Project Procurement Strategy, Factors, and Decision-Making Report

This report provides a comprehensive analysis of project procurement strategies, divided into four key tasks. The first task identifies and describes various procurement strategies, including outsourcing and innovation, alongside their objectives, processes, and expected outcomes. The second task delves into the factors influencing procurement strategy, such as legal, technical, and contextual elements, emphasizing their impact on procurement planning. The third task focuses on procurement strategy decision-making tools, exploring objectives, limitations, and opportunities. Finally, the fourth task presents scenarios related to procurement strategy, offering insights into their application. The report emphasizes the importance of smart procurement strategies, supplier selection, and the use of decision support tools like the Strategic Purchasing Process. It also highlights the significance of legal aspects and contract law in project management, providing a valuable resource for understanding procurement planning and procedures.

Running head: PROJECT MANAGEMENT
Project Management
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Executive Summary
The following report is based on the discussion of the procurement planning process and the
procurement strategy adopted by the different kinds of the business organizations during the
implementation of a business project. The presence of the procurement panning process helps
in the proper adoption of the best policies that are important for the success of the business
organization and important for the project management process in a strong and efficient
manner. The report is divided into four different tasks. This includes the different prospective
and factors related to the procurement planning. The first task has discussed the different
strategies are adapted by the business organizations to implement the different types of the
business projects. The following chapter has also discussed about the objectives and the
processes that are related to the procurement strategy for a project performed by the business
organizations. The second chapter identifies the factors that are related to the procurement
strategy. The legal and contextual factors have been described in this section of the
assignment. The third chapter describes the procurement strategy decision making tool that is
equally important for the business organization. The limitations and the opportunities of the
contextual factors have also been described here. The last chapter or the fourth chapter has
been based on the description of some scenarios related to the procurement strategy. The
answers to these scenarios has been established in this part of the project report. The report
thus presents a great and informative source of learning for the readers to gain an
understanding on the procurement planning and procedure.

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Table of Contents
Introduction................................................................................................................................4
Procurement Strategies...............................................................................................................4
Identification of a range of common procurement strategies.................................................4
Description of the different objectives, processes and expected outcomes...........................5
Task 2.........................................................................................................................................6
Factors influencing procurement strategy..................................................................................6
Identification of important legal, technical and other contextual factors in business............6
Influence on procurement planning on relative presence or absence of the procurement
planning..................................................................................................................................7
Task 3.........................................................................................................................................7
Procurement Strategy Decision Support Tool............................................................................7
Procurement Objectives.........................................................................................................7
Limitations and Opportunities................................................................................................8
Task 4.........................................................................................................................................9
Key Assumptions to enable selection of the most appropriate procurement strategy...........9
Figure No 1: Process of Selection of Procurement Strategy................................................10
Provide a brief outline on describing the arrival at the preferred procurement strategy......10
Outline of reaching the conclusion......................................................................................11
Conclusion................................................................................................................................12
References................................................................................................................................13

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Introduction
The following report is based on the study of the procurement strategy in projects and
its different perspectives. The project which has been divided into four different tasks covers
the different elements of procurement strategies that are undertaken by the management of
the different business organizations to ensure success. The report has been a success due to
the providence of these different elements in an organized manner.
Task 1
Procurement Strategies
Procurement Strategies are an important part of different kinds of projects and
similarly are highly critical in nature (Christopher Mena and van Hoek 2018). The
procurement strategies helps to provide a range of savings while purchasing the likes of the
raw materials for the completion or start of the project and also ensures that the different
business services and the materials are available at the perfect time and at the perfect place.
Therefore procurement strategies provides the scope for the suppliers as well as the buyers to
support the formation and the implementation of the best innovations. These innovations on
the other hand, supports the innovative process of the organizations undertaking any kinds of
the projects.
Identification of a range of common procurement strategies
For the management of the different kinds of the companies, the presence of the smart
procurement strategies is very much essential. The presence of the proper procurement
strategies is highly essential for the proper and smooth running of the business operations.
The management of all the procurement activities in the most proper and controllable state
helps in the savings of time, money and resources (Dombrowski et al. 2016). The planning of

