Process

Risk Defined:

• An uncertain event or condition that if it occurs, has a positive or negative effect on project objectives.
• No amount of planning can overcome or control risk.

Risk Management Defined:

An attempt to recognize and manage potential and unforeseen trouble spots that may occur when the project is implemented.

• What can go wrong (risk event)
• How to minimize the risk event’s impact (consequences)
• What can be done before an event occurs (anticipation)
• What to do when an event occurs (contingency plans)

Benefits of Risk Management

• A proactive rather than reactive approach
• Reduces surprises and negative consequences
• Prepares the project manager to take appropriate action
• Provides better control over the future
• Improves chances of reaching project objectives on time, within budget, and of meeting required performance.

Cost and Time Estimation

Is a trade-off, balancing the benefits of better accuracy against the costs of secured increased accuracy.

Types of Estimates

Top-down (macro) estimates

• Analogy
• Group consensus
• Mathematical relationships

Bottom-up (micro) estimates

• based on estimates of elements found in the work breakdown structure

Why Estimating Time and Cost Is Important

• To support good decisions.
• To schedule work.
• To determine how long the project should take and its cost.
• To determine whether the project is worth doing.
• To develop cash flow needs.
• To determine how well the project is progressing.

Project

What Is a Project?

Project Defined (according to PMI):

• A temporary endeavor undertaken to create a unique product, service, or result.

Major Characteristics of a Project:

• Has an established objective.
• Has a defined lifespan with a beginning and an end.
• Involves several departments and professionals.
• Involves doing something never done before.
• Has specific time, cost, and performance
  requirements.