Procurement management: Your guide to securing project resources

Securing the right project resources at the right time takes skill and experience. Here’s what you need to know to ensure your project procurement process goes smoothly.

Procurement management: Your guide to securing project resources
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For any project manager, procurement management is vital to meeting your project goals on time. It requires the ability to negotiate contracts effectively and to understand a range of products and services, not to mention supply chain logistics.

Here is an overview of procurement management basics that will help you successfully support the goals and deliverables of your projects.

Procurement management definition

Procurement management involves determining the products and services that need to be acquired for projects to be successful, including the timing, quality, payment, and other aspects of product and service delivery. Vendor and product information is key and requires thorough research and evaluation of the project deliverables, potential vendors, offerings, availability, and contract terms. These and other procurement activities are not one-time exercises. Instead, they should be revisited throughout a project lifecycle.

Benefits of procurement management 

Well-executed procurement management provides several project benefits. When carefully planned and executed, procurement management can help increase certainty and quality, control costs, and reduce project risks overall.

  • Increased certainty and quality: By meticulously planning and negotiating detailed contracts, project managers can greatly increase certainty around the quality of procured products or services. This increased certainty will help increase stakeholder confidence in the timing and quality of products and services the project aims to deliver.
  • Cost control: Companies are rarely unconcerned about budget overruns. Carefully negotiated procurement pricing is a vital factor in controlling project costs. Being able to solidify procurement-related costs helps to ensure projects can deliver within budget.
  • Reduced risk: Increased clarity about vendors, contract terms, and product and service quality reduces potential procurement risks and, as a result, project risks overall. A thoroughly developed and executed procurement management process can keep your project deliverables on track.

Procurement documents

Three essential documents are needed to be effective throughout the procurement process.  

Request for Information (RFI)

An RFI is a broad exploratory document sent to vendors initially to start to uncover potential vendor offerings in relation to project requirements. An RFI should contain the following information at a minimum:

rfi example Moira Alexander/IDG

 

Request for Quote (RFQ)

RFQs are used to determine which vendors are able to meet specific project requirements and receive a price bid for products or services rendered. An RFQ should contain at least the following information:

RFQ example Moira Alexander/IDG

 

Request for Proposal (RFP)

An RFP solicits information specific to project details relating to issues to be resolved. Vendors will take this opportunity to promote the best applicable product or service features. An RFP should contain the following information:

rfp example Moira Alexander/IDG

 

4 procurement management steps

While the above procurement documents are essential in establishing a solid procurement management plan, here are the steps you should take to ensure your plan meets project objectives.

  1. Plan for procurements: Research and analyze project goals and deliverables and put together a procurement management plan that identifies all of the requirements and details.
  2. Execute procurement plans: With your plan in place, it’s time to send requests for information (RFI), requests for quotes (RFQs), and requests for proposals (RFPs) to vendors. The exact documents will depend on the complexity of your projects, company size, and internal processes. Each vendor-submitted response should be carefully evaluated to confirm which best meets your project’s specific requirements.
  3. Monitor and control procurements: Once a vendor solution is selected, there could be changes at the vendor, product, service, or project level that can impact procurements. Vendor solutions should be closely monitored to ensure there are no alignment issues with project goals, especially if requirements change.
  4. Close the procurement process: After the project has been completed and vendor products or services have been accepted, project procurements can be officially closed.

Procurement management best practices

In addition to the above steps and documents, there are some best practices that your organization can adopt in alignment with internal policies and procedures.

  • Whenever possible, hire a procurement specialist who is experienced in developing and evaluating RFIs, RFQs, and RFPs.
  • Work in tandem with other areas of the business to accurately identify all project requirements, timelines, and risk points at the start.
  • Seek vendors, preferably local, that are experienced with your niche.
  • Select a vendor that can deliver what you expect and is willing to be accountable and work to resolve issues that may arise.
  • Identify a back-up vendor that can step in quickly if your chosen vendor falls short.
  • Continually trace procurements back to contracts and project requirements to ensure there aren’t any material changes that might become a risk point.

Securing the right project resources on time doesn’t need to be a complicated undertaking if you follow these procurement steps and best practices.

Copyright © 2020 IDG Communications, Inc.

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