ExxonMobil Outsourcing and Product Life Cycle

Assignment # 5
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ExxonMobil Case study
The success of a project is determined by factors such as scope, timing, cost and quality. Organizations speed up a project by spending more on extra personnel and overtime. Similarly, others always skimp on scope or quality to reduce cost or accelerate timing. The project manager has to jungle the determinants of success. However, some projects fail because organizations focus on why projects are over budget or late. Though research indicates that failures in scope and quality seem to have similar root causes. This section discusses ExxonMobil outsourcing and product life cycle.
Outsourcing and product life cycle
ExxonMobil organization certainly engages in the outsourcing of products and services. The organization uses an outsourcing strategy to stay ahead of the competition and exert efficiency in its operations. The idea of outsourcing is helpful to the organization maximization of profits, reducing losses and in the provision of quality gas and oil products and services. ExxonMobil outsourcing strategy is executed within the acceptable frameworks such as outsourcing from credible providers, allowing competitive bidding, benchmarking with diverse firms in the industry and beyond and auditing the business processes (Esima & Wordu, 2019). Historically, the organization started off by outsourcing supportive activities such as Information Technology (IT) services and cleaning services. Today the organization outsources primary functions also identified as core competencies.
Esima & Wordu (2019) claims that ExxonMobil has settled in an established owner role and entrusted diverse activities to service organizations who have assumed greater responsibility. The service companies are the executing party in the creation of an oil well producer. The organization also hires seismic vessels to establish potential reservoirs through hiring rigs with personnel and equipment from drilling companies, renting, and personnel to complete the wells and buying of completion equipment as well as renting intervention vessels with specialized and equipment intervention personnel from service companies that are identifiable with specialized competence. This has impacted on the change of core competencies process. ExxonMobil has embraced the strategy of outsourcing also to save on costs.
Product life cycle
Clearly, the organization ability to outsource at an early stage of the product cycle and internal development during the later years of the cycle helps the organization in securing an advantageous market edge (Krzus & Tomlinson,2019).The organization practices vertical integration that is linked with both benefits and costs that diverse performance margins reflect the tradeoffs linked with alternative contracting modes. Therefore outsourcing is linked with higher levels of initial performance while vertical integration is associated with high-performance improvement rates over the product lifecycle.
Project success
ExxonMobil successfully manages the root cause of its project failures. The organization ensures that there is a good scope control, sufficient front-end planning, maintaining low turnover rates, ideal technology and ...