Most projects require some procurement. Procurement is the purchase or acquisiton of something from an external organization. It usually involves payment, but may be a trade instead of a financial purchase. Internal acquisitions, staffing or materials supplied from one department to another, need to be budgetted and billed internally, but are not procurement activities.
Projects may need to procure supplies, staff, and/or services from outside organizations. Procurement management is one of the ten PMI knowledge areas. There are four PMI processes: plan procurement management, conduct procurements, control procurements, and close procurements. Sometimes this is handled by the project team, while in other organizations there is a procurement function, such as a purchasing department, or a mix of responsibilities depending on the organization's norms (organizational process assets).
Procurement may be made by a variety of methods. Two common methods are
- a simple purchase - money for standard goods
- contract - defining the agreement and trade for goods or services, used for custom or high volume purchases
Related: make-or-buy decisions, functional manager, agreements, request for proposal, budget, contract, procurement documents