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.
Praveen MalikIndependent Consultant| Independent ConsultantNew Delhi, India
Hi Sungjoon,
First of all, there is no need to be sorry about anything. This a discussion forum and everyone has right to raise their doubts or share their opinions.
Refer to fig. 3.4 again. PMBOK Guide processes are meant for a single Project - the performing organization's project. PMBOK Guide does not talk about the process overlaps between two different projects (a buyer's project and a seller's project).
If PMBOK Guide is suggesting an overlap between 2 different processes then both of them are in the same project. In our case, o/p of 12.2 can be i/p to 4.1 in only a few cases (as described in examples in my first post).
All the best.
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1 reply by Sungjoon Park
Jun 18, 2016 4:22 PM
Sungjoon Park
...
Dear Praveen,
Thank you for your kind understanding and an additional reply.
I fully agree with you that figure 3.4 in PMBOK depicts the ideas of interaction of different process groups and project boundaries in a project.
However, it is not necessary to consider that two different projects by a buyer and seller occur and explained in Figure 12.5 since the agreement with a buyer can be considered an initiation or input for seller's project charter and it makes sense if I read the relevant statement in the Procurement Management of PMBOK. The connection between 4.1 and 12.2 by an agreement can be considered why the project is initiated for a seller (vendor). You don't need to limit this Procurement Management to only buyer's position because a buyer in this Management KA can be a seller to an external organization as described in pages 355 through 358 of PMBOK.
It's hard to update the Project Charter due to agreements or contracts with different sellers, and considering all the understandings above I concluded that the agreements with vendors in the buyer's position in 12.2 are irrelevant or different documents from the agreement with customers in 4.1, and that only logical connection between two might consider that the agreement with a buyer (customer) in the seller's position can be an input for the seller's project charter for a new project. It can show one of sources of an agreement, an input of project charter process in the seller's position both in 4.1 and 12.2 with the same contents of agreement.
A buyer in 12.2 is also a buyer (customer) in 4.1 and a seller in 12.2 is also a seller in 4.1 as a performing organization, that's why the performing organization might be a buyer or seller in the Procurement Management.
First of all, there is no need to be sorry about anything. This a discussion forum and everyone has right to raise their doubts or share their opinions.
Refer to fig. 3.4 again. PMBOK Guide processes are meant for a single Project - the performing organization's project. PMBOK Guide does not talk about the process overlaps between two different projects (a buyer's project and a seller's project).
If PMBOK Guide is suggesting an overlap between 2 different processes then both of them are in the same project. In our case, o/p of 12.2 can be i/p to 4.1 in only a few cases (as described in examples in my first post).
All the best.
Dear Praveen,
Thank you for your kind understanding and an additional reply.
I fully agree with you that figure 3.4 in PMBOK depicts the ideas of interaction of different process groups and project boundaries in a project.
However, it is not necessary to consider that two different projects by a buyer and seller occur and explained in Figure 12.5 since the agreement with a buyer can be considered an initiation or input for seller's project charter and it makes sense if I read the relevant statement in the Procurement Management of PMBOK. The connection between 4.1 and 12.2 by an agreement can be considered why the project is initiated for a seller (vendor). You don't need to limit this Procurement Management to only buyer's position because a buyer in this Management KA can be a seller to an external organization as described in pages 355 through 358 of PMBOK.
It's hard to update the Project Charter due to agreements or contracts with different sellers, and considering all the understandings above I concluded that the agreements with vendors in the buyer's position in 12.2 are irrelevant or different documents from the agreement with customers in 4.1, and that only logical connection between two might consider that the agreement with a buyer (customer) in the seller's position can be an input for the seller's project charter for a new project. It can show one of sources of an agreement, an input of project charter process in the seller's position both in 4.1 and 12.2 with the same contents of agreement.
A buyer in 12.2 is also a buyer (customer) in 4.1 and a seller in 12.2 is also a seller in 4.1 as a performing organization, that's why the performing organization might be a buyer or seller in the Procurement Management.
Regards,
Park Saving Changes...
Praveen MalikIndependent Consultant| Independent ConsultantNew Delhi, India
Hi Sungjoon, I could not completely understand what you are trying to suggest. As stated in previous my post "PMBOK Guide processes are meant for a single Project - the performing organization's project." A PM is supposed to apply 47 processes for "performing organization's project". PMBOK Guide explains the process interactions (among the 47 processes) for the "performing organization's project" There are three entities - A Buyer (Client, Customer), Performing Organization (PM's organization), A seller (vendor, there could be multiple sellers/vendors). Revenue flows from Buyer - Performing Organization - Seller(s). ** Buyer & Performing Organization sign an agreement - i/p to 4.1 ** Performing Organization & Seller sign another agreement - o/p of 12.2 ** These two are different agreements. Let me repeat - You have to assume yourself as PM of the performing organization while reading PMBOK Guide's 47 processes.
