As we initiate our projects, we may find that our organization lacks the skills and knowledge to create the project deliverables and meet the project objectives. In other cases, we may need products outside of our organization. Project managers use procurement management to secure these needed products and services.
The Project Management Body of Knowledge (PMBOK) says that Project Procurement Management “includes the processes necessary to purchase or acquire products, services, or results needed from outside the project team.” Our ability to find and procure the right resources at the right time will enhance our chance for success.
So, how can we improve our project procurements? Start by developing a Procurement Management Plan. The plan describes your approach to acquiring the necessary products and services from outside organizations. This plan may include things such as:
Next, conduct the procurements. That is to say, obtain the seller responses, select a seller, and award a contract. Imagine that your organization—a property and casualty insurance carrier—has undertaken a program to replace the legacy systems with a modern suite of insurance applications including the policy administration, claims, and billing. You could take the following steps:
Furthermore, control the procurements. Per the terms of the agreement, the buyer and the seller work together to meet the procurement requirements. Project managers must be diligent in this process. Otherwise, dates may be missed and issues may surface.
Lastly, close the procurements. It is easy to overlook the final procurement activities when a project comes to a close. Here we:
Often times the procurements are handled by an individual or group other than the project manager. It is best that the project manager is engaged in the procurement processes, even if they are not responsible for conducting the procurements. The project manager can help identify, evaluate, respond to, and control the project risks of using the outside products and services.
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