Guide: Procurement Management in Project Goverance

Procurement Management is a core area in Project Management and involves the process of purchasing or acquiring the goods and services needed from outside organizations.

Why is it important? Procurement management directly influences a project’s cost, schedule and overall success. Especially in large projects, inaccurate procurement can lead to substantial financial loss and project delay.

What is it? Procurement management involves procuring goods and services from external sources by establishing requirements, identifying potential suppliers, conducting a competitive bid process, negotiating contracts, establishing payment terms, and managing the supply contract.

How does it work? It works hand-in-hand with other project management areas such as risk management, scope management, integration management, etc. Procurement management involves identifying procurement needs, preparing solicitations, obtaining responses, selecting a supplier and administering the contract.

Exam Tips: Answering Questions on Procurement Management Understanding processes, key terms and concepts related to procurement management will help in answering procurement management questions. Ability to apply theory into practice can be critical in exams, so scenarios are often used in questions. Tip 1: Pay attention to the kind of contract being used, as it influences risk levels. Tip 2: Consider the ethical implications of the scenario presented. Tip 3: Understand the difference between procurement management and purchasing.