Chapter

14

PROCUREMENT MANAGEMENT

More IT projects are contracted out today than ever before. Business and agency staffs have become more lean than in years past as those entities have wrestled with uncertain markets and tax bases. Agencies and businesses no longer have the technical and support staff to spare for large project teams, and they cannot afford to train and maintain staffs of qualified IT project managers. As a result, they contract out IT projects in total or in part. It is an act of convenience that makes good business sense but also carries a certain degree of risk.

Q1 What is procurement management planning and why is it so important for IT projects?

Procurement management planning addresses the acquisition of services and things needed to complete an IT project. It may include the purchase of hardware, software, consultant services, project management, and personal services of all types. The discipline of procurement management planning includes all the processes needed to plan and execute procurement transactions for an IT project.

The procurement management process includes developing and executing a plan that addresses the following topics:

•  Identifying which project needs can best be met by purchasing or acquiring products, services, or results outside the project organization

•  Developing plans for defining procurement requirements

•  Identifying potential sources for the required goods or services

•  Publishing requests for proposal or quote to initiate the procurement process

•  Identifying and selecting the best value offered by responding vendors

•  Awarding a contract for the purchase

•  Monitoring and controlling procurement activity from planning to delivery of the product or completion of the services

•  Closing out the procurement activity.

Q2 Which comes first—the request for proposal or the procurement management plan?

Requests for proposal (RFP) and requests for quote (RFQ) are tools developed to execute an IT project’s procurement strategy. From that standpoint, it is essential that the plan precede the RFP or RFQ. Doing so ensures that those documents benefit from the project team’s deliberate consideration of the project’s full range of procurement needs and how best to go about meeting those needs. Without engaging the procurement planning process, opportunities might be overlooked to bundle procurements, achieve economies of scale, or manage highly risky procurements with the detail necessary to ensure success.

Q3 Why do IT projects have so many contractors, who come and go, on the project team?

IT project resources can be costly commodities. Many organizations deliberately bring them on to support a project and cut them loose when the need has passed to avoid the cost of maintaining those resources on staff when they are not otherwise needed. It is good economics in an industry notorious for its high human resource costs.

Planning the acquisition and release of contract resources for an IT project is similar to planning the assignment and release of project resources acquired from within the organization. Project tasks are identified and scheduled; resources are assigned; and, in the case where resources are not available from within for any reason, those needs are contracted from outside the organization.

It is important to remember that contractors are people who have needs and complexities similar to those of the resources assigned to a project team from within the organization. When they come onto a project, contractors need time to ramp up their knowledge and understand the project’s vision, objectives, and team culture. As they prepare to depart, they need to pass on their knowledge to those who will remain behind. Time should be programmed for contractors to accomplish these tasks, just as it is for internally acquired project resources.

Q4 Is it okay for an outside contractor to manage an IT project for an organization?

Organizations commonly contract for the services of IT project managers. Those agencies and firms might do IT projects on a relatively infrequent basis. In such circumstances, it makes sense to bring on transient resources to fill the skill set void when an IT project is being considered. Retaining qualified IT project managers on staff during the long periods between IT projects would be costly and make little sense.

When a contract project manager is assigned to manage an IT project for an organization, it is critical that the person work directly for the business manager or executive for whom the system will be implemented. That reporting relationship ensures that the organization’s goals and objectives are appropriately considered by the project manager and enforced by someone organic to the organization. It also provides an opportunity for timely decision-making when matters of organizational policy that are beyond the purview of the contract project manager must be addressed.

Q5 How do you verify that your contractors have the skills they say they have?

Anyone can craft a resume or business brief that looks good, but it is not until the task is at hand that we often fully understand a resource’s true abilities. Four major approaches can help ensure a contract resource has the skills needed for a project:

•  Reference checks—Require that a candidate provide contact information for people for whom he has worked and used the skills needed for the project. Call those references and get their opinion of how well the resource performed on their project. Beware of contacts who refuse to provide a reference; this is tantamount to saying that the resource performed poorly in the past.

•  Certifications—Numerous types of technical and nontechnical certifications are available for potential project resources, including those offered by Microsoft, the Software Engineering Institute, the Project Management Institute, and others. Requiring proof of certification is a good way to determine whether a candidate has at least enough education and experience to pass a certification exam. Note that certification is not the final determinant for whether a person is qualified for a job. It does indicate that the candidate has gone to the trouble of studying a specific aspect of software design, development, or project management to the extent that she can pass a comprehensive examination.

•  Technical skill tests—Many organizations are resorting to hands-on testing of resource skill sets. It is common for a person applying for an administrative assistant position to be tested for his ability to use common office software to prepare correspondence, complete email, and set up a simple spreadsheet. Why not ask a software developer to construct an object, analyze a database model, or troubleshoot a small system? If the test is set up by a knowledgeable professional, it can provide excellent insight regarding the candidate’s potential as a skilled project team member.

•  Communication skills tests—Many people say they can write, run a meeting, or relate to others in a group setting. Unfortunately, those are often the most challenging skills to find in potential IT project team members. Education standards around the world vary greatly, and the diversity of our culture, while offering a great opportunity to provide multiple perspectives for any problem, can create language barriers. It is essential that any potential member of a project team, and in particular those who will lead the project or a portion of the team, have good communication skills.
Be sure to test communication skills before hiring or contracting for a resource by asking candidates to compose a short letter on a laptop computer or provide copies of written deliverables for the selection board to review. Engage the candidate in an impromptu discussion and assess her ability to speak thoughtfully and clearly on a variety of topics. Rate the candidate’s performance in these areas, and develop a record of the candidates with communication skills that will benefit the project.

When considering contract resources for an IT project, look to each of the approaches described above to weed out the qualified candidates from those who might not have what it takes to help the team to be successful.

Q6 What performance standards should be defined as part of a contract for IT services?

Performance standards come in many sizes and shapes, and all should be considered for use in contract documents for products and personal services. Some of the performance standards commonly included in contracts established for IT projects include:

•  Project performance standards—The intended adherence to project management best practices. This standard should reference the specific source of those best practices as well as any tolerance for variance in a project’s cost and schedule constraints as defined by the sponsoring organization.

•  Software performance standards—The software’s desired performance attributes and functionality.

•  Hardware performance standards—Characteristics and performance attributes of the hardware required or available to support a system, network, or infrastructure.

Without performance standards in place in a contract, potential vendors have no benchmark against which their performance can be compared to determine whether they were successful. Project teams would have no standard against which to measure a vendor’s project deliverables to determine their acceptability.

Sources for performance standards include organization policies and guidelines, expert judgment, engineering standards, existing systems, and user experience.