Please review this week's Introduction and Lesson and Appendix B and answer the following questions.

• What are a few ways in which the agile methodology differs from the traditional methodology?
• What are a few ways in which the two methodologies are similar?

*Project Procurement Management:Project Procurement Management includes the processes necessary to purchase or acquire products, services, or results needed from outside the project team.

Project Procurement Management focuses on procuring (i.e., acquiring or purchasing) project resources (goods or services) and the managing, monitoring, and controlling of procurement contracts, agreements, such as purchase orders, memoranda of agreements (MOAs), and internal service level agreements (SLAs). This knowledge area comprises the following processes: 12.1 Plan Procurement Management, 12.2 Conduct Procurements, and 12.3 Control Procurements.

The Plan Procurement Management process involves the documenting of project procurement requirements and decisions to buy or not to buy goods and services. This process also defines the procurement approach and identifies potential sellers. All this information is recorded in the procurement management plan to guide the procurement process.

Key information and documents present in the procurement management plan include the following.

• Procurement management approach, identifying procurement steps and responsibilities
• Procurement definition clearly describing the item, product, or service to be procured
• Type of contracts
• Procurement risks
• Cost determination
• Procurement constraints
• Contract approval process
• Other standardized procurement documents

Make or Buy Decisions

After the project statement of work (SOW) and once the work breakdown structure is created, the project team decides whether the tasks or activities on a project would be done in-house or would be contracted to an outside agency. This is known as make-or-buy decisions and it takes place during the procurement planning stage.

Exhitbit 13.2: Reasons to Make or Buy

Reasons to Make	Reasons to Buy
Lower production cost More control over quality and time Lack of suitable suppliers Obtains a customized item Utilizes project team's expertise and time Protects proprietary design or knowledge	Frees project team to deal with other important activities Ability to utilize specialized suppliers Flexibility in procurement Inadequate managerial or technical resources Inadequate capacity Small volume requirements

(Anantatmula, V., Kloppenborg, T.J., & Wells, K, et. al, 2019)

Procurement Request Types

If the make-or-buy decision is to buy, then the buyer prepares a procurement document to distribute to potential sellers.

Most common type of documents used to procure a product, service, or result include the following.

*Request for Information (RFI):This is a type of procurement document whereby the buyer requests a potential seller to provide various pieces of information related to a product or service or seller capability.

*Request for Proposal (RFP):This is a type of procurement document used to request proposals from prospective sellers of products or services. In some application areas, it may have a narrower or more specific meaning.

*Request for Quotation (RFQ):This is a type of procurement document used to request price quotations from prospective sellers of common or standard products or services. It is sometimes used in place of request for proposal, and in some application areas, it may have a narrower or more specific meaning.

Procurement Contract Types

There are three major contract types for procurement management.

*Fixed-Price Contract:An agreement that sets the fee that will be paid for a defined scope of work regardless of the cost or effort to deliver it

*Cost-Reimbursable Contract:A type of contract involving payment to the seller for the seller's actual costs, plus a fee typically representing the seller's profit

*Time and Material Contract (T&M):A type of contract that is a hybrid contractual arrangement containing aspects of both cost-reimbursable and fixed-price contracts

Project Monitoring and Control

Monitoring project performance is a critical element in project success. Without consistent monitoring and evaluation, it is very easy for the project to go off track and ultimately fail. Some of the data analysis techniques used by project managers are earned value management (EVM), variance analysis, trend analysis, and reserve analysis. We will focus on earned value management (EVM).

*Earned Value Management:A methodology that combines scope, schedule, and resource measurements to assess project performance and progress

Click on each title below to view more details.

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Earned Value Management (EVM)

Variance, Cost Variance (CV), and Schedule Variance (SV)

Using the Earned Value System

Project Baselines

Performance Indices, Cost Performance Index (CPI), and Schedule Performance Index (SPI)

Forecasting Final Project Cost

Agile Project Management and Project Control

In agile projects, progress is evaluated at the end of the sprint or iteration. There are also different performance measurements that are used in agile projects. One of the most critical tools in agile projects is the concept of team velocity. Velocity is the articulation of team speed in accomplishing specific work within a sprint or iteration. As described in earlier lessons, the effort to achieve requirements or user stories can be expressed in story points. Velocity is the number of story points that the team completes in each sprint. Once velocity is established, it can be used for forecasting.

The following burndown chart illustrates the actual work accomplished against the product backlog. The project is ahead of schedule when there is less work left than originally predicted. The project is behind schedule when there is more work left than originally predicted.

Note:For more information on agile differences related to Chapters 13 and 14, please review theAppendix B: Agile Differences Covered.

References

Anantatmula, V., Kloppenborg, T.J., & Wells, K. (2019).Contemporary project management. (4^thed.). Boston, MA: Cengage Learning.

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