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1 reply by Sungjoon Park
Jun 19, 2016 2:07 PM
Sungjoon Park
...
Dear Praveen,
Thank you very much again for your reply.
Even though PMBOK should be read as the performing organization, it doesn't mean the performing organization should be a buyer in the Procurement Management but a vendor can initiate the new project as a performing organization with an agreement made in Procurement Management . For a vendor, this agreement is one of input for his own project charter, but for a buyer, the same agreement with a vendor doesn't affect the buyer's project charter.
Hi Sungjoon, I could not completely understand what you are trying to suggest. As stated in previous my post "PMBOK Guide processes are meant for a single Project - the performing organization's project." A PM is supposed to apply 47 processes for "performing organization's project". PMBOK Guide explains the process interactions (among the 47 processes) for the "performing organization's project" There are three entities - A Buyer (Client, Customer), Performing Organization (PM's organization), A seller (vendor, there could be multiple sellers/vendors). Revenue flows from Buyer - Performing Organization - Seller(s). ** Buyer & Performing Organization sign an agreement - i/p to 4.1 ** Performing Organization & Seller sign another agreement - o/p of 12.2 ** These two are different agreements. Let me repeat - You have to assume yourself as PM of the performing organization while reading PMBOK Guide's 47 processes.
Dear Praveen,
Thank you very much again for your reply.
Even though PMBOK should be read as the performing organization, it doesn't mean the performing organization should be a buyer in the Procurement Management but a vendor can initiate the new project as a performing organization with an agreement made in Procurement Management . For a vendor, this agreement is one of input for his own project charter, but for a buyer, the same agreement with a vendor doesn't affect the buyer's project charter.
Regards,
Park Saving Changes...
Praveen MalikIndependent Consultant| Independent ConsultantNew Delhi, India
Hi Sungjoon,
I think we agree that PMBOK Guide has to be considered in the context of performing organization and a PM from the performing organization. But, you have to remember there are 3 entities - Client, Performing Organization, Vendor. You cannot mix these 3.
You wrote "Even though PMBOK should be read as the performing organization, it doesn't mean the performing organization should be a buyer in the Procurement Management but a vendor can initiate the new project as a performing organization with an agreement made in Procurement Management"
Your statement is partially incorrect. Performing Organization is always a buyer in the Procurement Management.
Performing organization and Vendor (Seller) would have different projects. Performing Organization and Vendor would both follow PMBOK Guide and its 47 processes but as different entities. Both will manage different projects and will have view of their own projects. For the Vendor's project, Vendor's PM will think himself as the Performing Organization PM.
Let me give an example. It will be easier to understand.
- Client Name (Charlie), Client's PM Name (C), Agreement with the Performing Organization (CPA) - Performing Organization Name (Papa), Performing Organization's PM Name (P), Agreement with the Client (CPA), Agreement with Vendor (PVA) - Performing Organization's Vendor Name (Victor), Vendor's PM Name (V), Agreement with Papa (PVA)
** P will perform Papa's 4.1 and Papa's 12.2. Although both P & V will negotiate & sign PVA, P will drive Papa's 12.2. P will organize bidder conferences and do proposal evaluation etc. V will not have any role in Papa's 12.2. PVA will be o/p of Papa's 12.2.
** V will think Victor is the performing organization while P will think Victor is a Vendor. V will not have any knowledge of Papa's 12.2. V will just take PVA from P. V will perform Victor's 4.1. V will help Victor's Sponsor in creation of PC and get it signed. P will not have any role in Victor's 4.1. PVA will be input to Victor's 4.1.
You also wrote "but for a buyer, the same agreement with a vendor doesn't affect the buyer's project charter.". I think we are back to your original Q.
** Under special circumstances PVA could be i/p to Papa's 4.1. I had explained this in my original ans. Let me copy/past (slightly modified) examples from my original ans: 1. As part of CPA, Charlie may ask the Papa to work with a particular vendor(s) namely Victor. PVA may become i/p to Papa's 4.1. 2. Papa may have bid for Charlie's project while considering a particular vendor(s) namely Victor. A conditional PVA may been signed even before CPA. PVA may become i/p to Papa's 4.1. 3. Papa has a running & perpetual engagement (PVA) with a Victor. Papa regularly uses the resources from Victor for doing its projects. PVA may become i/p to Papa's 4.1.
To conclude, let me repeat - there are 3 entities. PMBOK Guide has to be considered in the context of Performing Organization and a PM of the Performing Organization. Different people (PMs) from different entities will have their own projects and all of them will think themselves as part of the Performing Organization.
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1 reply by Sungjoon Park
Jun 23, 2016 7:19 AM
Sungjoon Park
...
Dear Praveen,
Thank you very much for your reply.
I fully agree on your statements with an exception that agreements with vendors in Procurement Management can be used as the input to buyer's Project Charter.
