What's New in Project Procurement Management (pt 2)

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A blog that looks at all aspects of project and program finances from budgets, estimating and accounting to getting a pay rise and managing contracts. Written by Elizabeth Harrin from GirlsGuideToPM.com.

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It’s time for another instalment of What’s New In the PMBOK Guide®-- Sixth Edition. Following on from my look at the Plan Procurement Management process (which you can read here), we’ve reached the second of the Project Procurement Management Knowledge Area processes: Conduct Procurements.

Here are the headlines: there are quite a few changes, once again focusing I feel on ensuring professional judgement is applied, and making it easier to tailor the process. Overall, we’re seeing a process that is less prescriptive and more flexible, which is, I think, a good thing.

Having said that, fundamentally the old and new processes are the same. You won’t need to radically treat procurement any differently now than you have been doing in the past. There’s a lot of good stuff in the process, and that’s still there.

It’s also worth noting that the guidance is very much to get experts involved in procurement. Unless you are in a tiny company, chances are that there is someone on the project team who has more experience in buying stuff than you do. If you have a procurement team, buying division, vendor management group or whatever they might be called – use them. It’s far better to draw on the expertise of people who know their way round a procurement bid document than have to learn this stuff from scratch yourself, especially when you might not have to use it again for some time.

Of course, if you are taking the PMI exams, you need to know the material in order to get through the test. I feel that knowing isn’t the same as being experienced in doing. So, always, always involve expert buyers where you have them. You’ll get a better deal and your will most likely be better protected in contract terms too.

OK, now those messages are out of the way, let’s dive into the process and see how the new version of the PMBOK Guide®-- Sixth Edition has evolved.

Conduct Procurements Process

This is the second process in the Knowledge Area. We’re in the Executing process group.

Inputs

There are some changes to the inputs for this process. The procurement management plan has dropped out – somewhat surprisingly – but is replaced with the broader “procurement documentation”. This means other procurement-specific document has also been removed, namely make or buy decisions, source selection critiera and the procurement statement of work.

The project management plan is a new input, along with enterprise environmental factors (because we can’t get enough of those!).

Tools and Techniques

This section is the perfect example of where the process is becoming more vague and yet more helpful at the same time.

Data analysis is a new T&T, replacing proposal evaluation techniques, independent estimates and analytical techniques. In fact, proposal analysis is called out as a data analysis tool that you should/could be considering for use on the project. All of these are ways of looking at data analysis, but instead of mandating particular ways of analysing the data, the new version of the guidance lets you pick and choose what would be most useful for you.

Interpersonal and team skills replaces procurement negotiations. This reflects that you may have to do negotiation, but overall you need more than just good negotiating skills to close a deal.

I think this is reflective of the fact that you, as the project manager, might not actually be doing the negotiation yourself in many cases. What you want instead is the interpersonal skills to be able to make sure the discussions happen, conflict is addressed, the right people do the right things and you all get to agreement.

Outputs

There isn’t much change to the outputs for this process.

Resource calendars have been removed. Perhaps it was decided that you didn’t really need to create a resource calendar for your supplier, now that you know who they are.

Organisational process assets are included. It’s almost as if the first edit was: Where have we forgotten to mention enterprise environmental factors and organisational process assets? Let’s go and drop those into all the remaining processes now.

You will get very familiar with these terms and what they mean as you go through the PMBOK Guide®-- Sixth Edition.

In the case of this particular process, the organisational process assets covered here are things that you would possibly need to update as a result of successfully securing the services of your vendor. These could include:

  • Your company’s list of suitable, pre-qualified sellers (updated to add the one you just chose)
  • Your company’s list of prospective sellers (updated to include the unsuccessful vendors you didn’t choose but who came a close second and may be worth talking to again for another project – or perhaps to remove one that you found was close to liquidation or something similar)
  • Your company’s seller database (to record how the process went, your thoughts on the vendor presentations etc. Basically, lessons learned for procurement).

Next time I’ll look at what’s new in the Control Procurements process. There is one major change in this process that you don’t want to miss! I’ll tell you more next time.

 

Posted on: March 27, 2018 09:00 AM | Permalink

Comments (6)

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Thanks for the update Elizabeth. Bid documents was a good addition in the 6th edition.

Thank you Elizabeth for updating on changes. Procurement strategy and procurement phases are interesting one.

Thanks for sharing this, Elizabeth.

Great Article

Thank you for a clear explanation

They are alot difference between two versions of PMBOK!!!!!

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