What’s the dissimilarity between a project within the budget and on time and one that goes through chronically missed deadlines, drama, and cost overruns? Magnificently executed project procurement management.

When an organization fosters a properly oiled project process that ensures resources have been sourced and are available when required, the corporate bottom line benefits. In the Supply Chain Resilience Survey, conducted last year, Quickbase observed that nearly 80% of companies deem supply chains extremely important to their company.

Hence, how do great organizations manage their Procurement successfully? In the following article, we will explain how promising project procurement has to begin with a plan and how you could enhance the procedure at your organization by securing resources properly and managing them via a project’s completion.

The topics covered in this article are:

  • Project Procurement Management – Meaning
  • Project Procurement Management – Importance 
  • What will Project Procurement Management contain?
  • Four main techniques of Project Procurement Management
  • Procurement and Project Managers
  • Will Software Help the Project Managers with the Project Management Procurement?
  • FAQs

Project Procurement Management – Meaning

Project procurement is a method of sourcing goods, supplies, and services. Unfortunately, those crucial items will not handle themselves. Most projects—especially fast-paced ones—want to be cajoled, finessed, and wrangled into budget constraints and strict timelines. This is where your “management” factor comes in. 

The two major phases are explained below:

1. The Procurement Plan

While organizations might have various strategies for compiling this information, the inputs are more or less identical and are generally enshrined in the Project Management Plan. It consists of:

  • Services and materials needed and their specifications.
  • The criteria, timing, and format for requests for ideas, as well as the processes to assess such ideas, are also discussed.
  • Determination of what has to be bought and what may be leased from another organization or reassigned from the organization’s current projects, plus data on preferred suppliers.
  • Finding contract types, whether reimbursable cost contracts, fixed price contracts, or others.
  • The contract requirements for outdoor purchases include particular product names, minimum specifications, or other information given to the specific project manager to adhere to.
  • Delivery dates and milestones established.
  • Programs or legal conditions, such as green building programs such as LEED or Environmental, Social, and Governance (ESG) reporting, must be followed.
  • Regulations of the path for change proposals and documentation from dealers are needed.
  • “Plan Bs” for services and products that are not on time, unavailable, or canceled.
  • Procurement contracts have to adhere to organizational risk tolerance and dovetail planning with global risk management plans.

2. The Procurement Execution

While proper plan-making for project procurement has been an essential first step, it directs into an equally vital phase: the real procurement execution has usually been via a project manager.

At this level within the method, vendor contract terms have been agreed upon, RFPs have been released, and products and various other resources have been chosen. Similarly, payment for rentals/services and materials is due.

Later, the procurement team has to monitor and manage the project procurements. This requires strict control of the project’s progress through updates from the vendors, quality control reviews on the services, products, and work that will be delivered, and navigating cost overages, timeline delays, or change orders.

Project Procurement Management – Importance 

Project Procurement Management is vital because there has to be only one source of reality for the pieces, parts, and people concerned with completing any project and getting it out of the planning board–whether that project is a municipal building project, a new home, or a commercial high-rise.

Maintaining a strong, replicable method will assist a project team in integrating the facts of every new project the organization produces. In broad, the vital components of the management plan comprise setting measurable objectives, keeping all project team members apprised of the evolving requirements and project status, and mitigating risks—outside and inside the business enterprise.

What will Project Procurement Management contain?

Each procurement management plan will have a single objective: Get precise on the requirements and goals, after which make certain the project management system is figured out by all the participants and followed to the smallest aspect.

During this process, any disciplined project manager would constantly watch over the project as schedule, quality, or budget transitions could send the job right into a freefall. A seasoned manager could possess contingency plans for any lure in a job.

Below is the most important problems included in the process of project management:

  • Project scope: A key area for addressing early in the project, the scope will be the project’s objective and the goals it has to achieve (e.g., erecting a skyscraper, building a park, completing a bridge, etc.).
  • Project schedule: A missed deadline frequently equates with a terrible project performance, although the ultimate project has been a success. The project manager has to create a reasonable and accurate schedule at the project’s onset. This timeline ought to be watched over by all the members to ensure it is attainable.
  • Project costs: These include the expenses and budget and the general outpouring of money into and out of the project. They additionally include slotting in donations, grant money, or various other funds.
  • Resources: Services, consulting, products, materials, and people … a whirling list of resources is important for any successful project, and they all must be cautiously chosen and supervised.
  • Quality: This area has been established at the planning stage and will address the standards up to which the current project can be built, comprising the quality of all the services, products, and materials of the source. That is usually managed via the quality assurance associate of the project group.
  • Risk: Risks will be specified at the commencement of the project and cope with the events that might cause negative influences on the procedure and the final product. A promising project manager will usually have plans to mitigate threats and deal with issues that ought to arise.

