vb.net barcode scanner programming 12: Project Procurement Management in Software

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12: Project Procurement Management
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Is an Oral Agreement Legally Binding
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There is an old saying an oral contract isn t worth the paper it s written on, which is so true It can be very difficult to prove an oral contract exists without documented proof of the agreement With an oral agreement or handshake, one party may be unable to enforce the agreement or may be forced to settle for less than the original bargain The solution is to draft a contract (or agreement) It is good practice to always make some sort of written document, signed by both parties, to clarify the key terms of an agreement
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Definition of Procurement
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Procurement is the acquisition of goods and/or services Generally, procurements are acquired via a contract or agreement A simple procurement however, may not require contracts, formal agreements, or purchase orders Complex procurements should involve finding vendors or suppliers who are willing to establish a long-term buyer/seller relationship Almost all purchasing decisions include factors such as price, shipping, and delivery, quality of goods and/or services, benefits, and payment processing Procurements may also involve making buying decisions that make use of economic analysis methods such as cost-benefit analysis, cost-utility analysis, and risk analysis:
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Cost-benefit analysis Involves looking at the total costs and all the benefits of a decision, then weighing the pros and cons to determine before the decision is made if the planned action is beneficial Cost-utility analysis This method is often used as a basis for procurement decisions using a common unit of measure (for example, quality of life in health care, or money) This method tends to provide a more in-depth analysis of total benefits over cost-benefit analysis Risk analysis This method identifies and reviews the factors that may jeopardize the success of a project It can also help the project team identify preventive measures to mitigate the risk (reduce possibility and the probability or impact) should the event occur
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Contracts and procurement processes can be performed by the project manager, a centralized department, or organization, or may be divided or spread over a number of
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Centralized Contracts/Procurement Advantages
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Standard processes Volume discounts Consistency Support experts including legal
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Decentralized Contracts/Procurement Advantages
More PM flexibility Quicker acquisitions Less bureaucracy Less overhead cost
Disadvantages
Less flexibility Rigid bid process Bureaucracy Administrative cost
Disadvantages
Unclear processes Higher prices Inconsistency Limited support, increased liability
Table 12-1 Differences in the Procurement Organizational Structures
different resources in the project organization The most common organizational structure for managing contracts and procurement is through either a centralized structure or a decentralized structure In the case of a centralized structure, the processes are managed within a specific department or group within the organization that specializes in the processes needed to carry out this role In a decentralized structure, the work is often performed by the project manager Clearly, there are advantages and disadvantages to both structures Table 12-1 lists some of the differences
Role of the Project Manager (Buyer or Seller)
The project manager can perform the role of either (or both) the buyer or the seller in a procurement transaction For example, the PM may be the seller of project management services to a project sponsor (customer) and in turn contract for outside services from another group or company (in which case the PM is also a buyer of vendor/supplier services) Regardless of which side of the fence you are on, it s always a good idea to understand the other side s perspective and responsibilities from a PM standpoint
PMI tends to view the project manager as the buyer in the buyer/seller relationship Also, note that on the PMP exam the Project Procurement Management knowledge area can be difficult for people who have little experience in dealing with contracts or procurement It is good to have real-world experience; however, you need to look at this knowledge area from PMI s perspective as covered throughout this chapter
As a project manager, you will need to determine which products/goods/services will be needed from outside the project team As always, the procurements needed are totally dependent on the size, type of project, and staffing requirements (skills and people available) on the project
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