When you’re working on a project, it’s not uncommon to discover that you need certain materials or services in order to successfully complete the project. In order to stay within budget — and deliver the project on time — you need to develop a plan for fulfilling those needs. Your best bet is to use a four-step process for developing a procurement plan that can easily be transferred to even simple project management software.
Step 1: Decide What to Procure
Sometimes, the decision about what to procure is made for you: You need a product or service in order to finish the job, and you simply do not have it in-house. Other times, the decision isn’t so clear cut. Perhaps the necessary parts you need can be produced in-house, but at increased cost, or the service can be provided by your employers; however, maybe key personnel is on vacation or lacks the technical know-how necessary to get the job done.
As you are designing your project procurement plan, you need to look carefully at all of these issues and decide which items or services need to be procured from outside your organization. A good plan requires more than simply stating “We need X,” and expecting it to be purchased. As you make your list, consider the justification for the procurement, the expected cost and the deadline and incorporate that information into your plan. In addition, consider alternatives to the items you don’t have on-hand. In some cases, the plan can be adjusted or additional personnel or items can be utilized to eliminate the need for procurement or lower costs.
Step 2: Choose Your Vendors
Vendor selection and management is an important part of the procurement process, but it is something that is often left to chance and based on past experiences. Many organizations choose vendors because of an existing relationship or because they offer the lowest price without actually making sure that the vendor meets the needs of the particular project.
Once you have a comprehensive list of what needs to be procured, begin the vendor selection process. Price is always a concern, but you also need to consider whether the vendor can deliver the product or service within the required timeframe, whether they can deliver a quality product and whether their cost and reputation are in line with your needs. In some cases, you may find that the vendor offering the lowest price can’t meet your deadline or offers a product that doesn’t meet your quality standards.
When you have selected a vendor, it’s imperative that the project manager, or his or her representative, stay in contact with the vendor and ensure that the product or service is on track for the agreed upon delivery. Part of the procurement plan should be assigning this responsibility, and also developing contingency plans should something go awry.
Step 3: Assign Roles and Responsibilities
Beyond determining who will manage the relationships with vendors, it’s important to determine other team members’ roles and responsibilities within the procurement process. For example, a team member may be responsible for working with an outside contractor to manage the workflow or for researching potential vendors for a part or service that has never been procured before. The procurement plan must specifically outline these responsibilities, including deadlines.
Step 4: Lay Out Contract Requirements
Once it is clear what you need and who will be responsible for procuring it, the final step is to lay out the contract requirements for vendors. These requirements may be determined by company policy, especially in terms of payment and invoicing. In any case, the contract requirements section of the procurement plan should outline which contracts are to be used and any other important information required for managing the procurement process.
Developing a procurement plan early in the project management process is a vital step in ensuring that your project proceeds in a timely manner and that there aren’t any unpleasant surprises along the way. While no plan is entirely foolproof, and unforeseen problems can arrive, taking steps to account for and address those circumstances ahead of time keeps everyone on the same page and increases the likelihood of a successful project.
About the Author: Project management specialist Lisa Graham has worked with more than a dozen Fortune 500 and Fortune 1000 companies. When she is not consulting on project management plans and issues, she writes about project management for several blogs and news outlets.