Another method of examining procurement activities is to use the “triple constraint” premise. This particular project management axiom has three components: time, scope, and cost.

When you consider those inputs, you can determine the project’s goals and the connection between them: If the time frame is modified, costs might rise; if the scope drops, the schedule may be cut short, and so on. Monitoring those three areas and looking at them as a rigid integrated system could help the project stay on the right track.

Four main techniques of Project Procurement Management

Consider project procurement management as four different processes:

1. Planning

It includes the creation of the ironclad management plan. It consists of gathering all of the materials related to schedule, costs, resources, quality, and scope, among other considerations. The main point of this phase will be to obtain all the requirements and information in a single place and develop a plan to carry out the work. Organizations use manual methods to create and control this information, or, as part of the particular planning phase, they will use the technology to help develop the workflow.

2. Selection

Throughout this phase, the entire management team analogizes bids and demands for the proposal submissions from the potential vendors, conducts the vendor negotiations, rebids components of work if required, evaluates the competency of the vendor candidates, makes a decision, and awards the contracts, and creates workflows and calendars to join all of the information into a single place that is obtainable by the whole team.

3. Administration

The administration phase drills down at the processes and tools required to control the plan from the beginning to the end. As the name indicates, administrative responsibilities have been revised during this period. All of the paperwork, consisting of cost-reimbursable information, procurement contracts, project schedules, spreadsheets, contractor agreements, fixed price contracts, change orders, and others, should be cautiously courted through the procedure by that management team. Most organizations depend upon a centralized system for keeping track of that influx of vital information, now not just to support the project running efficiently but also to offer correct information for inspections, audits, reviews, and third-party programs or certifications.

4. Closing

The closing phase of any undertaking will not be to sweep, switch off the lamps, and then wind up. It concerns a carefully estimated assessment of the method. This is typically accomplished using performance metrics or audits, which score any project and provide a rich trove of beneficial data for the upcoming project. Frequently, organizations use software that sets up reports that they could then use in a retrospective meeting.

Procurement and Project Managers: The Role of Project Managers in the process of Procurement

The project management team, always led by the project manager, is responsible for the particular procurement management program and even its implementation. To put it another way, this pro will bring the entire team together.

The project manager has to conduct procurements using a system that knows the project’s needs, organizes procurement documents, manages the budget, and tracks the project schedule, risk assessment, and quality, among other responsibilities.

Can Software Help the Project Managers with the Project Management Procurement?

In today’s hectic project management arena, business-savvy software will be imperative. For instance, check out Quickbase’s project management software. With that, you will get broad clarity on ongoing project management initiatives’ schedules, processes, performance, and status. This offers unfettered access to each factor of your project. It will allow you to spot problems in time to resolve them.

Quickbase gathers all your data and information in a single place so that you can handle it more precisely and gain insights into the project’s completion, which could benefit your upcoming project. When executing the project, you can share project requirements, photos, files, and other data that will assist the team members in performing better.

Teams benefit from that kind of technology since it offers beneficial features like automated reports, interactive dashboards, and the capability to assign permissions and roles.

Conclusion 

Highly performing procurement management teams are essential for any work to succeed. When project team members are provided with realistic requirements, strategic plans, robust technology, and sufficient planning time, they transform into front-line representatives from the organization’s back-office workers. That means your managers could spend more time growing new relationships, getting to know your business first-hand, and presenting insights into revolutionary ideas for upcoming projects.

FAQs

  • What is the meaning of project procurement management?

Project procurement is the use of resources, technologies, strategies, and tools to address a project’s needs and manage it from beginning to end while maintaining profitability. It is generally handled by the project manager.

  • What are the four most important processes of any project procurement management?

Planning, selection, administration, and closing are the four primary processes for handling procurement work.

  • What does the project procurement management consist of?

Managing a procurement project will generally include scope, schedule, resources, cost, quality, and threat. Projects could vary widely; however, the exceptional way to run any successful project will be to spend time on the strategy planning stage concentrating on areas that guarantee success.

  • What are the traits project managers should have to prevail in procurement projects?

A successful procurement employee needs to have primary expertise in operating procurements, hold a hold on the technical elements of the work being conducted, know the requirements of the contract, and have a leading overall performance record. You don’t need a master’s degree to achieve success at this sort of job; however, a proven track record of outstanding work performed, multi-tasking, and managing contracts is a plus.