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the procurement analysis is totally based on the outline of the selected project management
plan that aims to ensure the success of the business in an efficient manner. Some of the major
strategies to identify the procurement strategies are as follows;
a. The outsourcing of some of the most strategic and core business functions can be a
help for the other outsourced companies
b. The selection of the suppliers and arranging for a collaborative outsourcing process
and communication helps the organization to ensure smooth operations
c. Development of the disruptive innovations that can help the organization to change
the game for the good.
Description of the different objectives, processes and expected outcomes
The use of the procurement management forms a key component of the different
business projects. The procurement from the buyers to the sellers is one of the most common
processes in a proper and successful manner. The description process for the successful
procurement strategy are as follows;
a. Specification and planning-The management of the business organization must
make sure that there is a comprehensive plan that first of all meets the requirement of
both the buyers and the sellers. The internal and external planning is presented here
that helps to make the operations of the business totally smooth in nature.
b. Identification of the suppliers and selecting them accordingly- The identification
of the suppliers is a scientific process that is done mostly through the implementation
of the procurement policy (Dombrowski et al. 2016). A detailed research on the actual
capability of the identified suppliers must be undertaken in order to gain a clear
understanding on whether, the suppliers are able to meet with the demands of the
organization. The criterion for the selection of the vendors includes cost, quality

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offered, time of delivery, responsibility, safety, service ceiling and many other such
similar factors.
c. Request, negotiate and contract- The proposal for the request needs to be provided
to the identified suppliers to gain an idea on the exact time and type of the delivery.
The negotiation process of the organizations also starts at the same time involving the
management of the organizations and the suppliers of the business. It is important for
the selection and negotiation of the different business processes through the
application of the procurement strategies.
d. The measurement and analysis process- The use of KPI’s is seen in measuring the
procurement process for a project. The measurement and key process of delivery
leads to an efficient and cost effective process. The establishment of a cost effective
process is helpful for the success of the organization in a proper and efficient manner.
Task 2
Factors influencing procurement strategy
Identification of important legal, technical and other contextual factors in business
According to, Fleming (2019) the performance of a work within the company and for
any other company is external in nature and is assigned for one’s own performance. The
difference in between this kind of internal and the external work can be described in broad
and general terms. The project managers must have an idea of the different legal prospects
related to the project and thus a legal counsel must be appointed before the start of any kinds
of project for an organization. The legal counsel will act as the direct advisor to the project
manager and will make him aware of the different legal angels and legal problems related to
the project. He will thus basically provide the solutions to these problems and make it easier
for the project manager to execute the project in a simple and efficient manner.

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The most important document for the organization before the start of the project will
be the idea on the contract law. According to, Fleming (2019) the procurement planning and
the planning of the organization totally depends on the contract law that needs to be
formulated before the start of the project and also before the procurement of any kinds of
materials needed for the project. The contract is an agreement between two or more parties
and must be communicated from one side to the other. The mutual assent between two parties
must be present in a contract. Apart from this Agency Law also forms an important law as the
agencies are important for the completion of a project on time.
Influence on procurement planning on relative presence or absence of the procurement
planning
The legal prospects of the procurement planning is highly important for the
organizations that undertake any kind of business project. The undertaking of the business
project needs to be covered by a legal aspect. The projects are itself important legal elements.
The management of the project teams needs to undertake a number of different kinds of the
contracts and agency codes that helps them to establish a trust and efficient performance
network for the completion of the project. The presence of the legal aspects thus helps the
project to move in the right direction and ensure success. The covering of all the legal
prospects in the project can help the business to avoid any kinds of future problems. The
procurement planning becomes easier for the company in the presence of the organizational
elements.

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Task 3
Procurement Strategy Decision Support Tool
Procurement Objectives
The creation of a Decision support tool is highly important for the modern business
organizations in the modern day business environment. The purchasing function of the past
decades has been subject to the focus of shifting the internal strategic balance in the favour of
the organization. The purchasing departments of the organization nowadays carry a critical
role in the realization the overall corporate strategy. According to, Fleming (2019) the
increase in the global sourcing activities and the other elements has helped the organizations
to ensure success and increase performance abilities of the organization. The absence of some
processes that is still unaware to most of the project managers, limits the ability of the
business. The limitation is caused by the fact on how to gain a clear approach towards the
business purchasing. The strategic purchasing process comes to effect in this particular area.
The Strategic Purchasing Process can act as the best supporting decision making tool as it
helps the management of the projects in the organizations to select the right path to glory (He
Huang and Yuan 2016).
The selection of the Strategic Purchasing Process is important as because the strategic
purchasing process helps the organization to address a multiple number of issues and also
help in the development of the internal and external purchasing process. This includes the
likes of the;
a. Category impact on the cost of the firm’s product or service
b. Categorical impact on the perceived quality of the business
c. Categorical impact on the quality of the business organizations internal processes

