Construction: To outsource or not to outsource?

Mr Mayur's argument signals positive aspect of big project. For a big project ,times lines and degree of correctness are standard charter.

Outsourcing is inevitable sepcially for developers.

The project is not all about outsourcing only, it has many components/aspect that has to be looked upon & agreed.

Time, cost & resources are the key to the success or failure of any project.

Any developer that needs to deliver project on time within stipulated budget must plan to outsource few or many task to the professionals in order to meet above criteria.

Outsourcing is required to curtail additional over heads plus it gives professional edge along on various technical verticals.

efficient management system will help in outsourcing in construction industry

yes if any project is divided into the modules and the same is executed accordingly than outsourcing may be good idea in construction industry also

not opposing but want to say if the work load is divided into different modules and execute same accordingly than outsourcing in construction industry will be a good idea

it depends on planning people who will plan the project in different modules such as line out, excavation,foundation etc as this can be made in seperate modules and worked upon yes but there must be central management team

Hi durgarao, the builders will outsource only after knowing what to do. Because without knowing the process one cannot outsource the project. The main purpose of outsourcing is to cut-cost and do it more fast and effectively. So when the cost of the project seems to reduce why should we go for outsourcing.

Thanks......

The developer shud look out for a competive contractor and enter into EPC contract keeping all the approvals in his hands and Design and execution in the contractor's basket for which developer can also bear a bit more cost which will reward him more in future or at sales.So in this way the developer keeps a check on the design and execution and the materials used in the construction activities.

Outsourcing depends mainly on the type of project and time of completion. There is no doubt that some of the work be outsourced so the best available talent could could be put for best results.Also the out sourcing will help in saving cost /time but all these things depend on the size of project. Cutting time means saving money hence in my view  out souring is a positive step.

Prem Goyal Managing Partner-R-TECH BUILDERS-148023 

As a coin has to faces this topic can also be discussed on the same track. In today's world where perfection is required at every stage and part of project one needs to have all the skills. Its a interesting fact that one can be a leader in all areas but at the same time overheads will increase for example L&T. But if some one want a cost effective method then it is better to outsource and get he thing done, thereby employing certain employees for management.

The concept of oursourcing has emerged immeditely after the independence. Earlier, the promotor or th developer or the government used to procure the materials and hire the manpower on daily basis (Muster Roll System ) and execute the  projects.

But after that, due to ineffective administrative systems, corruption, inconsistency in deliverables of the employees, the concept of oursourcing has come up in civil engineering industry. consider PWD, Higyways or any government department, private companies, they could execute the projects only by outsourcing.

To ease the process of outsourcing, the concept of PMC has come. The Project Management Consultancy which is acting as a nodal agency on behalf of the client in coordinating the Architects, Design Consultants, The vendors and the Client.

So, the civil engineering or any industry can not sustain with out outsourcing. Consider the auotmobile industry, they do not manufacture all the parts, they only assemble - more than 50% of parts are outsourced for manufacturing. See the manufacturing units of computers, they act only as the assemblers rest are outsourced.

The premier developers who have been doing their business by their own also have cut short the staff strength in the recent finance crunch and had gone for out sourcing.

So, I support the concept of out sourcing

out sorucing is the best option in the field of the all the activity of the construction as i help to matian an additional advantage for the progress of the work, and with elxlent work man ship with good quality can be achived as the out sorucing is allways give there best as to grab the feauter offer from there patner are the sub client.

Dear Mr.Prashanta Bhaumik,

I do not agree with your opinion, as it is like saying “an employee should stick to his starting salary for years since he has gained knowledge and experience at company’s cost” if there is a competition one has to choose freely instead of shutting the doors on outsourcing.

By the way does their any company exist on earth which does all the works without outsourcing?

How do you get this checks and balances on the owner's plate or owners' desk without a godd information management system i mean well configured Construction ERP? My view Owner decides a contractor on the basis parformance rating of the builder including his/her Subcontract management capability. which again looks for good subcontract mangement system a part of (ERP?) Information system..

