In this research paper, the section II describes about the program management in depth such as program management principles and program life cycle etcetera. The section III explains program management outsourcing and organization decision strategy. The following sections demonstrates some factors affecting the success of outsourcing as well as challenges to program management outsourcing are also evaluated.
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Today, business institutes manage several projects simultaneously with sharing resources from different geographical places. Program management is best solution to run correlated projects, in other ways effective program management is key to success for execution of organization’s objectives or to achieve worldwide customer satisfaction. The program management delivers strategic objectives, business plans etcetera.
A. Program Management
The Program Management Group defines program management as planning and monitoring of tasks and resources across a portfolio of projects and identifies that organization with implemented program management got advantages such as multiple projects can be handled concurrently, alteration in schedules, deadlines or in objectives can be maintained by different high skilled professionals. Program management is technique for managing interrelated projects or for example if a whole project is difficult to operate, then it is divided into smaller number of projects which are handled by number of project managers and all small projects are intended to have single objective for organization and to control these all projects, a program manager is required who will ensure that all projects are running on target and confirm their over-all involvement to program as a whole and responsible for evolution from present business operations to future approach.
B. Standard for Program Management Framework by PMI
Several Program Management Frameworks exist throughout the worldwide organizations such as PMI based Standard Program management, Managing Successful Programs Framework by UK government etcetera. PMI based Standard Program management consist of mainly three areas such as Program life cycle, Governance of program and managing stakeholders as well as benefits management.
- Program Governance and Program Stakeholder Management: Program Governance confirms alignment between business policy and pathway to desired outcomes over program life cycle or ensures the progress of program. Program Governance assistances in risk management, benefits of stakeholders and in decision making and delivery management. It also offers an organizational structure, polices and events to support proper program delivery. In other words, Governance in actual is a group of persons with executive and management roles and negligent functions systematized into structures and polices that help to define management values and decision making. Program Stakeholder management is important for establishment of program governance and organizational structure which is observed during program life cycle and program stakeholder management more likely to deal with that how program affect the stakeholders such as organizational culture etcetera and communication strategy is developed for managing their expectation and objectives of program
- Program Benefits Management: Benefit realization plan is developed as a part of program management to schedule benefits measurement activities along with strategic objectives of the organization. This planning includes delivering final benefits within the program and comparing it with initial business cases to confirm that program produces actual benefits.
- Program Life Cycle: The program milestones are used to manage programs same as project milestones. The program lifecycle involves five consecutive phases starting from pre-program setup, program setup, establishment of program management, Benefits delivery and closing phase. While moving program from different phases, program manager confirms that strategic benefits of program should be aligned with organizations’ mission and vision and program governance mechanism is recognized and program lifecycle complies with demands of organizations and expected benefits are realized in synchronized manner. Program Management process groups are set of interconnected activities performed to achieve a desired outcome.
Program management is technique for improving program from technical and management point of view. The program management resembles with construction management as the Construction Management association of America defines construction management as,” a professional service that applies effective management techniques to the planning, design and construction of a project from inspection to completion for purpose of controlling time, cost and quality”.
Outsourcing program management is process of transferring program life cycle management to outsider program management consultancy(PMC) and program is known as PMC managed program and usually happened in case of big projects and analogous experience, high skills and global class tools and technique and time management are main key points making program management outsourcing, a preferable method. All Public and private sector organizations are moving towards the outsourcing the program management for large scale programs. The program management outsourcing is adopted among various fields such as Public health, Construction, Oil and Gas sector and in telecommunication along with Olympics or any global events. The organizations go for program management consultants for managing large scale programs because of lack of skills and transfer managerial and technical risks to third party.
The survey conducted by Rasdorf indicates that in private construction sector mostly go for program management outsourcing than public sector. The survey was conducted on construction sector which covers program management aspects and when organization acquire services from outsourced management or hire external program managers to manage their programs then some factors are considered such as fees to external program manager, which organization providing services and criteria for selection of program manager, relationship between the organization and external service provider, experience of similar projects , on time delivery etcetera and cost can be negligible for decision of hiring any external program managers as more emphasis is on skills and expertise required.
A. Why Outsourcing Preferred?
The Program management outsourcing increase operational competence and cost budgeting can be reduced and Doz & Hamal et al. (1998)  discussed that in international market it is difficult to get potential profit from skills and expertise within a firm and increasing demand for products forces organizations to devote in tactical business alliance. Outsourcing is becoming popular because of its benefits such as external program managers examines the program activities and govern the running programs with strategic planning, controlling and scheduling. The ROI (Rate of Interest) is often better than if projects are handled in-house and it becomes better reference for future projects.
