|dc.description.abstract||The relationship between project management and procurement as an
organisational function is often a clash of wills. The field of project management
is ripe with stories of clashes between project managers and procurement officers
who, for whatever reason do not work well together.
There is no lack of literature on project failure and reasons why projects fail.
Available literature concludes that successful projects are defined as those
completed on time, within budget, and in ways that meet objectives. The biggest
challenge to project managers is to mitigate risk in an environment filled with
uncertainties. Marketplace forces such as unstable commodity markets and
economic fluctuations are among the competitive forces experienced by project
managers. Suppliers play an integral role within the project life cycle and
therefore it is essential to ensure that the right suppliers are selected.
The role of procurement has changed from functional to strategic and is no longer
viewed as a backroom function, which converts requests into supplier orders. The
main reason for the change is due to challenging factors such as globalisation,
inflation, technological innovations, and fluctuations in exchange rates and
commodity markets. Due to the large portion of expenditure spend by the
procurement department within the organisation the savings on purchasing costs
can have a substantial effect on the profitability of the organisation. Procurement
savings initiatives are now far more visible on the agendas of senior management.
Selection of the right suppliers is crucial for any organisation striving to achieve
the business objectives of the organisation and meet the expectations of
customers and shareholders. The procurement department apply certain tools
and techniques to select, evaluate, and measure the performance of suppliers.
Various tools and techniques are available, the focus of the study is on three of
these tools and techniques namely: negotiations, material budgets, and the
SESPA(Supplier Evaluation, Selection, and Performance Appraisal) process.
According to the literature reviewed, a project life cycle can be broken down into
four to five key phases namely: the conceptual, planning, execution, close out,
and control phases and procurement process into five steps namely: define the
requirements, select the supplier, produce an agreement, administer day-to-day
activities, and assess the performance of suppliers.
A comparison between the steps within the procurement process and the phases
within the project management life cycle reveals commonality and the potential of
benefits that the tools and techniques applied by procurement can contribute to
the project life cycle.
Thus the challenge to the procurement office is how to partner with the project
management function in a manner that will positively impact on the project
management life cycle and the project success. With these obstacles facing
most organisations, it is time for procurement and project management to focus
on cooperation instead of confrontation.
Developing a culture that sees individual projects as elements of a business plan
will require change. There is no lack of literature on resistance to change.
Change is seldom easy and old ways die hard, even when there is wide
agreement that change is needed. Therefore whatever the reason for change, it
is essential for organisations to realise that successful implementation of change
will require a systematic change implementation process.||