All contracts should include specific clauses that take into account issues unique to the project.

INSY 450\609 Fall 2014Chapter 12:Project ProcurementManagementInformation TechnologyProject Management,Seventh Edition

INSY 450\609 Fall 2014Learning ObjectivesUnderstand the importance of projectprocurement management and the increasing useof outsourcing for information technology (IT)projectsDescribe the key concepts involved in planningprocurements for projects, including determiningthe proper type of contract to use and preparinga procurement management plan, RFQ, RFI, CFT,statement of work, source selection criteria, andmake-or-buy analysisDiscuss how to conduct procurements andstrategies for obtaining seller responses,selecting sellers, and awarding contracts2Information Technology ProjectManagement, Seventh Edition

INSY 450\609 Fall 2014Learning Objectives (cont’d)Understand the process of controllingprocurements by managing procurementrelationships and monitoring contractperformanceDescribe the process of closing procurements3Information Technology ProjectManagement, Seventh Edition

INSY 450\609 Fall 2014Importance of ProjectProcurement ManagementProcurement means acquiring goods and/orservices from an outside sourceOther terms include purchasing andoutsourcingExperts predict that global spending oncomputer software and services will continueto growPeople continue to debate whether offshoreoutsourcing helps their own country or not4Information Technology ProjectManagement, Seventh Edition

INSY 450\609 Fall 2014Debates on OutsourcingSome companies, such as Wal-Mart, prefer todo no outsourcing at all, while others do a lotof outsourcing. GM recently announced plansto switch from outsourcing 90% of IT serviceto only 10%Most organizations do some form ofoutsourcing to meet their IT needs and spendmost money within their own countryWould you outsource you IT Department?5Information Technology ProjectManagement, Seventh Edition

INSY 450\609 Fall 2014IT Outsourcing Market Continuesto GrowU.S. companies are transferring more workabroad, especially in the areas of ITinfrastructure, application development andmaintenance, and innovation processesIndia, China, and the Philippines are thepreferred locations for outsourcing, and LatinAmerica is growing in popularityA shortage of qualified personnel, not costsavings, is the top reason for globaloutsourcing of IT services6Information Technology ProjectManagement, Seventh Edition

INSY 450\609 Fall 2014Why Outsource?To access skills and technologiesTo reduce both fixed and recurrent costsTo allow the client organization to focus onits core businessTo provide flexibilityTo increase accountability7Information Technology ProjectManagement, Seventh Edition

INSY 450\609 Fall 2014ContractsA contract is a mutually binding agreementthat obligates the seller to provide thespecified products or services and obligatesthe buyer to pay for themContracts can clarify responsibilities andsharpen focus on key deliverables of aproject

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What is the first step in project procurement management quizlet?

What are some of the procurement contracts used in project management?

What are the 4 main processes of project procurement management?

What is the procurement process that involves obtaining seller responses selecting a seller and awarding a contract called?