Procurement As a Project Manager: What to Consider When Managing a Key Initiative

Procurement is primarily responsible for the acquisition of goods and services from third-party sources. However, the department has begun playing a much larger role in initializing, managing, and finalizing projects within the company. Not only must procurement leaders work to identify and procure goods and services, but they must also strategize with other decision makers to onboard new vendors and solutions.

Procurement needs to consider several factors before managing a new key initiative. Here, we’ll explore some of the most important aspects of a project to pay attention to.

Formalizing the Project’s Objective

The scope of a project can grow exponentially if it doesn’t have a clear and documented objective.

Defining the objective allows stakeholders to work together and better understand their roles in completing the task. Additionally, it helps teams manage expectations by providing a clear understanding of what needs to be achieved, allowing them to develop realistic timelines and budgets.

An objective could be as simple as successfully onboarding a new IT solution, or it could be measured via metrics like cost savings or efficiency improvements after implementation.

Identifying Suppliers, Partners, and Vendors

Procurement can identify the right suppliers for a new project by researching potential vendors, asking for referrals from trusted contacts, and evaluating each supplier's capabilities. It is important to consider factors such as reputation, cost efficiencies, quality standards, delivery times, and payment terms to determine which supplier is the best fit.

With the right tools and processes, the procurement department can be a critical function in managing a new project by providing stakeholders with recommendations for vendors and products.

Managing Risks and Negotiating Prices

Managing risk is a multi-faceted approach that requires leaders to set expectations (both internally and externally) and to identify potential risk factors in every step of the project.

For example, procurement should conduct thorough background checks of suppliers to ensure they meet regulatory requirements and can fulfill all contractual obligations. Suppliers working on the project should be onboarded accordingly, so procurement teams can obtain visibility into their operations and their compliance procedures.

Of course, financial risk must also be managed. Contract negotiations will be critical in maintaining the budget of a new project, as excess spending could harm the success of the project. Thankfully, procurement is in the best position to engage in contract negotiations with key suppliers.

Developing a Timeline

Like seeing clear objectives, developing a budget and timeline will be crucial in establishing the scope of a new project. Procurement can work alongside their supply partners to make predictions about the timing of key initiatives.

For example, technology components must be sourced from overseas, procurement can monitor the supply chain to determine delivery times. This type of data is crucial to ensure the project can be completed on time.

Coordinating with Other Departments

Procurement can coordinate with other departments to complete projects by establishing clear communication protocols and developing clear processes, including hand-offs. Procurement leaders should ensure all stakeholders are aware of their roles and responsibilities, as well as any expected goals, outcomes, or deliverables.

Additionally, regular coordination meetings should be scheduled to review progress and address any open issues or problems encountered throughout the project. Leaders can even leverage data-driven performance reports to track the success and completion of each project.

Don’t Miss ProcureCon IT Sourcing

Procurement is playing a much larger role in managing company-wide projects. This increased responsibility requires additional expertise, especially when it comes to technology.

To learn more about managing procurement projects, don’t miss the ProcureCon IT Sourcing event happening from June 26th-27th at the Marriott Copley Place in Boston.