PMOs set up preferred supplier relationships, negotiate
contracts, assess overall performance, define best
practices, and disseminate learning. This best practice
is not unique to offshore sourcing. The issue here is
whether CIOs should create a separate program management
office for offshore, such as Biotech did, or
whether to integrate offshore into an existing PMO.
Participants suggested that CIOs should create a separate
office if the offshore initiative represents a significant
departure from domestic outsourcing practices
or they intend to create a captive center or joint partnership
that will require dedicated management. CIOs
should create an integrated PMO if they want business
requirements to drive the supplier selection and if they
want the onshore and offshore suppliers to compete
aggressively. Retail, a Fortune 100 company, used
competition managed by the integrated PMO to cut
the domestic supplier rates by 20% to 50%.