Elements of Offshore Project Management

Keeping all your projects on time and on budget. Meeting all your service level commitments. Keeping the offshore team motivated and focused on delivery. These are the challenges that keep most managers awake at night.

Offshore program and project management involves four critical activities:

1. Transition Management
2. Governance
3. Performance Management
4. Quality Management

Transition Management
Despite rigorous due diligence, vendor reviews, and test projects, the real work begins once the contract is signed. Smooth transition management is the next issue to tackle. This is considered to be a critical success factor of offshore initiatives. Transition management is defined as the detailed, desk-level knowledge transfer and documentation of all relevant tasks, technologies, workflows, and functions. The transition period is perhaps the most difficult stage of an offshore endeavor, taking anywhere from three months to a year to complete.

Transition management involves the following:

• Develop transition plan (key activities, milestones, resources, dependencies)
• Facilitate transition operations and/or initiation of projects
• Transfer knowledge of internal procedures and processes
• Manage strategic and operational communications
• Manage employees - redeploy, transfer, or terminate
• Document lessons learned to improve vendor management

Governance
After you have begun managing the transition, it's time to turn your skills to governing the offshore relationship - captive center, joint venture, or external vendor. This goes beyond merely monitoring contractual obligations. It focuses on proactive and collaborative management of the relationship, the evolution of services provided, ongoing communication processes, performance review standards, and overall project management. Governance is another one of those areas of offshoring that can make or break a project.

Ongoing governance involves the following:

• Project management - communication, collaboration, and monitoring of the vendor.
• Relationship management - necessary to compensate for the loss of direct interaction between stakeholders, managers, and team members.
• Change management - ensures that standardized procedures are used for efficient, prompt handling of all changes.
• Risk management - describes the processes concerned with identifying, analyzing, and responding to outsourcing partnership risks.

Performance Management
As offshore outsourcing becomes viable for multiple business processes, the types and complexity of contracts and sourcing alliances are bound to explode. With organizations outsourcing almost every aspect of their operations, multiple vendors participating in sourcing deals, business users and governance teams residing in separate locations, and activities occurring 24x7, it's a nonstop challenge to coordinate interactions, manage performance, monitor contract terms, track financial metrics, and maintain alignment. A disciplined, continuous improvement program is a necessity for long-term success.

Ongoing governance involves the following:

• Continuous performance reporting - measures outsourcing effectiveness using appropriate metrics, SLAs, and business case
• Quickly implementing improvements and adjustments
• Re-evaluating outsource versus in-house decision based on industry and business changes and lessons learned
• Evaluating feasibility of additional outsourcing

Quality Management
Quality is a huge concern with offshore outsourcing. Defects are more costly to fix than requirement problems. A strict quality assurance and control program forms an integral part of every offshore delivery model. Offshore projects and delivery centers are assessed using different methodologies:

• SEI-CMM - a CMM (Capability Maturity Model) assessment that measures the quality of an organization's management and software engineering practices.
  
• P-CMM - the people certification from the Software Engineering Institute of Carnegie Mellon University.
  
• ISO 9001-2000 certification - an international standard for quality management systems maintained by the International Organization of Standardization.
  
• Six Sigma improvement methodologies.

Performance management involves, among other things, a review and continuous improvement of software development and business processes, validation and verification of work products, regular internal and external quality audits, and customized status reports.

For additional information on project management and the project management methodology, please see chapter 9 of Offshore Outsourcing: Business Models, ROI and Best Practices.