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Managing Procurements
Procurement Management & The Project Manager’s Role In The Project Life Cycle

Where do project managers fit into the procurement management process? It affects our projects, and yet we often aren’t the ones sourcing the vendors and suppliers that will work on our projects. It’s also a major source of risk—what happens to your project when the developer you procured drops off the face of the earth?

My name is Shash Roy and I have been in the world of project management for the past 20 years. I have been teaching procurement management for the past 10 years, and I have seen how this subject is not very popular in most project management discussions, but it is very important in projects. 

I will talk about project procurement management from the eyes of the project manager and cover how, if not managed properly, it will lead to risk and issues.

What is Procurement Management?

Procurement involves acquiring goods or services from an external supplier or vendor. On any given project, you might need to procure hardware, software, or additional resources or team members with specific skills. 

Procurement management is the process of sourcing, engaging, and working with vendors in whatever capacity is needed for the specific project.

Many times, project managers tend to overlook this area and subsequently suffer due to a procurement delay. Think about a house of cards: if one card falls, the rest fall automatically. So, if procurement is not given proper attention, it will delay the project. 

Why is it Important for PMs to Understand Procurement?

The procurement process starts with the identification that procurement is needed and then coordinating with the procurement manager or department. After you have the go-ahead to see a procurement for your project, draw up a procurement schedule with the duration specific to the procurement. For example, if you need an additional developer, consider how many hours, days, or weeks you’ll need from them, and when they’ll start and finish their work on the project.

Once the procurement schedule is embedded in the project schedule, and shared with the stakeholders, this establishes a complete look and feel for the project timeline. Procurement should not be treated in a silo and as a separate activity. Many times, procurement is not considered as one of the project activities, which can potentially cause project delay. 

Once the project schedule (with the embedded procurement duration) is shared with various stakeholders (both internal and external), establish expectations amongst both the project team and procurement team. Transparency ensures project trust and establishes a positive atmosphere. Regular stakeholder meetings (both internal team meetings and customer status meetings) help monitor how the procurement is progressing.

Let’s talk about some risks that are inherent to the procurement process and which can impact the project schedule. A risk that occurs due to delay in procurement is probably the most common risk that occurs in projects.

Some real-life situations might include a delay in hardware procurement, the incompatibility of new or upgraded software or configuration difficulties, or the exit of key resources at a critical period.

So as a project manager, you would have to envisage all these potential situations and raise them as risks right at the beginning of the project. These risks would be listed in the project charter and shared with all stakeholders.

Procurement Throughout The Project Life Cycle 

The following paragraphs go through the five phases of the project, how project managers and procurement teams can work together throughout, and who is responsible for what.

Initiation

Identify what kind of procurement is needed for the project: hardware, software or resources. The benefit of identifying them upfront is the ability to be transparent to all project stakeholders so they understand the importance of procurement and the associated risks. 

During this initiation stage, the project manager gets assigned to the project and starts by studying the statement of work. The statement of work defines the scope and what needs to be done. Remember this is not a one-person job! 

The project manager identifies the procurement and validates this with the customer. This likely occurs in the kick off meeting with the customer, which ensures proper communication with the project team and all the project stakeholders (remember the project team is also part of the project stakeholders). The procurement is also identified in the project charter.

After the procurement has been identified, this is a good time to:

  1. Understand the procurement process in the organization
  2. Get to know the procurement manager and other procurement professionals in the procurement department
  3. Kickoff the procurement process. Many organizations need an initial form to be filled up. This might entail downloading the forms from a common portal or something like SharePoint.
  4. Set communication channels, frequency, and expectations with the procurement department or manager.
  5. Understand high level procurement timelines. How much time does this type of procurement take? Communicate this with project stakeholders. 

Planning

As the project moves on to the planning phase, the customer will be anxious to know the project strategy in detail. How will you manage the project? When will I see the deliverables? What are the expectations? 

Typical project management planning activities would be taking place at this stage. As the project manager is building the timeline, they will also build the procurement timelines within the project schedule. This is a win-win strategy, because building procurement timelines within your project schedule not only brings transparency to the procurement management process but also helps you to remember the milestones and key activities related to the procurement.

For many projects requiring procurement, project managers should include a procurement management plan as part of the project management activities. Sometimes this procurement management plan is a standalone planning document (like the communication management plan, or quality management plan) or it exists as a sub-section of the main project management plan.

So as a project manager, I encourage you to plan procurements concurrently with all the other areas in your project. Hence a project manager would:

  1. Prepare the procurement management plan
  2. Build the procurement timelines in your project schedule
  3. Share this with customer and explain (as required)
  4. Invite the procurement manager or department to key status meetings

At this stage, the procurement team will take care of the procurement documents, such as purchase orders, purchase requisitions, procurement contracts, and others.

Execution

So after procurements have been planned, they are carried out. Always remember that the execution of the procurement might get done before the execution phase of the project. For example, you might need Java developers, and you might be unable to start the execution phase of the project until the procurement of the Java developers has been completed.

As you complete the planning, you should be building a roadmap of the project flow, which will make everyone involved aware of milestones and the deliverables. The procurement process will also be starting, and the procurement manager will have started to solicit vendors and suppliers. You, as the project manager, will be in constant communication with the procurement manager. 

As a project manager, you don’t need to micromanage the procurements (this is procurement manager’s job), but the project schedule helps you keep track of the procurement activities. Procurement managers also take care of things like contract management, supplier management or vendor management, and maintaining the supplier relationship.

The procurement manager will involve the project manager in deciding the selection criteria for choosing the vendor. Remember, this conversation would have taken place during the planning phase and probably would be ongoing during the status meetings.

The project manager’s procurement related activities during the execution phase would involve:

  1. Manage the project schedule and track the procurement milestones
  2. Meet with the procurement manager (as per the communication expectations)
  3. Answer procurement related questions raised by the procurement manager
  4. Provide status updates of procurement (along with all other activities) to customers and all other stakeholders

Monitoring

As a project manager, you will need to be aware of the procurement tasks. Always remember that your project is the most important thing to you, but the procurement department is handling several procurements and will schedule your procurement accordingly. This might cause frustration and anxiety. Remember not to step on the toes of the procurement manager. 

The goal is to maintain calm, manage expectations, and monitor the project schedule and other identified timelines diligently. You will ensure good will, delivery as scheduled (hopefully), and an on-track project. This also helps with customer buy-in, and you can keep the customer up to speed on both the project timeline and procurement timeline through this monitoring.

In terms of risks, potential procurement delay should already be logged in as a risk, so you should be monitoring this constantly as well.

Closing

After the procurement is received, and implemented in your project, procurement is considered completed. PMBOK 6.0 does not exclusively call out closing for procurements, because technically everything closes when we conduct project closing. But this is a good time to think about any lessons learned and what we could have done better.

What’s Next?

I hope this article was useful, and that it brought an understanding of managing procurements in your project! 

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By Shashwati Roy

Shash started her journey in India as a Statistics Intern, (her major being in Statistics), in 1987. She has held many roles as Training Manager, Quality Analyst, and Project Manager. She realized her passion towards project management and transitioned to a role as a Full time Project Manager in 2008-2009. She has 20+ years of experience in managing teams of business analysts, technical leads, testers, database administrators, business SMEs, trainers. She has been teaching and mentoring in project management for past 10 years and is currently teaching Procurement Management as part of the Online Project management Certification Program at UC Davis Extension (Past 5 Years)

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