Solidifying Your Project Procurement Management Plan

Not all projects require procurement of goods and services. However, projects requiring procurement need an additional level of planning to avoid the common failures and pitfalls of determining, awarding, and managing procurement activities. By carefully planning and developing a Procurement Management Plan, project managers can ensure that all procurement activities are appropriately managed throughout the project lifecycle. The following considerations can help solidify your approach to developing your Procurement Management Plan:

1. Identify Procurement Risks

Risk management is an integral part of successfully managing a project. It is also a key component of understanding and managing procurement activities associated with a project. When an organization makes the decision to procure goods or services it opens the door to a whole new set of risks which must be carefully identified and managed. These procurement risks must be identified, documented, analyzed, and managed in the same manner as other project risks and included in all project risk management documentation.

2. Develop and Utilize Standard Procurement Documentation

Procurement management, like other project management knowledge areas, is extremely dynamic and complex. Because of this, there is great benefit in simplifying and standardizing these activities wherever we can. Many organizations develop and use standard procurement forms, formats, and templates for creating their procurement documentation. Some examples of standardized documents include:

  • Statement of Work
  • Non-disclosure Agreement
  • Request for Proposal
  • Letter of Intent
  • Source Selection Evaluation Forms
  • Lessons Learned Forms

By standardizing these documents, an organization can simplify its procurement activities and focus more on detailed planning and procurement management activities

3. Developing Clear Decision Criteria

Before convening a contract review board and reviewing proposals, an organization should ensure that it has developed and documented clear decision criteria to evaluate proposals and award a contract. These criteria are heavily dependent on the type of procurement required by the project, however, failure to determine these criteria ahead of time can result in a lengthy and inefficient selection process.

4. Establishing Procurement Roles and Responsibilities

In many situations there may be gaps or overlap in who manages procurement activities. Often times, an organization may have a contracts department which is involved in procurement activities along with the project manager and team. In situations like this there can be confusion and blurred areas of responsibility. It is extremely important that these boundaries are established and documented as part of the Procurement Management Plan and that the organization’s management approves.

5. Procurement Performance Metrics

Any procurement of goods or services requires the project team to develop metrics against which they measure performance. Like decision criteria, these metrics are dependent on the type of procurement that was conducted. Also, while the project team may have project metrics against which performance is measured, the contracting or purchasing departments may have different performance metrics. Careful consideration must be given to the development of these metrics as they may help determine various impacts to the project. Additionally, once the project is completed, these performance metrics may be used to select vendors or service providers for future procurements through a past performance database or evaluations.

Why start from scratch when you can use our Procurement Management Plan template and tailor it to your own project? See this and my other project management templates and plans at my website www.projectmanagementdocs.com.

Project Management in Russia

Project management, in its wider and more general meaning, is nothing new to Russia. Projects of all sizes and scopes have been managed successfully throughout history. Large scale construction works, hydro power plants, huge industrial plants, mineral and coal mining all involved mega projects. Though not sophisticated to the level today we are thinking of, about projects, they all were projects managed well.

During the Soviet times, much valuable knowledge and experience about project management was accumulated. Russian project managers developed PM methods which were comparable or even better than western ones. One good example is the patent chain models developed by G. Pospelov, V. Barishpolts, V. Rudomanov, B. Wigman, N. Komkov which were claimed to be more flexible and functionally superior to existing models. However, most of them were not widely applied in practice. It was only after the collapse of the Soviet Union that sophisticated Project Management systems were beginning to have demand in Russian economy.

Now in Russia there are two professional bodies – the Russian Project Management Association acronymed SOVNET, and American-based Project Management Institute (PMI), as well as a number of academic institutions and consulting companies that actively provide training, consulting, seminars, certification and other activities.

Thanks to the effort of these organizations, now in Russia, there are a number of professional project managers with relevant professional experience and education. These project managers help develop and maintain project management as a professional field. The situation is improving and there are signs of progress though it is not in keeping with the growing demand. But, Russian project manager hopefuls will always have a brighter future in Russia than elsewhere in the world.

Of Course, there are some challenges that need to be tackled in the Russian project management profession before it becomes a fully fledged professional system that can contribute to the productivity and growth of any industry. Some of these challenges lie outside the project management profession and others are within the system itself.

First, it is common to blame the universities and other educational institutes as providing rather less standard education and training in project management in Russia. At times, these institutions are branded as doing anything for money. But a closer analysis of the situation will reveal another aspect of the problem.

Russian top managers lack proper understanding of project management and most of them do not have any formal management education and relevant knowledge. They attempt to compensate their poor management skills by enforcing a military style command structure in their organizations. This trend coupled with poor and inadequate instruction lead project managers to frustration and poor productivity on the one hand.

On the other hand, project managers are appointed for works that they are not qualified for or trained to carry out. In Russian companies, one can still commonly find that a person’s job title does not properly reflect his actual work. It is not uncommon to find in russian companies, those holding the title as project managers having their normal duties in a completely different field and others who have nothing to do with project management appointed as project managers. The reason is top management’s heavy reliance on command type administration and management in which an employee’s talents, skills, education and training are not so relevant.

As a result, only a small fraction of projects are managed in a classical western style while a majority of them suffer poor management. Furthermore, projects, especially IT projects, are often considered as ‘technical’ work that does not require management input in a scientific way.
It is very rare to see good budgeting, scheduling or setting up of milestones in practice. Finally, a lot of projects are not finished on time and they become mere processes.

Fortunately, the situation is changing or at least shows signs of change for the better. More companies than ever before are realizing the importance of scientific project management and ever increasing number of them are applying the principles of scientific PM in their projects on regular basis.

Typical project manager in a Russian context can be described as a male of 30 – 45 with education in the field in which the project is concerned – if it is IT, an IT specialist – and some management education with knowledge of all processes and technical issues of the project.

In the hiring process, employers show clear preference for male candidates but in certain spheres, women are also considered suitable as project managers. Increasing number of women are starting as project managers in the commercial sector. Female project managers in Russia have shown to be equally capable as project managers as their male counterparts.

Russian business environment with its less well developed scientific management approach and its reliance on traditional type of management style makes a project manager’s job more challenging and demanding than in a western economy.

Unstable economy accompanied by frequent crisis, currency instability, unreliable forecasting of inflation all adversely affect the professional project manager’s role. Project managers in Russia must know the market very well. He must know if the supplier or partner is reliable enough. Common situation for many russian companies is the delay in performing obligations. It is absolutely true that there are many occasions where business without bribe is simply impossible. If project requires to obtain numerous licenses and certificates, communication with government officials often is included as major part of the project manager’s duty in Russia.

Nevertheless, Russian scene of project management shows a lot of promise and potential. With continuing developments in the economy, business and management practices in particular, it is not being overly optimistic to say that project management will have a brighter prospect in modern Russia.