4 processes of 'Project Procurement Management
Discuss about the IT Procurement and Vendor Management for 4 Processes.
In order to establish and maintain effective relationship with vendors the Project Procurement Management cycle with its 4 basic steps are very beneficial for any business organisation. The four conjugative parts of Project Procurement Management is The Planning Process, The selection Process, The Administration Process and The Closing Process (Khanam et al. 2015).
In planning process, the core business organisation can develop initial planning including risk identification and timeline for the procurement management. The planning process has huge impact on the potential time and cost efficiency of the procurement process. It highly influences the selection process of the procurement management. It helps to identify the financial and budget scope of the project. The selection process refers the comparing and selection process of the most suitable vendors considering the optional advantages as well as disadvantages. The selection process also includes the financial and operational negotiation process. Administration process allows the core company to develop the centralized system while executing the planned procurement project. Many operational tools like physical inspection, internal audits and reviews are used in this phase of project management. The closing process refers the documentation process just before the process of closing the executed operation with expired business contract. Resolving disputes with internal negotiation is highly important.
Enforceable contract has four major components that allow to abide by the contract’s terms and condition while having and recognised identity from courts where the court is able to compel compliance. These four major parts for enforceable contract are Offer, Acceptance, Mutual agreement and Consideration.
Offer is an initial phase of acts in an enforceable contract, which is made in exchange for a return promise. The field and presentation of an offer must me legitimate while prioritising the requirement of the business partner. Offering is the initial phase of the contract that present the agreement issue to the other organisation (Ico.org.uk 2018). In Acceptance, process both of the parities must be consternated about the validation of the agreement. Acceptance initiates the further procedures of a contract. The process of acceptance requires the authentic documentation from both parties that can clearly testify the acceptance. Mutual agreement is the most essential phase of an enforceable contract that required legitimist and adequate. For that both of the organisation have to measure the possible consequences of this contract before signing the mutual agreement. In consideration phase the duties and responsibilities of both organisation are forecasted with regulatory policies, procedures, terms and condition under the sincere supervision of the court.
4 components of an 'enforceable contract'
A acceptable offer for a contract needs to have three necessary components that validate the specification, realistic and achievable aspect of the offer. The relevancy of the whole contract depends on these components of the offer namely Communicated, Committed and Definite terms.
The party making the offer must communicate with the all stakeholders who could be associated with the contract and the regulatory operation. In these participants the most essential participants is the offeee, in other words the party for whom the offer has been made. An appropriate communication can build the foundation of the overall contract. During the offering both of the parties must ensure that the other one is committed enough to the contract while keeping the rules, regulation, conditions in mind. A committed offer can ensure the flawless enforcement and execution of the project (iwillteachyoutoberich.com 2018). In any project management plan commitment is the most essential factor that also has a huge impact even before the contract being made. The offer must be definite and specific about their field operation and purpose of initiation. The essential terms involving price, timings, manner of acceptance have to be well defined in the offering phase of the contract.
The demand can influence the external factors like consumer relation, partnership and internal factors like financial factors workforce management, production and policies from low to high level of intervention. In accordance with this variable impact the demands are divided into two types namely dependent demand and independent demand.
Independent demands influences the internal factors like finance and revenue as well as the external factors like supply chain management to some extent where the influences are very low. However, for Dependent demand both internal and external factors are influence by higher amplitude. Measuring the independent demand is much easier than the dependent demand because of its less complex cardinality with the other internal and external regulators. When it comes to the dependent demand, both substitutes and complements of the offering products are considered. In contrast, for independent demand either substitutes or complements are considered for measurement (Cgi.com 2018). The changes of these regulatory factors cannot influence the independent demand to considerable amount. However, these factors have high impacts in the dependent demand. Therefore, independent is significantly vulnerable than the dependent demand.
The outsourcing policy are utilised to minimise the operational cost as well as time. However, some operational costs can have strong impact on the overall expenditure of the business. Measuring the hidden costs of undertaken outsourcing policy is chief essential financial factors that formulate the potential profitability.
