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 Managing Hidden Project Costs for Better ROI | PM Tools - PM Tools

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Managing Hidden Project Costs for Better ROI

By ExecutiveBrief Staff

The most common argument for outsourcing is cost-savings. And in the face of a challenging economic climate, cost figures largely in the decision for outsourcing IT projects and business processes. While cost-effectiveness is a huge deciding factor for offshoring, cheaper labor and service rates should not be the only measures of possible financial success of a project. In fact, long-term benefits are extracted from the industry expertise of vendors that could make up for the investments in communication, time zone overlaps, and travel.

Dr. John Sullivan, a human resources management expert, advises that metrics and measures should be identified right after selecting the vendor. A competitive business environment typically requires higher return on investment, and there is nothing more that CFOs look for in any outsourcing venture or project than a positive ROI. While projects have measurable ROIs, such as quality control and supply chain, there are aspects that remain in the gray areas. To properly measure–and control–a project metrics, there are certain considerations outside the scope of usual reports when an audit for return on investment comes around. Sure, a project manager can assign numbers to productive hours, headcounts, and quality, but how does one factor in hidden costs, such as trainings, project changes, and communication, among others?

 

ExecutiveBrief, the technology management resource for business leaders, offers articles loaded with proven tips, techniques, and action plans that companies can use to better manage people, processes and tools – the keys to improving their business performance.
For more information visit us at: http://www.executivebrief.com.
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