The most extreme position taken by one of our Editorial Advisory Board members (Ami Givertz) was that the only HR function that shouldn’t be outsourced is the function that chooses outsourcing partners. In this view, HR becomes a Program Management Office that manages the series of subcontracts for the HR services that the organization consumes. It’s more like an extension of the purchasing department with HR expertise. Program Management is different than project management.
The very interesting possibility is that by turning HR into an Acquisition oriented operation, it’s possible to unleash its strategic weight. With execution details delegated to performance oriented contracts, the HRPMO is free to optimize the blend and direction of its services. Standing above the fray, powerful ROIs can be generated where once there was a cloud of chaos and urgency.
Program Management is a time-honored approach to the management and execution of complex relationships. It was first deployed in the Defense Industry and then honed to a science in NASA programs. Implicit in the PMO approach is the idea that the relationship between a Program Office and its subcontractors is complementary to the accountability required to make things work. You can not treat a subcontractor the way that you treat a subordinate.
Theoretically, a PMO works in five key areas (according to IBM):
- Governance: Defining roles and responsibilities, and providing oversight
- Management: Planning and administering both projects and the overall program
- Financial management: Implementation of specific fiscal practices and controls
- Infrastructure: The program office, technology, and other factors in the work environment supporting the program effort
- Planning: Activities that take place at multiple levels, with different goals. The program plan is not a traditional plan
What is most illuminating about this simple suggestion is that it showcases the major skill deficits in most HR shops.
For the most part, the PMO approach is unknown in HR Departments. The core skills seem unnecessary to people who are trying to get the tactical requirements met. A PMO requires a kind of discipline in the generation of requirements, the description of problems and the vision for the organization that is often otherwise unavailable.
Rusty Rueff notes that outsourcing organizations (RPOs in particular) have matured into technical and execution powerhouses over the past 15 years. Each generation of downsizing produces better and better outsourcing, he says.
The management of excellent subcontract providers requires excellence in the team that manages them. We expect that you will see the idea of an HRPMO increasingly as the function takes its proper role in the management chain.