When To Outsource Project Management

One of the most common dilemmas facing founders and C-level executives searching is how to pair Project Management with an offshore development team. Many mature service providers offer comprehensive solutions, including Project Management. However, some clients prefer to collaborate with an in-house, domestic Project Manager, while outsourcing the software development. Both approaches have their pros and cons. This article will show you when you should think about using an in-house Project Manager, and when to Outsource Project Management. 

The Problem

A couple of months ago I received an interesting RFP from a San Francisco-based founder aiming to build a web application for the logistics industry. We spent a lot of time performing an early stage product discovery process and estimating the expected cost of the multi-functional web app.

After a few weeks of discussing the software project, the founder informed me that he picked another software house. I was disappointed, but let’s be honest – that’s just part of the business. However, his explanation made me think. He said,  “In the end, the deciding factor is that they have both a local project management presence (which increases my comfort with the overhead required to manage the project) combined with overseas resources at a lower hourly cost.”

Considering all of our conversations, I knew that cost wasn’t really a driving factor in his decision. We had several Skype calls taking place at early morning hours (late afternoons in Poland) because of the 9 hours overlap difference, so I knew that distance and time differences might be obstacles, but I believed that we’d make a deal because we have great references and an excellent portfolio. So I started to think about how the client made this decision. Ultimately, I determined it really comes down to the details of the project. Before we get into that, let’s look at the pros and cons of each style.

What Is The Difference?

To dig into this issue in greater detail, I asked for Project Managers I know for some thoughts about the benefits, drawbacks, and differences between the two types of project management. Here is what they said:

Outsource Project Managers (PMs work in same office as the developers)

  1. A Project Manager working directly with the software team can validate the team’s efforts and see progress first hand.  They can take advantage of direct access to the individuals building the software to influence their behavior. 
  2. Many software developers have are relatively introverted. Direct communication with these types of personalities can be very beneficial and sustain productive work. 
  3. Project Managers working closely with the team can become a moderator (like a Scrum Master) for the team.  This can be really helpful when navigating conversations between engineers and designers. Eliminating this friction makes sprints more effective, and gets projects done faster.

Keep Project Managers In-House (PMs works in same office as client)

  1. Similar/same time zone, which sustains better communication between the client and the Project Manager. This can help very hands-on clients who want to oversee a lot of details of the product development.
  2. Eliminating culture gaps helps ensure the client and the Project Manager are working under the same expectations, standards, and work conditions.
  3. Face-to-face meetings and brainstorming can lead to greater creativity in the product ideation phases of projects.

Client Comfort vs. Team Efficiency

To me, it all really comes down to whether the client wants. Do they want more control of the details of a project, (comfort) or do they want an efficient project? As we all know, managing a team remotely is a very challenging task. This is why I’ve often advocated for outsourcing development and project management together. You have all the internal systems in place already. A client-based Project Manager will have to manage the software team remotely. 

As Patrice Embry says, “An advantage of working in an office with your teammates is the ability to see when they’re in the office, at their desk, and what they appear to be working on. As a PM, you want to be sure your work is getting done so there’ll be no surprises when a deadline is looming.When you’re a remote project manager, checking in on progress can feel a lot like babysitting, and no professional person appreciates that. It is possible though! A good tactic I employ is asking engineers to keep me informed on completion percentages of long-term tasks. I also make sure to only ask my teammates for updates when I know I’ll be reporting to stakeholders. This way, they know I’m just doing my job and not harping on them.”

Simply put, having a Project Manager working in the same country as the development team provides significant benefits. These include: eliminating cultural gaps, language, and the simple efficiency of proximity. In many ways, it is just makes sense for coworkers the person managing developers, to be in the same office as the developers. This can lead to greater team unity and economies of scale. 

However, there is a flip side to this. Sometimes, it is more important for the Project Manager to be close to stakeholders. For example, a company in the United States with an owner who is very involved in product decision. In this case it can be better for the Project Manager to be in-house.  The Project Manager being in the office with the client can better understand the needs of the owner. This can lead to greater client comfort and long-term trust.

Should I Outsource Project Management?

As we can see, both models have their advantages and disadvantages.

SourceSeek CEO and Founder Dave Hecker has said, “On the client side, there is one critical factor that makes remote PM’s succeed or fail. It’s the skill and effort of the client’s point of contact. There must be one person on the client-side who is tasked with being the key communicator and overseeing the details on a day-to-day basis. Without this, most outsourced software projects will fail whether Project Managers are outsourced or not. With the right person as point-of-contact, there is no reason a remote Project Manager can’t be successful.”

Responsible clients should consider both options while choosing a suitable software outsourcing company. There are several factors that can help you make the right decision.

For example, if you are looking for a one-stop shop (a team with expanded UX competencies and mature Product Discovery procedures), it’s better to pick a software provider combining these skills under one roof; in that kind of project there is a strong need for subtlety and understanding, which are hard to display over a Slack chat. These teams have experience building products together from beginning to end, and will work best when kept as an in-tact team. 

In a situation where you are seeking team augmentation, or if you are a client who wants to be involved in the product details every single day, both models can be very efficient. This is especially true when the Project Manager has experience managing software remotely.


As we can see, both configurations are suitable depending on the type of work. Therefore picking a specific model should depend on the project scope and current resources. If you want a more efficient team, you should think about hiring a software team and Project Manager together. If you are looking for more control, keep it in-house.

Michał Lisewski

Business Lead at Merix Studio
For almost two years I have been supporting business operations at Merixstudio, recognized as a Top Quality Outsourcing Company according to Clutch.co. My aim is to connect creatives, founders and entrepreneurs with our talented team in order to deliver best services. With a humanistic background, I’m a fan of classic literature, social science and soccer.

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