3 necessary components of an offer
Cost of management and coordination of contractors have a significant impact on the overall expenditure due to procedural outsourcing method while managing the supply chain with suitable strategy. The selection of supplier, trading routs and process regulate the entire expense of the cost for management and coordination to have efficient outsourcing. Managing the inventory and the inbound logistic operation has high impact on the outsourcing investment policy (Al-Fatlawi and Kadry 2014). As an example, when an organisation is outsourcing its cloud computing system, they should consider the influences of the backup and reinstalling the data in the operating server. Cost for inappropriate sales and operational planning is another major hidden cost of outsourcing. While implementing the outsourcing method in production operation the operating organisation should consider the risk factors regarding unexpected execution failure, inappropriate time management and other factors. Any of these discrepancies can cause high operational expenditure including procurement.
Total Quality Management (TQM) is the constant procedure of dropping or eliminating errors in manufacturing, streamlining supply chain management while improving the client experience by ensuring that workers have enough speed with their operation and training. Therefore, the quality management needs high quality of data management and synchronisation of record while keeping the system updated with the most advance operation techniques. From the case study of reducing IT user downtime using TQM it can be said that, this huge data collection as well as systematic operation with synchronisation needs flexible and highly efficient process of execution and maintenance (Jensen et al. 2009). In modern era, the phrase Information Technology can offer the group of facilities where an organisation can systematically store, manage, rewrite and implement a huge amount of date with extreme accuracy. Information technology or IT allow an organisation to invest very less amount of time, energy and money to operate various implementation and procurement while managing the entire system with Total Quality Management approach. With advance database management system with server based file handling, which is also known as, cloud computing, big data and other technology an organisation can incorporate and execute their Total Quality Management approach with appropriate strategy.
The choice of the consumers for bargaining or for being involved in a contract varies as per many psychological factors. The bargaining pattern is highly influenced by some major psychological factors that also have social, cultural and economical aspect within it. The four major psychological factors that affect the bargaining are Motivations, Perceptions, Experience and believe with attitude.
The difference between independent and dependent demand
The motivation is the basic psychological factors that influence the negotiation attitude as well as bargaining power before a specific purchase. Maslow’s theory of motivation suggests the hierarchical factors that influence the motivation of the customer to a particular choice. Needs and Expectation are the two major components of this motivation. Perception refers the person’s selective view that influences the interpretation pattern. As it has been noticed in salary negotiation case study, the human perception mainly depends on various unconscious factors, such as environment, thought process and previous experiences. Experience refers the previous experience of the customer on a specific type of product or service. As discussed earlier the Expectation has high impact for building the perception. The experience also helps to sharpen the accuracy for choosing the most appropriate option of purchase. Beliefs with attitude greatly influence the purchasing decision that is regulated by the brand reputation of the seller as well as the previous knowledge of the consumer about that product (iwillteachyoutoberich.com 2018). From the case study of salary negotiation it has been identified that, attitude of offering the product regulates the believe system of the customer from conscious and unconsciously.
The sustainability of IT procurement depends on the technological requirement, strategic relationship with stakeholders, risk factors and service availability. Each of these factors should work efficiently up to the threshold level to make the procurement process sustainable enough. At the same time, the economic interventions required to develop this sustainable It procurement has considerable amount of influence in outbound cashflow. The pure economic practice emphasise the group of financial activities that regulate the operational cashflow. The pure economic practice needs enough financial management skill that ensures the lower outbound cashflow and higher inbound cashflow. Therefore, the pure economic practices and sustainable IT procurement work against each other to regulate the organisational expense and profitability (Schneider and Sunyaev 2014). From the case study of Fixing payroll problem it is clear that appropriate balance implementation of Database management with TQM strategy can help to reduce this type of operational conflict within sustainable IT procurement and economic practice.
