0.11 Project planning  (Page 17/21)

Once you apply all the tools in this process, you will arrive at an estimate for how much your project will cost. It’s always important to keep all of your supporting estimate information, too. That way, you know the assumptions you made when you were coming up with your numbers. Now you are ready to build your budget plan.

Procurement planning

Procurement management follows a logical order. First, you plan what you need to contract; then you plan how you’ll do it. Next, you send out your contract requirements to sellers. They bid for the chance to work with you. You pick the best one, and then you sign the contract with them. Once the work begins, you monitor it to make sure the contract is being followed. When the work is done, you close out the contract and fill out all the paperwork.

You will need to start with a plan for the whole project. You need to think about all of the work that you will contract out for your project before you do anything else. You will want to plan for any purchases and acquisitions. Here’s where you take a close look at your needs, to be sure that you really need to create a contract. You figure out what kinds of contracts make sense for your project, and you try to define all of the parts of your project that will be contracted out.

Contract planning is where you plan out each individual contract for the project work. You work out how you manage the contract, what metrics it will need to meet to be considered successful, how you’ll pick a seller, and how you’ll administer the contract once the work is happening.

The procurement management plan details how the procurement process will be managed. It includes the following information:

• The types of contracts you plan to use, and any metrics that will be used to measure the contractor’s performance.
• The planned delivery dates for the work or products you are contracting.
• The company’s standard documents you will use.
• How many vendors or contractors are involved and how they will be managed.
• How purchasing may impact the constraints and assumptions of the project plan.
• Coordination of purchasing lead times with the development of the project schedule.
• Identification of prequalified sellers (if known).

The procurement management plan like all other management plans becomes a subsidiary of the project management plan. Some tools and techniques you may use during the procurement planning stage include make or buy analysis and defining the contract type.

Make or buy analysis

This means figuring out whether or not you should be contracting the work or doing it yourself. It could also mean deciding whether to build a solution to your problem or buy one that is already available. Most of the same factors that help you make every other major project decision will help you with this one. How much does it cost to build it as opposed to buy it? How will this decision affect the scope of your project? How about project schedule? Do you have time to do the work and still meet your commitments? As you plan out what you will and won’t contract, you need to have thought through your reasoning pretty carefully.