I can clearly understand that the agreements or contracts with the customers can be the input for Develop Project Charter Process but I am still confused why the agreements with sellers, outputs from Conduct Procurement Process can be connected as inputs to Develop Project Charter Process.
In case that the project is initiated for an external customer and the performing organization is a seller as indicated in the section of Develop Project Charter in the PMBOK guide, in my humble opinion, there can't be usual connections between Processes of the Conduct Procurement and Develop Project Charter since Conduct Procurement might be executed and produce an agreement with a seller as the performing organization should be a buyer for each procurement need.
Based on PMBOK guide, it should be accepted that the Project Charter can be updated as needed due to several agreements with sellers which might be made time to time during the execution of the project.
To my understanding, to allow two Processes to be connected logically, the performing organization should be a buyer in both Processes of Develop Project Charter and Conduct Procurement.
Seema SonkiyaHead Business Analysis Practices, PMI-PBA trainer| iZenBridge Consultancy Private LimitedJaipur, Rajasthan, India
Sungjoon, procurement management is only knowledge area that takes the buyer view. When a buyer gives a contract to a seller, there agreement serves as input to sellers "Develop Project Charter" process.
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1 reply by Sungjoon Park
Jun 14, 2016 12:58 PM
Sungjoon Park
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Hi Seema,
Yes, that's what I want to say. Even though PMBOK says that the performing organization take either the buyer or seller position in procurement management, the agreement with a seller as a buyer in Conduct Procurement Process might be hard to connect to Develop Project Charter Process because the Project Charter has already been developed when performing organization take the seller position for an external customer.
Sungjoon, procurement management is only knowledge area that takes the buyer view. When a buyer gives a contract to a seller, there agreement serves as input to sellers "Develop Project Charter" process.
Hi Seema,
Yes, that's what I want to say. Even though PMBOK says that the performing organization take either the buyer or seller position in procurement management, the agreement with a seller as a buyer in Conduct Procurement Process might be hard to connect to Develop Project Charter Process because the Project Charter has already been developed when performing organization take the seller position for an external customer.
When the performing organization needs to contract out part of the project to external organization, the performing organization becomes a buyer (customer) in this procurement, and the seller (the external organization) becomes the performing organization. In this case the agreement is the input to the seller project charter.
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1 reply by Sungjoon Park
Jun 14, 2016 5:39 PM
Sungjoon Park
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Dear Adel,
You got my point but my question was that the Project Charter has once been developed using the agreement with the customer as one of inputs and then how this approved Project Charter can be interactive with the different agreements with different sellers based on Procurement Management of the PMBOK guide as shown in the data flow diagram.
When the performing organization needs to contract out part of the project to external organization, the performing organization becomes a buyer (customer) in this procurement, and the seller (the external organization) becomes the performing organization. In this case the agreement is the input to the seller project charter.
Dear Adel,
You got my point but my question was that the Project Charter has once been developed using the agreement with the customer as one of inputs and then how this approved Project Charter can be interactive with the different agreements with different sellers based on Procurement Management of the PMBOK guide as shown in the data flow diagram.
Thanks for your reply. Saving Changes...
Praveen MalikIndependent Consultant| Independent ConsultantNew Delhi, India
Hi Sungjoon,
I am not sure why are you saying seller agreements are i/p to Develop Project Charter. Please provide PMBOK Guide reference. You can also look at this article to understand the difference between contract (agreement) and project charter - http://www.pmbypm.com/what-is-project-charter-is-it-contract/ Saving Changes...
You may refer to data flow diagram in Conduct Procurement Process of PMBOK Guide which shows the agreement with seller, one of outputs of this Process, to connect to Develop Project Charter Process. And agreement may be used for broad concept of contract which might be implicitly used for a legal obligation with an external organization.
Thank you for your reply.
Park
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1 reply by Praveen Malik
Jun 16, 2016 1:05 AM
Praveen Malik
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Hi Sungjoon,
I believe you are referring to fig. 12.5. The fig. suggests that any of the o/p can be used as i/p to 4.1 including agreements. Other i/p could be selected sellers, resource calendars, other proj. docs.
Let me explain. First, ref. to fig. 3.4 You would notice that at the start of a project there is no definite boundary. A project can start before 4.1 or after 4.1.
Let me give few examples:
1. The client may have (as part of the project contract) asked the performing organization to work with a particular vendor(s).
2. The performing organization may have bid for a project considering a particular vendor(s).
3. There a running engagement with a vendor where the performing organization regularly uses the resources from the vendor.
