Procurement Explained

The last three postings provided an introduction to procurement, relating the steps and stages to PMI’s system of terminology.  In this and the next several postings, I will explain the boundaries of each of the procurement processes.

Plan Procurements
The PMI refers to procurement planning as ‘plan procurements.’  In ‘plan procurements,’ the project’s needs (for assets, skills and services) are converted through make-or-buy analysis into procurement decisions.

Project Analysis
General project planning leads into procurement planning.  Planning begins by converting stakeholder objectives into technical requirements.

Complete and thorough requirements analysis is fundamental to the success of any project because it determines exactly what must be accomplished in order to satisfy stakeholders.

The ‘scope baseline’ is developed from the requirements documents.  The baseline is made up of the scope statement, work breakdown structure (WBS) and WBS Dictionary.

Time and cost management planning are driven by expectations set out in the scope baseline.

PMI Planning Steps

  • Project Charter
  • Objectives
  • Collect Requirements
  • WBS
  • Define Activities
  • Sequence Activities
  • Estimate Activity Resources
  • Estimate Activity Duration
  • Develop Schedule
  • Estimate Costs
  • Determine budget
  • Quality
  • Human Resources
  • Risk
  • Procurement

Project analysis leads to the identification of ‘activity resource requirements.’ These ‘resource requirements’ are a complete listing of everything the project needs in order to be completed.

The separation between what assets and skills the organization can dedicate to the project – versus what the project must have in order to be completed – determines what must be procured.

Make-or-buy decisions are related to the dilemma of what can, should and must be purchased if the project is to be completed as required by the stakeholders.

In my next submission I will outline the documents generated by the ‘plan procurements’ process.

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