These two different agreements might be interactive when vendors are pre-requirements to the agreement with the client as designated vendors or sub-contractors, and two different agreements might affect the buyer's Project Charter at the very beginning of the buyer's project if the agreement with a vendor has been completed and in effect before the buyer's project charter is developed. And this should be considered as a special case, considering overall context of PMBOK.
However, the agreement(contract) with a vendor can't be interactive with the buyer's project charter during the execution of the buyer's project and that's why the agreement with client in 4.1 for buyer's project charter is originated from outside of project boundaries as shown in the data flow diagram of 4.1, PMBOK.
For a vendor's point of view, the same agreement with a buyer made in buyer's Procurement Management is one of inputs to vendor's project charter development for his own project and that's why I stated that performing organization can be a seller. The seller can initiate his own project with an agreement with a buyer made in buyer's Procurement Management and that's why this agreement is connected to 4.1 "Develop Project Charter" as shown in data flow diagram of 12.2, PMBOK. For the seller, this agreement is originated from outside of his project boundaries.
I think we agree that PMBOK Guide has to be considered in the context of performing organization and a PM from the performing organization. But, you have to remember there are 3 entities - Client, Performing Organization, Vendor. You cannot mix these 3.
You wrote "Even though PMBOK should be read as the performing organization, it doesn't mean the performing organization should be a buyer in the Procurement Management but a vendor can initiate the new project as a performing organization with an agreement made in Procurement Management"
Your statement is partially incorrect. Performing Organization is always a buyer in the Procurement Management.
Performing organization and Vendor (Seller) would have different projects. Performing Organization and Vendor would both follow PMBOK Guide and its 47 processes but as different entities. Both will manage different projects and will have view of their own projects. For the Vendor's project, Vendor's PM will think himself as the Performing Organization PM.
Let me give an example. It will be easier to understand.
- Client Name (Charlie), Client's PM Name (C), Agreement with the Performing Organization (CPA) - Performing Organization Name (Papa), Performing Organization's PM Name (P), Agreement with the Client (CPA), Agreement with Vendor (PVA) - Performing Organization's Vendor Name (Victor), Vendor's PM Name (V), Agreement with Papa (PVA)
** P will perform Papa's 4.1 and Papa's 12.2. Although both P & V will negotiate & sign PVA, P will drive Papa's 12.2. P will organize bidder conferences and do proposal evaluation etc. V will not have any role in Papa's 12.2. PVA will be o/p of Papa's 12.2.
** V will think Victor is the performing organization while P will think Victor is a Vendor. V will not have any knowledge of Papa's 12.2. V will just take PVA from P. V will perform Victor's 4.1. V will help Victor's Sponsor in creation of PC and get it signed. P will not have any role in Victor's 4.1. PVA will be input to Victor's 4.1.
You also wrote "but for a buyer, the same agreement with a vendor doesn't affect the buyer's project charter.". I think we are back to your original Q.
** Under special circumstances PVA could be i/p to Papa's 4.1. I had explained this in my original ans. Let me copy/past (slightly modified) examples from my original ans: 1. As part of CPA, Charlie may ask the Papa to work with a particular vendor(s) namely Victor. PVA may become i/p to Papa's 4.1. 2. Papa may have bid for Charlie's project while considering a particular vendor(s) namely Victor. A conditional PVA may been signed even before CPA. PVA may become i/p to Papa's 4.1. 3. Papa has a running & perpetual engagement (PVA) with a Victor. Papa regularly uses the resources from Victor for doing its projects. PVA may become i/p to Papa's 4.1.
To conclude, let me repeat - there are 3 entities. PMBOK Guide has to be considered in the context of Performing Organization and a PM of the Performing Organization. Different people (PMs) from different entities will have their own projects and all of them will think themselves as part of the Performing Organization.
Dear Praveen,
Thank you very much for your reply.
I fully agree on your statements with an exception that agreements with vendors in Procurement Management can be used as the input to buyer's Project Charter.
These two different agreements might be interactive when vendors are pre-requirements to the agreement with the client as designated vendors or sub-contractors, and two different agreements might affect the buyer's Project Charter at the very beginning of the buyer's project if the agreement with a vendor has been completed and in effect before the buyer's project charter is developed. And this should be considered as a special case, considering overall context of PMBOK.
However, the agreement(contract) with a vendor can't be interactive with the buyer's project charter during the execution of the buyer's project and that's why the agreement with client in 4.1 for buyer's project charter is originated from outside of project boundaries as shown in the data flow diagram of 4.1, PMBOK.
For a vendor's point of view, the same agreement with a buyer made in buyer's Procurement Management is one of inputs to vendor's project charter development for his own project and that's why I stated that performing organization can be a seller. The seller can initiate his own project with an agreement with a buyer made in buyer's Procurement Management and that's why this agreement is connected to 4.1 "Develop Project Charter" as shown in data flow diagram of 12.2, PMBOK. For the seller, this agreement is originated from outside of his project boundaries.