In SaaS or Software as a Service agreement between core organisation and the vendor company, the vendor company provides the infrastructure as well as the platform of the cloud computing process. Therefore, in SaaS offering of cloud computing, the customer as well as provider needs to understand the purpose and the potential role of the engaging cloud computing system in the target environment. This understanding helps to generate the initial chart of requirement to satisfy the needs and expectation of the client company. At the same time, considering the Hardware as well as operating system based agreement is essential (Schneider and Sunyaev 2014). Before the implementation the pre organised database system and the file handling process including the data flow diagram and cardinality should be investigate properly. The potential acceptance of new server based data handling system within the organisational operation is highly dependent on this inspection report. As per the case study of Green IT, during the planning for SaaS service targeting the client one of the most important factors is security. The Security refers both software and hardware security and durability. The porting plan and the virtual data connectivity depend on the initial decision for incorporating the security measure (iwillteachyoutoberich.com 2018). On the other hand, for server security the ACL or Access Control List and the package confirmation system for data transfer should be designed by prioritising the privacy and layer of accessibility of the implementing Cloud based server.
The SOW or Statement of Work should include various critical paths even before the development of the cloud computing system for the client company. Critical Path works as the core credentials for the designing, developing and delivering system of any kind of IT service providing. The functionality of the Cloud server development and delivery system should follow a certain path or methods to avoid any kind of operational anomalies. Therefore, during this process a accurate efficiency measurement procedure can help to identify the major issues regarding the competency, licences agreement, copyright protection, source code protection and others. This measurement method need a set of well organised and effective attributes, those are also called constrains. These constrains work as the multi-layered filter system within the Statement of work that defines both the functionality and the integrity of the development and implementation process. From the case study of Bear brewing strategic approach with Total Quality management it is clear that the critical path with multiple synchronised phases must be included in Statement of Work (iwillteachyoutoberich.com 2018). In this case appropriate incorporation has increase the overall quality and profitability significantly.
Al-Fatlawi, A.A.H. and Kadry, S., 2014. Green Cloud Computing: Data Center Case Study. In Handbook of Research on Cloud Infrastructures for Big Data Analytics (pp. 508-533). IGI Global.
Cgi.com (2018). Emerging Trends Green IT. [online] Cgi.com. Available at: https://www.cgi.com/files/pdf/cgi_whpr_84_emerging_trends_green_it_e.pdf [Accessed 8 Jun. 2018].
Ico.org.uk (2018). Contracts. [online] Ico.org.uk. Available at: https://ico.org.uk/for-organisations/guide-to-the-general-data-protection-regulation-gdpr/accountability-and-governance/contracts [Accessed 8 Jun. 2018].
Isixsigma.com (2018). Brewing a Better Beer with TQM. [online] Isixsigma.com. Available at: https://www.isixsigma.com/methodology/total-quality-management-tqm/brewing-better-beer-tqm/ [Accessed 8 Jun. 2018].
Isixsigma.com (2018). Fixing Payroll Problems. [online] Isixsigma.com. Available at: https://www.isixsigma.com/methodology/total-quality-management-tqm/fixing-payroll-problems-tqm-case-study-human-resources/ [Accessed 8 Jun. 2018].
Isixsigma.com (2018). Reducing IT User Downtime. [online] Isixsigma.com. Available at: https://www.isixsigma.com/methodology/total-quality-management-tqm/reducing-it-user-downtime-using-tqm-case-study/ [Accessed 8 Jun. 2018].
iwillteachyoutoberich.com (2018). Negotiating a $16k raise. [online] Isixsigma.com. Available at: https://www.iwillteachyoutoberich.com/blog/salary-negotiation-earning-more/ [Accessed 8 Jun. 2018].
Jensen, M., Schwenk, J., Gruschka, N. and Iacono, L.L., 2009, September. On technical security issues in cloud computing. In Cloud Computing, 2009. CLOUD'09. IEEE International Conference on (pp. 109-116). IEEE.
Khanam, S., Siddiqui, J. and Talib, F., 2015. Modelling the TQM enablers and IT resources in the ICT industry: an ISM-MICMAC approach. International Journal of Information Systems and Management, 1(3), pp.195-218.
Schneider, S & Sunyaev, A., 2014. Determinant factors of cloud-sourcing decisions: reflecting on the IT outsourcing literature in the era of cloud computing, Journal of Information Technology, Mar 2016, Vol 31, Issue 1
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