Hope it helps.
Saving Changes...
Praveen MalikIndependent Consultant| Independent ConsultantNew Delhi, India
Jun 15, 2016 4:13 PM
Replying to Sungjoon Park
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Hi Praveen,
You may refer to data flow diagram in Conduct Procurement Process of PMBOK Guide which shows the agreement with seller, one of outputs of this Process, to connect to Develop Project Charter Process. And agreement may be used for broad concept of contract which might be implicitly used for a legal obligation with an external organization.
Thank you for your reply.
Park
Hi Sungjoon,
I believe you are referring to fig. 12.5. The fig. suggests that any of the o/p can be used as i/p to 4.1 including agreements. Other i/p could be selected sellers, resource calendars, other proj. docs.
Let me explain. First, ref. to fig. 3.4 You would notice that at the start of a project there is no definite boundary. A project can start before 4.1 or after 4.1.
Let me give few examples:
1. The client may have (as part of the project contract) asked the performing organization to work with a particular vendor(s).
2. The performing organization may have bid for a project considering a particular vendor(s).
3. There a running engagement with a vendor where the performing organization regularly uses the resources from the vendor.
Hope it helps.
...
1 reply by Sungjoon Park
Jun 16, 2016 2:39 AM
Sungjoon Park
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Dear Praveen,
Thank you for your kind reply.
First, I fully agree with you that the project might start before or after the project charter developed.
Second, there might be misunderstandings between my original intention to refer to this input of the agreement and your understanding on my question.
Project Charter can be developed as a buyer or seller under the contract or agreement which means performing organization can be either a seller for external customer or a buyer who may hire different sellers time to time based on project needs.
But my understanding of 4.1 in PMBOK guide is that the project charter is developed in the position of the seller whether or not a customer is in the performing organization and it makes sense if we read the detailed explanation of 4.1 in PMBOK, which means the seller has already incorporated the agreement with customer (internal/external) into the Project Charter when the Project Charter has been developed, and approved by the project sponsor.
It is true that agreement with a vendor in Conduct Procurement might be made before project charter has been developed and it can be inclusive in the agreement with the customer as designated vendors or subcontractors. However, it might be applicable only at the very beginning of the project if we consider that any critical change to project charter might be serious after the project charter has been approved and authorized project initiation.
In 12.2 of PMBOK, the agreement with the vendor is totally different document from the agreement with the customer. If we allow the agreement(s) with vendor(s), which might occur time to time during execution, to be interactive with the Project Charter, we should accept that the project charter might be updated as needed based on the different types, contents, legal obligations etc. in the each agreement with the specific vendor.
Anyway, thank you very much for your kind explanation.
I believe you are referring to fig. 12.5. The fig. suggests that any of the o/p can be used as i/p to 4.1 including agreements. Other i/p could be selected sellers, resource calendars, other proj. docs.
Let me explain. First, ref. to fig. 3.4 You would notice that at the start of a project there is no definite boundary. A project can start before 4.1 or after 4.1.
Let me give few examples:
1. The client may have (as part of the project contract) asked the performing organization to work with a particular vendor(s).
2. The performing organization may have bid for a project considering a particular vendor(s).
3. There a running engagement with a vendor where the performing organization regularly uses the resources from the vendor.
Hope it helps.
Dear Praveen,
Thank you for your kind reply.
First, I fully agree with you that the project might start before or after the project charter developed.
Second, there might be misunderstandings between my original intention to refer to this input of the agreement and your understanding on my question.
Project Charter can be developed as a buyer or seller under the contract or agreement which means performing organization can be either a seller for external customer or a buyer who may hire different sellers time to time based on project needs.
But my understanding of 4.1 in PMBOK guide is that the project charter is developed in the position of the seller whether or not a customer is in the performing organization and it makes sense if we read the detailed explanation of 4.1 in PMBOK, which means the seller has already incorporated the agreement with customer (internal/external) into the Project Charter when the Project Charter has been developed, and approved by the project sponsor.
It is true that agreement with a vendor in Conduct Procurement might be made before project charter has been developed and it can be inclusive in the agreement with the customer as designated vendors or subcontractors. However, it might be applicable only at the very beginning of the project if we consider that any critical change to project charter might be serious after the project charter has been approved and authorized project initiation.
