From the October 2022 print edition
Someone once defined to me a “procurement professional” as someone who does meticulous guesswork based on ambiguous data and achieves unrealistic expectations under impossible deadlines.
And while I love this definition, the truth is that there are some unsung heroes who play a big role in getting the procurement professional to that end goal, especially as it pertains to successful IT procurement, deployment, and the steady state mode. Those unsung heroes are found in the project management office (PMO), and as project managers they help procurement and supply chain practitioners to coordinate resources and activities while improving productivity and performance.
A strong partnership between procurement and the TPRM starts at the planning stage of a project before procurement goes out to market in search of the new vendor or technology. As with most IT projects, there are numerous lines of business, with different business requirements and different priorities, that are all equal stakeholders with vested interest in the success of the project.
This is where strong project management skills really come into play. Project managers will coordinate the input of business requirements from all of the relevant stakeholders, and work with procurement to bake those requirements into the RFx, assigning particular weighting to each of them depending on the business needs.
Upon the conclusion of the RFx, procurement will partner with project managers to review the submissions, select the shortlisted vendors, and create vendor scorecards, based on the specific criteria that includes the business requirements. Those vendor scorecards are used as the objective way to select the final vendor based on the ratings provided by all relevant stakeholders – a process that project managers manage very well.
Stay in touch
Communications are crucial during any new project. That’s especially true regarding anything that touches IT. With so many moving pieces at any given time, project managers play an integral role in managing communications across many different internal stakeholders: from coordinating meetings, publishing minutes, and keeping track of action items, the goal is always to ensure that all the relevant stakeholders know the progress of the project, understand any potential roadblocks and mitigation strategies, and have the ability to voice any concerns that might arise.
By having the PMO tightly manage all the internal communications, organizations reduce or even eliminate any potential for misunderstanding, and underrepresentation of all stakeholders, which in turn decreases the potential for conflict.
Most IT related projects are subject to scrutiny by the enterprise risk management (ERM), in addition to procurement’s third-party risk management (TPRM) processes. This is where the PMO and procurement strategy becomes “divide and conquer.” Both ERM and TPRM processes are often done simultaneously; PM will spearhead the ERM process while procurement will take on the TPRM, to ensure that both are completed correctly, independently, and without adding to the project timelines.
Assuming that all of the steps above are satisfactory, the next step is to select the vendor. And while procurement plays a major role in guiding this decision-making process, the PMO ensures that all relevant stakeholders have a seat at the table and participate in the decision making. Depending on the size of the IT project, the list of stakeholders can vary. Nevertheless, it is important for the success of the project to ensure that the decision is made based on everyone’s input and feedback, ensuring consensus, buy-in, and ultimately, the success of the project.
Once the vendor is chosen, procurement takes on the contract negotiations, considering not only terms and conditions of the agreement, but also clearly defining the scope of work, timelines, cost, and SLAs, among other things. In parallel, the PMO embarks on ensuring that adequate resourcing is available internally to support the project through all stages of new technology deployment. In addition to the resource planning, the PMO manages the project budget, factoring in the negotiated external costs and the much harder-to-manage internal costs of new technology deployment. During this process, procurement and the PMO must maintain clear lines of communications, in order to ensure that any changes to scope, cost or timelines are reflected in the vendor agreement.
It is usually at this stage of the project, that procurement and the PMO partner on a vendor communications strategy, as it pertains to onboarding new vendors and/or offboarding the incumbent. Such conversations can be very delicate, depending on the circumstances around which the project was initiated. Procurement will ensure that the termination and handoff process of the incumbent, coincides with the onboarding and deployment process of the new vendor, while the PMO ensures that the internal relationship managers are aware of, and in agreement with, what is being communicated to the vendors, there is a change management plan in place, and the change is supported by the internal resources, business processes and relevant stakeholders. The end goal being business continuity with no or minimal disruption to the end users.
As the final step, a PMO partnership allows procurement to hand off the project to a trusted team that has all the relevant background information on the solution, vendor, contract, SLAs, timelines, and so on, once the contract is executed, the vendor is onboarded, and the work has begun.
So, the unsung heroes, also known as project managers, can be defined as individuals who perform precision guesswork based on questionable data, and somehow manage to pull it all together into a cohesive plan that they own until the goal is achieved. A strong partnership between the PMO and procurement ensures smoother IT transformation with new vendors and/or technologies, while improving the productivity and performance of everyone involved in the project.