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This helps to present a strategic importance to the decision making tool and thus improves
the firm’s performance in the market as well as attain a stability in the project performance.
Limitations and Opportunities
The Strategic Purchasing process is surely one of the advanced and important process
of business making tools that helps the management of the business organizations to properly
arrange their business opportunities. However, given the number of different advantages,
there are also important disadvantages of the decision making tools (He Huang and Yuan
2016). The limitations and opportunities constitutes the decision making tools in a proper and
efficient manner. The important advantages of the decision making tool are as follows;
a. The savings in the cost and time is an important advantage for the decision making
tool
b. The continuous development of the project will continue which will help in the
success of the project
c. Continuation of the work flow of the organization
d. Speed of procurement is important for the organization
e. The improvement in the workplace relationship
The strategic management of the business thus helps to provide a competitive advantage
to the business organization. On the other hand, there are a number of disadvantages for the
organization. The disadvantages and limitations of the organizations includes the likes of;
a. There are some of the difficult to find the responsibility for the different errors and
omissions
b. The different parties involved in the contract and proper elements of the organization
c. The presence of the strategic elements can create confusion among the decision
making elements

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Task 4
Key Assumptions to enable selection of the most appropriate procurement strategy
After the selection of a project and the end of the funding and the necessary
approvals, the project procurement unit of the organizations involves themselves in different
forms of business sourcing. The purpose of the identification and the selection of the
appropriate procedures is termed as the best way for the selection of the business processes
(Nojavan Ghesmati and Zare 2016).
A number of different steps needs to be undertaken by the management of the
business in order to consider the most appropriate procurement strategy. The steps are
provided in the figure below;
Figure No 1: Process of Selection of Procurement Strategy
Source: (Reis and Cabral 2015)
Provide a brief outline on describing the arrival at the preferred procurement strategy
The procurement planning will be based on the elements of the marketing and the
strategic elements of the project. A number of different considerations needs to be taken care
by the management of the business organization as because such considerations helps to

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employ the strategic decision making tool in a professional and enhanced manner. The factors
that needs to be considered by the organization are as follows;
1. Time of Completion
2. Project complexity
3. Competition of price
4. Quality of the goods and the services
5. Management and accountability
6. Project Variation
7. Fix certainty of price
Outline of reaching the conclusion
The use of the Request for Proposal is the best method that can be applied in these
process to ensure success. The Request for proposals helps the project managers to gain the
RFP’s from the interested and potential clients and then helps them to assess the total solution
and address the different issues in a structured manner. The request for proposal can be
termed as the best possible selection process as because it helps the organization to assess the
financial components and also assess the quality of the proposal and then select the best
company to lead the project.
Scenario 1
The services of the engineering and construction firm needs to be prepared in a
designated manner. The RFP’s in the following sector will invite companies to submit
proposals to build a quality facility for warehousing and logistics facility. The strategic
decision support tool will help the construction company to select a comprehensive and
scientific strategy that can help the management of the business to ensure business success.
Scenario 2

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The strategic decision making tool will again come in handy for the selection of the
best company to supply the safety materials for the employees. The RFP’s will help assess
the quality of the equipment and also help in the success of the organization in the most
appropriate business manner.
Scenario 3
The RFP’s can be the best strategy for the procurement of new MRI Scanner for the
up gradation process of a remote village hospital. The quality of the MRI scanner needs to be
high as remote villages receives hardly any kind of strong health support. Therefore to
strengthen the health support a proper MRI scanner of high quality can enhance the success
of the project.
Conclusion
The following report has been able to highlight the meaning of procurement strategy
and its importance to an organization. The presence of a proper and efficient use of the
procurement strategy can help in the success of the organization in the most efficient manner.
The presentation of the perspectives of the procurement strategy and the discussion on the
advantages and limitations of the strategy has been one of the learning elements of the report.
The report has also identified a decision support tool which has been essential for the
selection of a procurement strategy. The thorough analysis of the report can thus be said to
help the readers to gain the idea on procurement strategy and its implementation in the
business.