Outsourcing Project Work: Why, How, When?

…being a good partner has become a key corporate asset. I call it a company’s collaborative advantage. In the global economy, a well developed ability to create and sustain fruitful collaborations gives companies a significant competitive leg up.
Rosabeth Moss Kanter, Harvard Business School professor

It is rare in today’s flat world to find important projects that are being completed totally in-house. Outsourcing or contracting significant segments of project work to other companies is commonplace.

For example, nine states attempting to unify the accounting of all their state agencies did not have the internal resources to implement such a large project. Hence, project teams were formed consisting of personnel from software, hardware, and accounting firms to implement the projects.

Small high-tech firms are outsourcing research to determine what features customers value in new products they are developing. Even industry giants such as Microsoft and Intel commonly hire independent firms to test new products they are developing.

Contracting/outsourcing project work has long been the norm in the construction industry, where firms hire general contractors who, in turn, hire and manage cadres of sub-contractors to create new buildings and structures.

For example, the Channel project, which created a transportation tunnel between France and England, involved more than 250 organizations.

Contracting is not limited to large projects.

For example, an insurance company worked with an outside contractor to develop an answering service that directs customers to specific departments and employees.

The trend for the future suggests that more and more projects will involve working with people from different organizations.

Outsourcing Guide

This article extends on several other articles that opened the discussion of building and managing relations by focusing specifically on issues surrounding working with people from other organizations to complete a project. To get a complete overview of what topics will be covered in future related articles please take a look at the list below. I will provide links to every article for quick and easy access.

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