Why Project Managers must have Procurement Knowledge
Managing procurement and contracts is critical to different industries whose projects require outsourcing of goods and/or services. In those cases, procurement is one of the key components involved in projects. It is important to streamline procurement processes efficiently as they are critical to ensuring that every project is completed within estimated timelines and budget. Therefore, project managers must know the right ways to explore the processes and how to extract the maximum benefit out of procurement and contract management in projects.
Aligning the resources and capabilities between the vendor/supplier and client companies can often be challenging for project managers. PMPPC or theProject Management Professional in Procurement and Contracting course by International Purchasing and Supply Chain Management Institute (IPSCMI), USA highlights Project Management and its relationship to Procurement and Contract Management.
High demand across industries
The PMPPC training is immensely beneficial for businesses under large and SME categories from different industries. Sectors having a heavy demand for project managers with advanced skills in procurement and contracting include:
IT and Technology
How can procurement affect project management
Not being able to complete projects within time and budget due to a lack of experience in procurement and contracts handling can incur heavy losses for companies. Managing the procurement and contract processes of a project can get lengthier if not planned and executed strategically. In addition, the possibilities of vendor management constraints are also not uncommon.
Thus, project managers must ensure that resources or services are purchased and procured at the right time and right price and are within the terms and conditions of the contract. Project managers must be vigilant when it involves sourcing materials/services without any kind of dispute and error that may lead to delays in schedules, and additional expenditures.
When dealing with procurement processes, Project Managers must be well aware of the concepts of acquisition, contract, and procurement management.
Procurement process tips for project managers
The below tips will help project managers determine which bid and partnership are more beneficial for the project.
Evaluate your requirements
Before ordering or purchasing materials or services, project managers need to do careful research on what types of products are available and which of these would best match the project requirements from both performance and price points.
Plan in advance
Be prepared with sufficient information so that you can shop wisely. Creating a purchase order or requisition citing all goods/services before starting the purchase is highly recommended.
Get best prices
Good market research will help you in negotiating prices with suppliers. Make sure to clarify all terms and conditions in the contract to avoid any heavy penalties in the future course of the project. Professionals with PMPPC certification will any day have a better grip on the procurement and contract management areas over their non-certified peers.
Send immediate requests for quotations
The earlier project managers send request for quotes to different supplies, the better. This will pace up the bidding process and help you in price comparisons and negotiations.
How procurement and contracting training benefits project managers
There are ample benefits of procurement and contracting knowledge and skills for project managers.
Be it initiating the project plan and checking contract requirements, or maintaining project milestones and deadlines, or maintaining stakeholder coordination or abiding by the standards and regulations, etc., project managers have multiple responsibilities to fulfill. A hybrid model of Project management training and procurement training will help project managers to carry out these tasks efficiently.
Effective resource management
Project managers armed with procurement knowledge are adept in using resources competently. Efficient management of resources is key for project success. Supplies and suppliers must be identified in early stages of project so that everything is available on time, thereby saving time and money. Inefficient resource planning and management can result in wasting resources and money.
Strategic integration of Project Management and Procurement insights will allow project managers of organizations to negotiate good material and service contracts at the right price, thereby, increasing chances of good quality products. This is beneficial for all stakeholders involved in the project.
A comprehensive understanding of product/service pricing and quality gives you the advantage of negotiation. Procurement knowledge enables project managers to understand the different types of costs involved in a project, something very crucial for businesses in terms of profitability. Remember, careful negotiations are a great way to stick to budget without compromising on quality.
Proper and timely communication between teams, including all stakeholder parties involved in the project is very important for the smooth functioning of project. Project managers aware of how the procurement and contract processes work can establish better coordination, control vendor management and keep every party updated on requirements, issues and solutions.