Procurement Knowledge Area

Procurement Management in Small Projects

Procurement Management may be the area where small projects are best able to tailor Project Management Processes.  I make no assertions that because a project is small it is also not complex or challenging.  However, for the sake of this post, I will assume that associated procurement is not on the breadth experienced by larger projects.  On large projects I’ve worked in the past, there has been as much as 70 – 80% of the total budget purchased from suppliers.  Those kinds of dollars demand rigorous Procurement Management.  A smaller project probably does not have the same kinds of numbers.

In this post, I’ll explore how Procurement Management can be implemented in a small project environment.  This is the latest in a series of posts that discuss the Project Management Institute’s (PMI) ten Knowledge Areas in this context.  I’m tackling them in alphabetical order so readers can easily find a specific Knowledge Area, as desired.  Today, I’ll discuss the Plan Procurement Management.  In part two of this topic, I’ll address Conduct Procurements, Control Procurements, and Close Procurements processes.

Planning Process Group

Executing Process Group

Monitoring and Controlling Process Group

Closing Process Group

Plan Procurement Management

Conduct Procurements

Control Procurements

Close Procurements

 Plan Procurement Management

This is the process that describes the development of the Procurement Management Plan; think of this as a chapter within the larger Project Management Plan.  In it, the team documents the results of the make or buy analysis, how procurements will be conducted and managed, roles and responsibilities, and types of allowable contracts.  For the small project, time should be invested on the make or buy analysis as all of the other sections may be moot if the decision is to make the needed materials.  (Note this analysis is for materials that are not COTS or Commercial Off-The-Shelf items such as paper clips, screwdrivers, or other types of commodities easily obtained at stores.)

This make or buy analysis is not one to be minimized, although it might be an easy one to complete.  That is, if a company only designs software but does not have any manufacturing facilities, then the whiz-bang gadget it envisions will need to be made by a supplier.  Other reasons to buy include the ability to free the team to work on other tasks, inadequate capacity in the company’s manufacturing facilities, insufficient labor resources, or small volume requirements that would require significant capital expenditures to establish operations.

Conversely, an organization may decide to make if it wants to protect certain proprietary information or if there are no suitable suppliers.

Whatever the final outcome, it will dictate the contents of the Procurement Management Plan.  If the small project conducts this step with diligence, careful consideration, and forethought, the greater the chances for success it will enjoy.

 

In my next post, I will assume the small project has decided to buy (rather than make) and talk about the next three processes in the Procurement Management Knowledge Area.

Until then!

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  1. […] to the second post to discuss Procurement Management in a small project.  Last time, I talked about Plan Procurement Management.  Today, I’ll address Conduct Procurements, Control […]

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