White Paper
Project Procurement vs. Operational Procurement
Overview
Project procurement management is a crucial, yet often overlooked, stage of the project management process. Many businesses choose to treat the procurement phase of projects similar to general corporate procurement– using the same tools, systems, and processes to handle both. However, procuring materials and supplies for projects requires a different approach than acquiring goods for routine business needs.
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“Corporate procurement systems are very rarely built with functionality that allows users to see the details that project procurement needs– tracking materials and process equipment at the detailed level required for projects.”
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Project procurement management is one of the fundamental knowledge areas of project management, according to the Project Management Book of Knowledge (PMBOK). Yet many corporations and capital project organizations treat procurements for projects the same as procurements for everyday business operations. This practice can lead to significant project delays, cost overruns, and other issues as most equipment and materials procured for projects need to be tracked individually. Corporate ERP procurement systems and processes lack the transparency and level of control required to manage project procurements at the necessary level of detail.