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Project Management: Benefits of Outsourcing

Project Management: Benefits of Outsourcing
April 18, 2023

2023 presents unprecedented challenges for Australian and New Zealand businesses faced with ongoing economic and supply chain challenges brought about by Covid 19, as well as natural disasters that have seen many in our business community begin the new year in clean-up mode.

As ever these challenges focus businesses to work smarter and leaner. At TEG Projects, after 18 years in the industry we’ve seen first hand the financial benefits of using external resource to help deliver your capital plan. In this blog we discuss these as well as other key benefits of using external resource for delivering capital projects in 2023.

Why use external resource to supplement your in-house project teams?

When businesses experience increasing capital investment, frequently the organisations fail to deliver the capital plan. This failure to fully execute the capital plan means that cost reduction projects are not completed in the required timeframes negatively impacting company financial budgets and results. Furthermore, good justifiable projects that would improve safety, GMP and efficiency are not delivered meaning that the benefits available from the projects are also delayed.

The answer to why the capital plans are not being delivered is simple – a lack of resources. A lack of in-house resource means that projects cannot be scoped, planned, approved and implemented quickly enough to meet the business expectations. The small in-house project team that was adequate at a lower level of capital spend is quickly overwhelmed with projects and becomes a bottleneck in project delivery. Businesses are naturally reluctant to build larger teams of project engineers and project managers knowing that their project load goes up and down over the business cycle. Hiring 100% in-house resource means that when capital budgets drop there is excess resource requiring disruptive restructuring and redundancy. Our clients find that by having a small in-house project team, supplemented by external project managers seconded into their organisation, gives them the flexibility and cost effectiveness that they require while keeping control of how the projects are delivered.

Project management in the food manufacturing industry

TEG Projects is a specialist provider of project management and project engineering resource in the food and beverage industry. Our team of experienced food industry engineers and project managers deliver projects across a wide range of expertise including Dairy, Meat & Poultry, FMCG, Beverages, Building, Sustainability and more. TEG project managers are seconded into our clients organisation becoming part of their capital projects team and they enable clients to leverage their compact project team across a much larger portfolio of projects.

Our engineers and project managers have many years of experience in selecting, appointing, and managing food and beverage equipment suppliers, as well as specialist expertise on multi-disciplinary projects, including civil, structural, electrical and automation and design specialists.

What are the benefits of outsourcing your project management?

The key benefits to outsourcing project management are an ability to quickly ramp up and ramp down resource when capital plans require, without the necessity to hire and fire project personnel. It allows companies to reduce costs and stay nimble in an otherwise unfavorable environment. External project management costs can be capitalised meaning that growing the capital projects team does not impact the company bottom line. In fact business financial results are normally improved by the execution of cost-reduction projects that would otherwise be delayed.

Reduced Cost
Outsourcing project management can help a business reduce operating costs by maintaining resources at a LEAN level, maximising value while minimising waste.

A skilled external project manager will be able to foresee likely challenges and will therefore be able to lower capital expenditure through scope challenging and value engineering. They’ll also be able to clearly communicate with your team through forecasting and reporting. And will be able to bring their extensive experience into play with project budgeting, scheduling, and safety performance. It is this insight and planning that not only brings about cost benefits, but also ensures a good outcome at the completion of the project.

Added to this project specific reduction in costs, is that outsourcing as opposed to in-house recruiting will not incur recruitment and training costs for new staff. This is an extra expense that many businesses do not take into consideration when budgeting for in-house project management.

Remain flexible and nimble in a difficult environment
Outsourcing allows a business to complete projects, without the expense and time investment of employing and onboarding new staff, reducing in-house recruitment, training, HR and redundancy costs. Outsourcing allows for flexibility, scaleability and responsiveness, by engaging with an experienced outsourced project management team for the time required/length of the project and matching resources to capital budget requirements.

Access best-in-class project delivery at competitive rates
Outsourcing allows your business to engage with experts, and avoids the need for inhouse training. You can rely on the expert advice of someone who works across the food industry on large and small projects on a day-to-day basis, and who has developed both the skills and contacts to make every project a success. An expert project management team can work across a range of environments to deliver projects. At TEG Projects we specialise in all areas of the food and beverage processing sectors.

What does external project management resource actually involve for my in-house team?
External project managers partner with your in-house team. Our approach sees the TEG Project Managers based on your site, integrated into your organisation and operating alongside your in-house engineering and management teams. These are long term relationships spanning anything from a few months to several years. Such as when we worked with Fonterra on their Waitoa Water Treatment Plant, or when we worked with George Weston Foods to achieve greater efficiencies and greatly improved GMP in their pie manufacturing plant.

Thinking about needing external resource to help you deliver your capital plan?

With 18 years experience in the Australian and New Zealand food manufacturing sector TEG Projects is an expert choice for providing food industry experienced Project Managers to help deliver your capital plan. We have the expertise and knowledge to help make your project a success.

Reach out to the TEG Projects team today.