2.11 Plan and Manage Procurement

Process - Plan and Manage Procurement

Enablers

IdEnabler
2.11.1Define resource requirements and needs
2.11.2Communicate resource requirements
2.11.3Manage suppliers/contracts
2.11.4Plan and manage procurement strategy
2.11.5Develop a delivery solution

Plan and manage procurement is a critical task in project management that involves identifying, acquiring, and managing resources and services from external providers to ensure successful project delivery. This task requires a thorough understanding of project requirements, effective communication with stakeholders, and careful management of supplier relationships.

This task aligns with Project Resource Management and Project Procurement Management Knowledge Areas and their processes. The following section covers the enablers at a high level.

2.11.1 Define resource requirements and needs

Defining resource requirements and needs is the first step in the procurement planning process. This involves identifying the types and quantities of resources required to complete project activities, as well as the skills and expertise needed to perform these activities.

  • Identify Resource Types: Identify the types of resources required for the project, such as equipment, materials, and personnel. This information can be gathered through a review of the project scope statement, work breakdown structure (WBS), and activity resource requirements. The resource breakdown structure (RBS) tool is used to organize and categorize the resources required for each task.
  • Determine Resource Quantities: Determine the quantity of each resource required for the project, based on the duration and complexity of project activities. This can be done using resource estimating techniques such as expert judgment, analogous estimating, and parametric estimating. The resource histogram and resource leveling techniques are used to ensure that resources are allocated efficiently and effectively.
  • Document Requirements: Document the resource requirements in detail, including technical specifications, quality standards, and any regulatory or compliance requirements. Clear documentation serves as a reference point for subsequent procurement activities.

Traditional vs. Agile

  • Traditional: In the traditional (Waterfall) methodology, resource requirements are defined during the planning phase, which is usually at the beginning of the project. The project is divided into distinct phases, and resources are allocated accordingly. This approach allows for a clear understanding of what resources will be needed and when they will be needed, enabling better planning and control.

  • Agile: In the agile methodology, resource requirements are defined iteratively and incrementally throughout the project. This approach allows for flexibility and adaptability to changing requirements and priorities. Agile teams typically work in short sprints, and resource requirements are defined for each sprint based on the work to be done.

2.11.2 Communicate resource requirements

Communicating resource requirements involves sharing information about resource needs with stakeholders, including procurement teams, potential suppliers and contractors. This requires effective communication skills and a clear understanding of project requirements.

  • Develop Procurement Documents: Develop procurement documents such as requests for proposals (RFPs), requests for quotes (RFQs), and invitations for bids (IFBs) to communicate resource requirements to potential suppliers.
  • Conduct Supplier Engagement: Engage with potential suppliers and contractors to ensure that they have a clear understanding of the resource requirements and project objectives. This may involve holding bidder conferences, site visits, and other meetings to answer questions and provide clarification.
  • Manage Communications: Manage communications with stakeholders throughout the procurement process, ensuring that everyone is kept informed of progress and any changes to resource requirements. The communication management plan is used to identify stakeholders, define communication requirements, and establish communication channels. <!– - Identify Potential Suppliers: Identify potential suppliers and contractors who can provide the required resources, based on factors such as cost, quality, and availability.
  • Conduct Supplier Evaluations: Evaluate potential suppliers based on criteria such as experience, reputation, and financial stability. This can be done through a review of supplier proposals, site visits, and interviews. –>

Traditional vs. Agile

  • Traditional: Resource requirements are communicated through formal documentation such as project plans, statements of work, and requests for proposal. This ensures that all stakeholders have a clear understanding of what resources are needed and when they are needed.

  • Agile: Resource requirements are communicated through regular collaboration and communication between the agile team and stakeholders. This allows for ongoing feedback and adjustment of resource requirements to ensure that they align with changing project priorities. Agile teams typically use tools such as backlogs, task boards, and burn-down charts to communicate resource requirements and progress.

2.11.3 Manage suppliers/contracts

Managing suppliers and contracts involves overseeing the performance of external providers and ensuring that they meet project requirements. This requires effective communication, contract management skills, and a clear understanding of supplier obligations.

