From the course: Project Management Foundations

How to plan procurement

From the course: Project Management Foundations

How to plan procurement

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- [Narrator] Even with homemade chicken soup, you don't make everything from scratch. Imagine how long it would take and how much it would cost if you had to raise your own chickens, vegetable, and wheat and make chicken stock and noodles. The same goes in the project world. Procuring products, services, and skills can be a lot quicker than trying to do everything yourself. When you purchase items from outside your organization, you need to plan how you're going to do that. You guessed it. That's what a procurement plan is for. First, you identify what you need to purchase. Maybe you need people with specific skills, or you need more people than your organization has, or the project requires products and materials. Second, you document your procurement processes. Who handles procurement? Is it the purchasing department, the project team, or a combination of the two? The plan describes criteria for choosing vendors, the selection process, types of contracts you use, and how you manage those contracts. Fortunately, you usually don't have to invent all these processes. Most organizations already have procurement processes in place. Talk to your purchasing department or finance group to find out how it's done. Third, you describe your make-or-buy decision process. Basically, how you decide whether to use in-house products or services or procure them. To make an informed make-or-buy decision, it's important to understand your needs. Make sure your requirements are clear, and then prioritize them. That way, it's easier to pick products that meet your requirements. Plus, you can resist bells and whistles you don't need. You have to see if a product that meets your needs is available. If it is, evaluate how it matches up with your requirements. Before you finalize your decision, consider the pros and cons of making versus buying. If your project is on a tight timeline, buying is probably the right choice. The last part of the procurement plan is a list of potential vendors who offer what you need to purchase. Describe how you researched vendors and contractors and the criteria for developing the list. Procurement planning helps you make smart decisions about whether to purchase products and services, and if you do, which products and services to procure. As an exercise, identify some of the criteria you might use to choose the scheduling system vendor.

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