It’s now PMO to join the outsourcing bandwagon

By : |April 18, 2006 0

Pragati Simlote

NEW DELHI: In order to gain operational efficiency and slash costs, companies
are increasingly looking at outsourcing their non-core functions to a third
party. This enables them to concentrate on their core competency and leave the
rest to others. With outsourcing becoming the preferred way of doing business,
can project
be left behind?

More and more companies are working on multiple projects now and these projects
may be happening all over the country or the world. Instead of just one or two
people handling the project management, companies are now setting up dedicated
project management offices – just like small business units within the firms.
The latest trend is that companies have started outsourcing non-core functions
in project management like reports, data collection, project collaboration, etc.

Life cycle solution provider KLG
is betting big on the project management outsourcing (PMO) space. As
a concept, PMO entails capturing one or two ongoing projects in a company,
setting up the infrastructure and data center and once the system has settled
down then outsource people to the company who will run the project on a
day-to-day basis.

Explaining the concept, KLG Systel CEO Mukesh Arora said, “For instance, if a
company’s project management office has seven-eight people, it would put
two-three of its own employees who understand the company’s business and hire
the rest from companies like us. Our job role entails setting up of the project
management backbone for the company and maintaining infrastructure on a
day-to-day basis. We also feed them with project progress by collecting
information on the project process from everywhere, reporting it, analyzing it
and presenting it back to the customer.”

Currently, close to 50 people are doing project management across India for KLG
. The company has five PMO clients and sees a lot of work coming in
from the global market as many Indian companies are working for large

PMO as a revenue stream is shooting up for KLG. Arora said, “This is already a
huge revenue stream for KLG and the way infrastructure is booming in India we
hope to sustain the growth momentum achieved in the last two years. Most of our
large enterprise deals, which have come in are coming in with at least 15-20 per
cent service component.”

He added, “Lot of companies have started coming to us now — sometimes for
six months, sometimes for a year, etc. Our people are posted in these companies
and are part of their IT team and ensure that the systems are up and running.
ONGC has adopted it in part; Reliance is opting for PMO for its Jamnagar
refinery. Government and large corporate are asking us to give manpower for
long-term contracts. We have commitment to give five people to the Railways on
one project for one year and another project for two years. So this is becoming
a common model.”

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