Chapter 12 Flashcards
Outsourcing Project Work
Advantages
Cost reduction
Faster project completion
High level of expertise
Flexibility
Outsourcing Project Work
Disadvantages
Coordination breakdowns
Loss of control
Interpersonal conflict
Security issues
Project Partnering & Outsourcing
Partnering
A process of transforming contractual arrangements into a cohesive, collaborative team that deals with issues and problems encountered to meet a customer’s needs.
Factors favoring partnering:
Existence of common goals
High costs of the adversarial approach
Shared benefits of the collaborative approach
Project Partnering & Outsourcing (2)
Assumes that an adversarial relationship between the owner and contractor is ineffective and self-defeating.
Assumes that both parties share common goals and mutually benefit from the successful completion of projects.
Power struggle – of change – push against me
When we looked at handing out information as currency – project management can be highly politicized – from the real – it can be exciting and fun or as part of a change approach – does not work
Depends on what comes from the top.
Best Practices for Outsourcing Project Work
Well-defined requirements and procedures.
Extensive training and team-building activities.
Well-established conflict management processes in place.
Frequent review and status updates.
Co-location when needed.
Fair and incentive-laden contracts.
Long-term outsourcing relationships.
Partnering Approach
Mutual trust forms the basis for strong working relationships.
Shared goals and objectives ensure common direction.
Joint project team exists with high level of interaction.
Open communications avoid misdirection and bolster effective working relationships.
Long-term commitment provides the opportunity to attain continuous improvement.
Traditional Approach
Suspicion and distrust; each party is wary of the motives of the other.
Each party’s goals and objectives, while similar, are geared to what is best for them.
Independent project teams; teams are spatially separated with managed interactions.
Communications are structured and guarded.
Single project contracting is normal.
Partnering Approach (2)
Objective critique is geared to candid assessment of performance.
Access to each other’s organization resources is available.
Total company involvement requires commitment from CEO to team members.
Integration of administrative systems equipment takes place.
Risk is shared jointly among the partners, encouraging innovation and continuous improvement.
Traditional Approach
Objectivity is limited due to fear of reprisal and lack of continuous improvement opportunity.
Access is limited with structured procedures and self-preservation taking priority over total optimization.
Involvement is normally limited to project-level personnel.
Duplication and/or translation takes place with attendant costs and delays.
Risk is transferred to the other party.
Communicating With Outsourcers
STRATEGY 1: Recognize organizational cultural differences
STRATEGY 2: Choose the right words
STRATEGY 3: Confirm your requirements
STRATEGY 4: Set deadlines
Sustaining Collaborative Relationships
Establish a “we” as opposed to “us” and “them” attitude toward the project.
Co-location: employees from different organizations or department work together at the same location.
Establish mechanisms that will ensure the relationship withstands problems and setbacks.
Problem resolution
Continuous improvement
Joint evaluation
Persistent leadership
“We” is the key!
Why Project Partnering Efforts Fail
Causes of Partnering Failures
Senior management fails to address problems or does not empower team members to solve problems.
Cultural differences are not adequately dealt with so a common team culture never develops.
No formal evaluation process is in place to identify problems and opportunities at the operating level or to assess the current state of the partnering relationship.
A lack of incentive for continuous improvement by contractors participating in the partnering relationship.
Project Completion-Celebrating Success
Conduct a joint review of accomplishments and disappointments.
Hold a celebration for all project participants.
Recognize special contributions.
Advantages of Long-term Partnerships
Reduced administrative costs More efficient utilization of resources Improved communication Improved innovation Improved performance
The Art of Negotiating
Project management is NOT a contest.
Everyone is on the same side—OURS.
Everyone is bound by the success of the project.
Everyone has to continue to work together.
