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A Strategic Guide for Local Government On: Outsourcing

Creating a Project Management Plan

Project management begins early and should be retained in house because it’s the function that oversees resources, schedules, risk man- agement, and budget control in the interest of the organization.

The city of Chicago retains the project man- agement of the outsourcing arrangement. The PM drives innovation, flexibility with contract issues, and most importantly, the relationship between the organization and the vendor. The deputy director of the city of Indianapolis and Marion County believes that strong project management should remain in house so that the knowledge is retained in the event of termination of the contract.

The plan should address the issues of roles, responsibilities, processes, issue, and risk esca- lation, conflict resolution, maintenance, sched- ules, scope management, and change and resource management. The plan should focus on vendor relationship management. Mutual trust is key, and recognition of the importance of communication through regularly scheduled meetings and meaningful reporting mecha- nisms.

Analyzing the System Environment

The next step and a key element of the project management plan is to analyze the system environment to prepare for transitioning the functions and processes to the outsourcer. The business processes that will be outsourced should be analyzed to assure the processes are efficient or to identify efficiencies to be gained.

Outsourcing requires an examination of inter- nal processes, which usually leads to improving processes. The true value that outsourcing brings is the opportunity for an organization to become more efficient and effective, and reduce or maintain costs. It forces organiza- tions to answer difficult questions, such as:

In addition, along with streamlining the processes, the inventory of assets involved in the outsourcing agreement should be com- pleted. The contract, SOW and SLAs reflect an accurate account of the system environ- ment and project scope. Minneapolis’ CIO believes in allowing enough time for due dili- gence to develop an accurate inventory, improve the RFP process and allow the ven- dors to develop a greater understanding of the scope of the project.

  • What are the primary objectives of the department or organization?

  • What processes are in place to support those objectives?

  • Who is involved in implementing these processes?

  • Are there multiple functions involved in the process?

  • How can performance be improved in the process?


By finding the answers, organizations docu- ment the current processes, find areas that need improvement and enable the out- sourcers to focus on the new improved processes.

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