Procurement, like any function, has to run or support many different kinds of projects. To be a best-in-class business function, procurement has to plan and execute well, engage with stakeholders and consistently show that the vendors being selected are providing the best overall value to the organization.
That’s why project management is such a critical part of the procurement function. As procurements increase in size and complexity, there are simply more activities, stakeholders and risks that need to be identified and managed. Having a Project Manager integrated into the procurement process significantly increases the odds of not only a successful procurement, but also a successful implementation.
Sometimes the procurement department has the necessary skills and resources on their team to provide the requisite project management support. However, many organizations have a decentralized procurement function so the Project Manager comes out of the Project Management Office (“PMO”) or as part of an outsourced PMO function. Regardless, here are six important responsibilities the Project Manager undertakes in the procurement function.
- Initiating the Project. When there is a new procurement, a Project Manager should be assigned so they can kick off the procurement project. This includes getting the initial stakeholders together to understand the scope and objectives for the procurement, and to discuss high level expectations and timelines for the project.
- Creating the Procurement Plan. Establishing a comprehensive procurement plan is an important role the Project Manager plays to define expectations and align stakeholders. An effective procurement plan covers not only the process for procuring the software/services, but also the post-procurement activities required to effectively transition into the business operations. The transition plan may not come until after a vendor/solution is selected, but it’s a critical part of the overall success of the project as that’s where the rubber hits the road.
- Coordinating Internal Stakeholders. Large, complex procurements nearly always have many internal stakeholders. This starts with the Business Owner who initiated the procurement and the personnel who will actually use the software/services, as well as other stakeholders from information technology, information security, compliance, legal and finance. The PM’s role is to ensure that all relevant stakeholder groups have been identified, and that they are engaged at the appropriate times throughout the procurement process.
- Coordinating Vendors. In addition to coordinating your internal stakeholders, your vendors need coordination too. Multiple vendors may be involved during the procurement process, and each vendor may have multiple personnel involved. The Project Manager’s role is to ensure each vendor has identified their own project manager who will serve as the single point of contact throughout the procurement, and to coordinate with those PMs to schedule meetings and demos, obtain proposals, get questions answered and facilitate the contracting process.
- Communicating Responsibilities and Updates. Keeping all stakeholders on track during the procurement process is a necessity if you want to hit your deadlines. The Project Manager is responsible for determining what information is important to communicate, collecting that information from the appropriate stakeholders, and packaging and distributing it at the right times. Weekly email updates, project status reports and face-to-face meetings are all forms of communication channels that the Project Manager can use throughout a lengthy procurement project.
Supporting Implementation and Transition. Once the procurement is complete and a contract has been signed with a vendor, the Project Manager plays a critical role in supporting the Business Owner during implementation of the project and, ultimately, transitioning the software/services into operations. The PM assumes many of the same responsibilities as during the procurement process such as planning, coordination and communication, but is now focused on implementation of the solution rather than selection of the vendor. The PM also provides a bridge between the procurement process and the implementation process, ensuring that there is a continuity of knowledge and expectations throughout the entire cycle.
Author: Tom Rogers
Job Title: CEO
Organization: Vendor Centric
Tom is the founder and CEO of Vendor Centric, he has been a trusted advisor to nonprofit organizations for 30 years, with a focus on helping them align the right people, processes and systems to mitigate third-party risk and drive more value from third-party contracts and relationships.