Procurement Management – The Basics

basics of procurement management - Procurement Management - The Basics

Procurement Management is one such knowledge area that stands out from others. The biggest reason being the fact that many Project Managers have no experience with it. If you manage software projects and everything is developed in-house, chances are, you have never done any kind of procurement.

If you fall in the same category, consider this example – Let’s say the project you are managing is just too big for your organization. It is also possible that a certain part of the project requires a special skill or expertise that you don’t possess. This is when you need to use Procurement Management to hire another company to accomplish the project work.

Two very important points to note here are,

  1. Process of hiring another company is called procurement
  2. ‘Another company’ is called seller

At some point during your study of Procurement Management, you might realize that this entire thing is not your forte. You are not a part of the legal or purchase department, you are a Project Manager. As a Project Manager, should you be involved in procurement?

The answer is yes. End of the day it is your project. You are accountable for it. Even if some other company is selling you a product or a service, the success of your project depends on it. So if they fail to deliver, your project doesn’t succeed either.

The processes of Procurement Management are necessary to purchase or acquire the products, services or results needed from outside the project team. Below is the PG-KA mapping,

procurement management process group knowledge area mapping - Procurement Management - The Basics

There used to be a Close Procurements process in PMBOK 5 which was removed in PMBOK 6

Plan Procurement Management

This is the process of documenting project purchasing decision, specifying the approach and identifying potential sellers

Conduct Procurements

This is the process of obtaining seller responses, selecting a seller and awarding a contract

Control Procurements

This is the process of managing procurement relationships, monitoring contract performance and making changes and corrections as needed

Check more articles on Procurement Management

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