We’ve all heard the nightmare stories told of clashes between procurement officers and project managers. Yet with procurement’s prominent position in worldwide competition today, as well as continued challenges, both communities must work together to best complete the project and meet the needs of the customer.

Projects typically require a whole bunch of “stuff.” And in order to buy all the necessary “stuff,” you need to go through procurement processes, which basically means certain rules and procedures within the organization must be followed. Today procurement’s role is much more cross-functional and involves working with various parts of the enterprise in a much more project-based strategy. Goals are established, teams are set up and results are measured; and driving that kind of work presents a new set of management challenges for procurement.

But, of course, you know all of that.

You likely also know of the nightmare stories that have been told of clashes between project managers and procurement officers, especially in the field of federal project management. Yet project management has taken on an increasingly important role in the success of the acquisition life cycle — and a more visible role with procurement offices. The increasing importance of the project manager to the procurement initiative, as well as the obstacles facing most procurement offices, thus requires a necessary new focus on cooperation rather than confrontation.

A benchmarking procurement study conducted by The Aberdeen Group and Business Finance that assesses the challenges, priorities, capabilities and technologies of procurement programs shows that, while procurement’s strengths lie in negotiation and contracting, weaknesses in costing, process innovation and project management are indicators of procurement limitations and fertile ground for improvement.

According to the latest issue of Government Procurement, “project managers need to realize that they can take positive steps” to avoid escalation of finger-pointing and name-calling, and thus, concentrate on a more successful procurement process.

Often it is simply a matter of educating the project manager.

For businesses worldwide, the steady beat of market pressures continues, IBM Business Consulting’s chief procurement officer (CPO) survey last year said. All at once, budget cuts are common, deregulation and globalization are upsetting the competitive equilibrium, and companies are feeling the squeeze from rising materials costs and, yet, find it difficult to raise prices in a “zero-inflation” world. Meanwhile, the fundamental structure of the corporation is changing. Companies are spending more with third parties and, at the same time, are outsourcing many more functions that historically were performed in-house. Across the enterprise, the increased contribution of suppliers is adding both more value and more risk.

Collectively, said IBM’s report, these factors have elevated the importance of procurement. “Today, perhaps more than ever, procurement has a broad and direct impact on corporate performance. And consequently, procurement performance is prominently positioned on boardroom agendas worldwide.”

Yet, despite procurement’s criticalness to business, GovPro notes, project management must be educated to the requirements and challenges present in the current procurement process:

Between downsizing and attrition, procurement offices are facing staffing problems like never before. In fact, over the last 15 years, the contracting workforce has been reduced by one-sixth — yet the procurement workload has doubled. It’s up to the project manager to keep the procurement office informed — and in a timely fashion — so that procurement can fulfill its role of supporting both the customer and the project manager.

However, procurement can learn from the project management side, as well. The procurement process, of course, is a project in and of itself. “The contract management community, in recognition of the advantages of project management and procurement offices that speak the same language, has begun a push to integrate the skills and techniques of project management into the procurement field,” notes GovPro.

For instance, the program management triad of “people, process, and tools,” when applied both to running an effective procurement and to the post-award program activities, can achieve improved performance results throughout the entire program life cycle. Further, instilling the discipline of program management at the earliest phases of the procurement cycle supports the continued drive toward a results culture. It is no longer sufficient to set up a program management office to oversee the performance of services after contract award. Rather, the procurement workforce must begin to adopt these same disciplined approaches to running the procurement before award. Not only will this approach help to accomplish the procurement on time with better-defined requirements and stakeholder buy-in, it will establish the beginnings of the documentation and systems necessary for managing the contract effectively after award.

Both sides of this equation have to work together to best complete the project and meet the needs of the customer.

Bridging the gap between project management and procurement can be as simple as taking a step back — learning “what” before working on “how.” Everyone has his or her own important role to play in the acquisition life cycle, and recognizing those roles can go a long way toward easing the sometimes-painful relationship between project management and procurement. In the end, success will not happen unless everyone works together.

Sources

Project Management: Partnering With Procurement
by Ed Rinkavage, Patricia Bennis, and Chuck Gault
Government Procurement (story 1), April 19, 2006

Program Management Yields Procurement Success
by Andrea White
Government Procurement (story 2), April 19, 2006

Upfront: Procurement Promotes Competitiveness
by Laurie Brannen
Business Finance, January 2006

Taking Center Stage: 2005 chief procurement officer survey
IBM Business Consulting Services, May 12, 2005

Project management strategies for procurement
by William Atkinson
Purchasing magazine, Sept. 1, 2005