B. Outsourcing Decision Strategy
The benefits, risks and several factors are typically included in making decision of outsourcing. The following figure represents the Outsourcing decision strategy:
Figure 1: Outsourcing Decision Model
- The motivation for outsourcing included three key points such as cost, strategy and political. The cost outsourcing includes cost savings and strategy is more related to outsourcing because of hasty organizational growth and technological advancement and mostly public organizations drive outsourcing for services that include general well-being and social aspects and come under political driven outsourcing.
- The benefits that can be considered before making decision of outsourcing are cost savings, condensed capital expenses, flexibility, access to newest technology, access to technical expertise and improved accountability.
- The risks factors should be included while making decision of outsourcing. The poor selection of outsource provider can be a risk and changing environment and supplier problem such as relationship between provider and organization or less control and security can be the potential risks for the decision of outsourcing
C. Selection of Oustsourcing provider
The selection of provider is important concern after making decision of outsourcing. The skills and expertise are main components while selecting and depending upon the requirement of client, three main capabilities are considered such as delivery competency, relationship and transformation capability.
Figure 2: Outsoucing provider`s competenices
Proper relationship between Program Management Consultancy and organization is required for success of outsourcing. There are some factors reviewed which contribute to the success of program management outsourcing.
A. Business Case:
The business case is input documents program planning and building an outsourcing business case is necessary and for this research must be conducted and all assumptions should be clearly defined so that the benefits with outsourcing programs can be assessed. The business case should include substitute analysis that defends adoption of program management consultancy for delivery of program. The outsourcing step covers not only the reduced costs and technical expertise but also covers how business functions are affected for long duration of time. A Good Outsourcing business case determines the outsourcing solution should be associated with technical and business strategies of any firm. The most of the program execution decisions are determined by business cases. Hence, while outsourcing solutions the business cases are the important factors to consider.
B. Contract between Organization and Outsource provider:
Booz & Company directs that contract between the firm and program management consultancy is not just a paper document but “it is a vehicle that aligns the interest of two parties” and the strong relationship and delivery of good service always motivates customer to outsource more from that service provider. Contract Management Archetypes are the frameworks that investigate outsourcing relationships at individual stage and further at organizational level.
C. Program Governance Structure:
Program Governance basically develop a structure within which program management is executed and gives active route to monitor results and classify and execute the adjustments to achieve consequence. The organizations should have a structure to define their goals and there is no robust structure, it is implemented as per the practices and dynamics. The program governance is core part of program management that allows the organization to review the progress of the program aims and it provides a framework to get things on time and should be on track. The persons who directs program and organization employees must be organized and to confirm decision making their roles should be framed.
D. Roles and Responsibilities :
“Booz and Company” defines that an appropriate relationship structure between the organization and program management provider with accurate operational model can boost up the possibility of project success. The roles and responsibilities are the part of program governance but plays important role in success of outsourcing. In organizational structure the program manager directs other manager to achieve objective allied with business strategy. Program manager is supported by individuals and program management office. The appropriate allocation of roles and responsibilities leads to proper execution of program governance model. The following table demonstrates roles and responsibilities of some of staff members:
Table 1: Roles and Responsibilities
The program planner mainly responsible for making planning strategies and schedules for the program and maintain all these activities.
Budget administrator responsible for finances of the program and all financial activities.
The communication coordinator serves communication polices and handle all type of communications for the execution of program.
E. Program Stakeholder Management:
The standard of Program Management outlines stakeholders as,” those who interact with program and those who are affected by the program”. The project will not succeed if needs of stakeholders are not considered well. Stakeholder management manages the hopes of the stakeholders and their needs to get task done. The process of stakeholder management comprises the identification of stakeholder and their influence on the program which can be high. Moderate and low as well as communication supervision plan is established and stakeholders are engaged through good communication, relationship etcetera.
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F. Program Management Office:
The program management office(PMO) gives support to managerial and fiscal process. PMO has deep relationship with project coordination and in standardization of projects and enhance program management best practices. A definite procedure along with architypes, devoted program mangers, standards and standardized tools is offered by Program Management Office. The administrative polices, procedures and practices deliver operative framework for working employees for specific program. Program management office included delivery of program on time and within schedule. PMO can differ from single individual like program support to team of persons and can be dispersed over more sites if program distributed worldwide. The program management office is responsible for planning, tacking program and logistics management and setting quality standards, stakeholder management and benefits realization etcetera. Some additional roles are also involved such as auditing and strategic overview of project and providing health checks during the program. Program management key component of success of outsourcing
G. Capable Internal Staff:
The organization’s internal employees should be competent enough to oversight on some part of the programs for adopting substitute ideas and guarantee that programs are running on time and responsible for stakeholder engagement.