  • Develop Procurement Management Plan: Develop a procurement management plan that outlines the roles and responsibilities of both the project team and the suppliers, as well as the terms and conditions of the contract.
  • Monitor Supplier Performance: Monitor supplier performance to ensure that they are meeting project requirements, such as quality standards, delivery schedules, and budget constraints using techniques such as contract performance reporting, inspections and audits.
  • Manage Contract Changes: Manage changes to the contract, such as scope changes, schedule changes, and cost changes, in accordance with the change control process and the agreements.

Traditional vs. Agile

  • Traditional: Suppliers and contracts are managed through a formal procurement process. This process typically includes a request for proposal (RFP), evaluation of proposals, selection of a supplier, and contract negotiation. The focus is on selecting a supplier who can deliver the required resources at the lowest possible cost.

  • Agile: Suppliers and contracts are managed through a more collaborative and flexible approach. Agile teams work closely with suppliers to establish a partnership and ensure that the supplier understands the project goals and requirements. Agile contracts are often structured to allow for flexibility and adaptability to changing project requirements and priorities. This can include using time-and-materials contracts, which allow for flexibility in the scope of work and payment terms, or using performance-based contracts, which incentivize the supplier to deliver value rather than simply meeting contractual obligations.

2.11.4 Plan and manage procurement strategy

The objective of the procurement strategy is to determine the project delivery method, contract payment types (lump sum, firm fixed price, cost plus award fees, cost plus incentive fees, time and materials, target cost, etc.), and how the procurement will advance through the procurement phases.

  • Develop Procurement Strategy: Develop a procurement strategy that outlines the approach to acquiring resources, including the types of contracts to be used, the timing of procurement activities, and the criteria for supplier selection. The procurement strategy should be aligned with project objectives and should consider factors such as risk, cost, and quality.
  • Management Procurement Risks: Identify and manage risks associated with procurement, such as supplier performance risk, cost risk, and schedule risk. The risk management plan is used to identify and assess risks, develop risk response strategies, and monitor and control risks throughout the procurement process.
  • Manage Contracts: Manage contracts throughout the project, ensuring that they are executed and administered in accordance with project objectives and legal requirements. The contract management plan is used to define the processes and procedures for managing contracts, including contract administration, change control, and closeout.

Traditional vs. Agile

  • Traditional: Procurement strategy is planned and managed through a formal procurement process. This process typically includes identifying potential suppliers, evaluating their proposals, and selecting a supplier based on predefined criteria. The focus is on selecting a supplier who can deliver the required resources at the lowest possible cost.

  • Agile: Procurement strategy is planned and managed through a more collaborative and flexible approach. Agile teams work closely with suppliers to establish a partnership and ensure that the supplier understands the project goals and requirements. The focus is on selecting a supplier who can deliver value and collaborate effectively with the agile team. This can include using Agile Contracting, which is a flexible and collaborative approach to contracting that allows for adaptability to changing project requirements and priorities.

2.11.5 Develop a delivery solution

Developing a delivery solution involves determining how project deliverables will be produced, delivered, and accepted by the customer. This requires a thorough understanding of project requirements, as well as effective communication and collaboration with stakeholders.

  • Determine Delivery Approach: Determine the delivery approach, such as phased delivery, incremental delivery, or agile delivery, based on factors such as project complexity, customer requirements, and time constraints.
  • Develop Delivery Plan: Develop a delivery plan that outlines the steps required to produce, deliver, and accept project deliverables, such as defining acceptance criteria, conducting user acceptance testing, and obtaining customer sign-off.
  • Manage Delivery Risks: Identify and manage delivery risks, such as schedule delays, quality issues, and customer dissatisfaction, using risk management techniques such as risk identification, risk analysis, and risk response planning.

Traditional vs. Agile

  • Traditional: A delivery solution is developed through a linear and sequential process. Each phase of the project must be completed before the next phase can begin. This approach allows for a clear understanding of what needs to be delivered and when it will be delivered.

  • Agile: A delivery solution is developed through an iterative and incremental process. The focus is on delivering working software or other tangible outputs in short sprints, with regular feedback and adjustment based on changing requirements and priorities. Agile Contracting can be used to define the terms and conditions for delivering outputs, including the scope of work, delivery schedule, and payment terms. When using Agile Contracting, it’s important to establish a contract that allows for flexibility in managing changes in project requirements and priorities, and that incentivizes the supplier to collaborate and deliver value.

Last updated: March 17, 2024