If you do not expertise in some item of work under your project obvoiusly you will hire a outsourcer with knowledge in the field. THis is not outsourcing per say it is subcontracting for specialise dwork

Out sourcing execution partners is inevitable for a company having minimum or no infrastructure, further they reduce liability on investments and maintenance on equipments machinery and staff. More specific the job better monitoring and controlling of task, inviting the entrepreneurs and growing together would be like, live and let live.

As far as the technical and management partners are concerned, unless the company has the root of expertise with experienced technical team it cannot afford to venture into the projects without outsourcing. However, by outsourcing the technical experts one can demand value engineering.

Outsourcing is a relative term and it depends on what you outsource. Inhouse infrastructure can be helpfull in the case where you do typical works and you have strong technical side in the top management. If any organisation that is promoted by non technical people, then outsoucing is the only answer. Thus, leaving the top management free for other sides of management like marketing, financial management etc. However, total inhouse facilities are not advisible because then there is no independent thinking. Everyone is prejudiced in some way or the other. Hence, design part can be outsourced, while execution and management can be done inhouse. However, if there is no strong technical representation in the management then even execution and construction management should also be outsourced. 

Looking at the bigger picture, Outsourcing is the need of the hour inorder to develop a pool of specialists.

Except for some top players in the industry, most of the builders do not have specific expertise across the process of development. When these entities do not outsource work and start doing things inhouse , definately they are on the path of gradually training themselves but at the cost of the quality of the product.

I think that out sourcing is a need of the times for big projects for which quality and project management are of vital importance. It is not realistic to expect all builders to have every capabilities in house.

However, for outsourcing to work, the co ordination and communication and drawing / document standards have to be clear and proper. So I feel that the current trend towards outsourcing will help create better standards of drawing and documentation in India.  

First of all, why do companies outsource some or all of their activities? Companies outsource weak business areas and concentrate on strong. In a backward integrated model, there is hardly any need for outsourcing as most of the activities are directly undertaken. If Companies are to outsource all of its activities then what is the role of the brand? Yes, construction companies may need to outsource some of its activities. For example, those that involve high Infrastructural Investments, professional expertise etc.. Construction being a highly sophisticated area, core activities that are outsourced need more overseeing also.

Out sourcing is convinent & also brings new ideas, technologies & logic. A builder cannot have all the ideas. One must be open to invite expertise from outside to grow. outsorcing is the right choice.

With rider that the responsibillty will be squarely on builder.The builder has to evolve a comprehensive system of checks and balances to watch  over the construction activities.

yes outsourcing can be considering the project size .expenses /budgets etc..

I believe involving specific parties for specific jobs will bring in a lot more experience to the team and this will help the project. Although the parties should not be so much (in terms of numbers) that co-ordinating among them becomes an issue.

Keep it short, precise but dont cut people who are really required.

In the interest of the project out sourcing is not a bad alternate for an efficient and quality work out sourcing is good because we can handle the project more conveniently ensuring all  areas to be under control eg cost,quality, time frame, everything if done by own may be a little bit cheaper but not economical

main areas of out sourcing should be

a Soil testing

b structural designs and drawings

c.. executing contractor agency

d Pest control

e supervision

f Landscapping

The builder or promoter if look into all these outsourcing and get in touch with them can ensure the completion of the project timely and efficiently. the main ares to look into by him are funds management entering in the agreements with out sourcing agencies specifications being provided overall progress and services management like power water and municipal, administrative  activities are lot works to be dealt by the promoter

out sourcing is a better option. but it needs more effective and efficient management to handle number of agencies and to deliver projects. each agency brings in its own core expertise which can be very beneficial for quality , quantity and time factors. the owner should have an good management team which can co-ordinate with number of sub-contractors.

also it is not possible to have many speciality areas in-house.

According to me developers who opt to do everything themselves are usually construction companies that have moved into the property development business. The o­nly risk they run is in relation to the subcontractors.  In the mixed option of outsourcing part of the construction work, the developer enters into several contracts involving economic risk: o­ne with the prime contractor who carries out the main package of construction work and others with the subcontractors that have been selected by either the prime contractor or the developer to carry out other processes. In this scenario, the developer's experience in managing works contracts is crucially important.  So it will be better if Some of the work is Outsourced to others which will really help according to me. What do you think guys?