H. Procedures and process in Program Life Cycle:
The program lifecycle consists of program pre-set phase, program set phase which includes scope and planning and after that establishment of program structure and delivery of benefits and last phase is program closure. Program management consultancy is responsible for evolving the program practices, processes across the programs life cycle in coordination with firm and implementation of all programs and procedures are come under program audit office.
I. Organization and Program Management Consultancy cultural:
The relationship between the organization and PMC has important impact on the achievement of program success. In case of IT projects, there are issues in cross border outsourcing of software and IT programs and for resolving these issues, organization should make appropriate choice of projects and relationship should be managed through cultural trainings and extra efforts are required to manage cross cultural issues of outsourcing. The cultural difference between program management consultants and organization employees can make difference in final output. A good relation between provider and company can make the outsourcing program successful and tries to build long term relationship between client and service provider.
Khamooshi et al. conducted a survey to find top challenges of implementing program management outsourcing. The following figure represents the top five challenges. Mainly challenges to program management outsourcing success are improper program management practices and lack of business cases and if roles and responsibilities and delegations are not assigned properly that will lead to obstacle for success of program management outsourcing and improper stakeholder engagement and other top five hindrances to success of outsourcing are difference between culture of organization and program management outsider and absence of program management office , Governance structure absence is also major challenge to outsourcing. Lack of competent internal staff for managing activities and improper contract model between PMC and organization.
Figure 3: The Organization and Program management consultant’s viewpoint on top five challenges
- The Client firm and PMC Cultural Difference:
From study analysis of survey, cultural difference is top challenge to the success of outsourcing. The cultural difference arises when outsourcing internationally come into place such as social and economic difference such difference in culture of United states and United Kingdom. Organizational culture difference is also one aspect when organization is government firm. Due to cultural difference, some organization are resistant to change their work practices while outsourcing. Hence, proper training should be given individuals in organization during outsource from international consultancy specifically in case of IT outsourcing.
- Non-appearance of Program management Office and Audit functions: The Program management office plays important role in managing large programs and stakeholders. The survey study resulted that it is second biggest obstacle in program management outsourcing. The PMO is only unit of firm that provides regular check on program execution and serves standards and polices to program management consultancy and to client firm also. The absence of PMO can lead to no resources and time optimization and inefficient decision making.
- Lack of Competent individuals in organization: The organization can outsource the program management but cannot outsource the program governance unit. PMI has been trying to develop a shared program management vocabulary but company and outsource providers still not use same program management language. The non-professional staff in organization can be obstacle to the relationship between firm and PMC.
- Inappropriate program management Model and Risk allocation strategy: The organization and program management advisor have different scope of interests such as organization like government funded complete their programs with low budget and in short duration of time but on the other hand outsource provider have different perspectives. The contract between both fails to put both firm and program management advisor on same leaf can lay the entire program on risk due to improper program management consultant model. For example, the Booz and Company recommends cost plus incentive fees structure as efficient model in program management outsourcing agreement and inducements are provided after completion of program at time and within budget. But in case of increase delays and cost over runs, performance based risk sharing agreement plan is better method. Suitable program management model and risk strategy can lead to the success of program outsourcing.
- Lack of efficient Governance structure: In case when a program is outsourced to PMC, too much dependence on provider or blind trust and negligence of role of organization can be happened and leas to several issues that organization does not interfere with program management consultant`s work apart from financial structure and lack of accountability also arises due to unstructured contract administration. For example, PMC accepts design structure that comes from outsider design expert may contain some errors which are notified at the time of implementation and neither program management consultancy nor outsider expert take accountability of occurred errors and benefits should be delivered as expected and this is only possible through good governance structure. The roles and responsibilities of client and outsider should be defined as it is vital part of program governance. Sometimes situation is that shared and indistinct responsibility will lead to solemn consequence. The lack of performance management is also hindrance to success of outsourcing.
In this research paper, a case study related to outsourcing program is reviewed to know about how program management outsourcing concept works with real world examples.
A. Background of Case Study:
Acknowledgment (Heading 5)
- G. Eason, B. Noble, and I.N. Sneddon, “On certain integrals of Lipschitz-Hankel type involving products of Bessel functions,” Phil. Trans. Roy. Soc. London, vol. A247, pp. 529-551, April 1955. (references)
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