In 12.2 of PMBOK, the agreement with the vendor is totally different document from the agreement with the customer. If we allow the agreement(s) with vendor(s), which might occur time to time during execution, to be interactive with the Project Charter, we should accept that the project charter might be updated as needed based on the different types, contents, legal obligations etc. in the each agreement with the specific vendor.
Anyway, thank you very much for your kind explanation.
Regards,
Park Saving Changes...
Praveen MalikIndependent Consultant| Independent ConsultantNew Delhi, India
Hi Sungjoon,
You have understood the 4.1 and 12.2 correctly. You are also right in saying that the processes in PMBOK Guide are meant for PM of the performing organization.
Performing organization may be working for an external customer or an internal customer. Performing organization may or may not employ vendors (perform Procurement KA processes) depending on the needs of the project.
Coming to your Q. PC is seldom changed. Two things:
1. The main purpose of PC is to authorize a project (Sponsor authorizes it) and not to document the high level desc. of the project. The authorization (or PC) usually changes in 4 circumstances - Sponsor changes, PM changes or project objectives change completely, project is terminated.
2. IF o/p of a process changes, it does not necessarily means that it will impact other processes - like change in 12.2 will rarely impact 4.1. PMBOK Guide only shows possibilities but actual implementation of processes depends on project team and PM.
Identification of a new vendor or signing a new vendor agreement would entail change in proj mgmt plan but not PC.
Hope it helps.
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1 reply by Sungjoon Park
Jun 17, 2016 6:06 PM
Sungjoon Park
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Dear Praveen,
Thank you for your kind reply. I fully agree with you on your statement that needs of new vendors might not cause changes to Project Charter and on your understanding of the interaction of relevant processes in PMBOK guide.
I revisited the relevant sections of PMBOK guide after I read your previous reply and finally concluded that the agreement with a vendor in 12.2 of PMBOK should be considered as irrelevant document to Project Charter in 4.1 when performing organization is a buyer, however, from the vendor's point of view, this same agreement with a buyer might be considered to be an agreement in 4.1 to initiate the different project performed by the vendor. So there is no any connection between agreements in 4.1 and 12.2 in the buyer position of 12.2. This agreement in 12.2 is the same agreement in 4.1 to the vendor who newly initiate the project and I fully understand why PMBOK states that the performing organization should be considered as both a buyer or seller in the Project Procurement Management.
There is already an answer in PMBOK but I have failed to understand the reasoning behind the PMBOK statement in this issue. Now I clearly, fully and confidently understand "the why".
I am very sorry for bothering you in this regard and I thank you so much for your effort to explain this very well.
You have understood the 4.1 and 12.2 correctly. You are also right in saying that the processes in PMBOK Guide are meant for PM of the performing organization.
Performing organization may be working for an external customer or an internal customer. Performing organization may or may not employ vendors (perform Procurement KA processes) depending on the needs of the project.
Coming to your Q. PC is seldom changed. Two things:
1. The main purpose of PC is to authorize a project (Sponsor authorizes it) and not to document the high level desc. of the project. The authorization (or PC) usually changes in 4 circumstances - Sponsor changes, PM changes or project objectives change completely, project is terminated.
2. IF o/p of a process changes, it does not necessarily means that it will impact other processes - like change in 12.2 will rarely impact 4.1. PMBOK Guide only shows possibilities but actual implementation of processes depends on project team and PM.
Identification of a new vendor or signing a new vendor agreement would entail change in proj mgmt plan but not PC.
Hope it helps.
Dear Praveen,
Thank you for your kind reply. I fully agree with you on your statement that needs of new vendors might not cause changes to Project Charter and on your understanding of the interaction of relevant processes in PMBOK guide.
I revisited the relevant sections of PMBOK guide after I read your previous reply and finally concluded that the agreement with a vendor in 12.2 of PMBOK should be considered as irrelevant document to Project Charter in 4.1 when performing organization is a buyer, however, from the vendor's point of view, this same agreement with a buyer might be considered to be an agreement in 4.1 to initiate the different project performed by the vendor. So there is no any connection between agreements in 4.1 and 12.2 in the buyer position of 12.2. This agreement in 12.2 is the same agreement in 4.1 to the vendor who newly initiate the project and I fully understand why PMBOK states that the performing organization should be considered as both a buyer or seller in the Project Procurement Management.
There is already an answer in PMBOK but I have failed to understand the reasoning behind the PMBOK statement in this issue. Now I clearly, fully and confidently understand "the why".
I am very sorry for bothering you in this regard and I thank you so much for your effort to explain this very well.
