Project Procurement Management and Project Human Resource Management Plans

A successful project is one that meets all of its goals and meets the expectations of
various stakeholders of the project (Radujković & Sjekavica, 2017). Project success does not
happen by accident. Rather, it is a product of numerous factors. In particular, there are three
factors or elements which are key to the success of any project. The first element is that of
people who perform the tasks of the project (Radujković & Sjekavica, 2017). A project is
likely to succeed if the team implementing it is composed of individuals who are experienced
and skilled in the various tasks that they are assigned to perform (Radujković & Sjekavica,
2017). Conversely, teams with incompetent members are likely to lead to failed projects as
measured in terms of time taken to complete the project, quality of work, and cost. The
second major element is resources (Radujković & Sjekavica, 2017). Resources are the goods
and services that project teams need to perform their tasks. No matter how competent team
members are, they cannot achieve much if they are not provided with adequate resources to
perform their roles. Resources are like tools without which projects cannot be brought to
successful completion. The third and perhaps the most important element required for
successful project completion is management (Radujković & Sjekavica, 2017). Management
is the leadership of the project. It organizes teams involved in project implementation,
provides them tasks to complete at different stages of the project’s implementation and then
provides them with resources that they need to accomplish their work (Radujković &
Sjekavica, 2017). To guide implementation of the project, prepares a number of plans. Two
major plans are human resource management plan and procurement management plan.

Human resource management plan provides guidance on how the employees involved
in the project get hired and managed during the project’s implementation (Mohammed et al.,
2019). Elements of human resource management plan include acquisition of employees, their

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training, safety measures to protect them during their work, and rewards that they may get
during their work on the project (Mohammed et al., 2019). Human resource management plan
ensures that all of the people who are involved in the project are given specific
responsibilities and roles to execute and that they have the required expertise to perform their
assigned roles. Given the fact that human resource is the most important ingredient in a
project’s success, any weaknesses in human resource management may have serious negative
consequences for the project.

Just like the human resource management plan, procurement management plan
provides guidance on how resources that will be used in the accomplishment of the project
are be acquired and used (Pheng, 2018). Some of the issues that procurement management
plan addresses include assignment of existing assets to the project, estimation of cost of
goods and services to be used in the project’s implementation, and ensuring that procurement
procedures are adhered to (Pheng, 2018). Thus, both human resource management plan and
procurement plan guide resource acquisition and usage in a project. The only difference
between the two is that while human resource management plan deals with acquisition and
usage of personnel involved in a given project and provided by the project team itself,
procurement management plan deals with acquisition and usage of goods and services used in
the project’s implementation. Specifically, this paper examines how leadership can improve
procurement process. It will show that effective leadership in procurement leads to better
procurement performance in terms of low cost, short procurement cycle times, and provision
of quality materials and services.

Procurement Management Plan

Project procurement management includes all processes that are needed to acquire
products or services from outside of the project’s team. Project procurement management is

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necessary when the project’s scale is such that the team’s capacity and skills are not adequate
to effectively accomplish the tasks of the project in a timely and cost-effective manner
(Pheng, 2018). Due to this deficiency, there is need for supplementing the team’s resources
and capabilities through getting various goods and services from other parties. Project
procurement management plan ensures that the procurement process is conducted in a
manner that helps the project to be implemented successfully (Pheng, 2018). In particular,
project procurement management plan ensures that all the required goods and services for the
project arrive at the right time, are of the best quality possible, and are acquired at a fair price.

Some of the processes that are involved in project procurement process include
procurement management (Pheng, 2018). This process involves, among others, identifying
potential providers of goods and services that will be needed from third parties to accomplish
the project. The other one is conduct of procurement which includes awarding contract or
selecting seller of the needed goods and services (Pheng, 2018). The third main process is
procurement control. It involves monitoring of the performance of the contract, making
needed changes, and making appropriate corrections (Pheng, 2018). Effective performance of
these procurement processes is key to successful implementation of a project. This is because
the success or failure of procurement process has a huge effect on the quality of the final
work, the time that it takes to complete the work, and the cost of accomplishing the tasks of
the project.

How Leadership Improves Procurement Process

There is a direct relationship between the performance of various procurement
processes and leadership. Procurement is like a ship. Without an effective leader,
procurement can act as a lag to the project, hindering its success. Effective leaders help to
make procurement a success. They use their expertise and skills to evaluate all alternatives

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that are available and choose an option that is likely to improve speed of delivery at a lower
cost without compromising the quality of the project’s work (Wang & Cruz, 2018). For
instance, they may use technology to gather information on various suppliers, trace spending
and improve collaboration among vendors. Such efforts increase the level of savings that they
make during the project’s implementation. They can also use their expertise to assess various
risks from the procurement side that may have a negative effect on the overall
implementation of the project (Wang & Cruz, 2018). Risks include late delivery of required
products or services or delivery of products and services that are of low quality (Wang &
Cruz, 2018). Addressing all foreseeable risks increases the chances of the project being
completed on time and without cost overruns. Additionally, through their networks, effective
leaders can find new and innovative ways of performing various procurement processes that
help in obtaining goods and services needed to accomplish tasks of a project faster and
cheaply (Wang & Cruz, 2018). They can also use price benchmarking to increase savings by
obtaining the required and goods and services more cheaply.

Therefore, there is little doubt that effective leadership is a key component of
successful procurement process. In order for procurement to be successful, the procurement
managers need to be great leaders. The effectiveness of their leadership is not measured by
the leadership style that they employ. Rather, it is measured by the results of their work. In
fact, rather than being tied to a single style of leadership, procurement managers often
employ different styles, depending on the unique conditions of a given project. For instance,
if the project team is dealing with a particular vendor for the first time, the procurement
manager may use leadership styles that require closer monitoring of the vendor in order to
ensure that they provide the right quality of goods and services and at the appropriate time.
For vendors that have long-term relationship with the project team and whose materials and

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services have a reputation for being of good quality, the procurement manager may opt for a
leadership style that requires less monitoring.

In my leadership point of view work, I examined the leadership styles of two great
leaders that I admire. These are Richard Branson, the British billionaire, and Warren Buffet,
one of the most successful investors of all time and also one of the richest men in the world.
Branson uses the democratic leadership style while Buffet uses laissez-faire leadership styles.
I believe that both of these styles can be effective in promoting procurement performance
when used by procurement managers. In analyzing how these leadership styles affect
procurement performance, I will consider their use with team members as well as with the
vendors or suppliers.

In democratic style, practiced by Richard Branson, all team members are considered
equal and important regardless of their rank in the team. Suggestions and feedback from
employees are given serious consideration because the leader understands that it is not always
the case that the best ideas come from the highest-ranking employees or team members
(Chan, 2019). Generally, decisions are arrived at through consensus. Even though seeking
consensus may slow down decision-making, it also leads to decisions that are of high quality
because every decision is arrived after considering input from different members (Chan,
2019). For procurement, making decisions after extensive deliberations is important
particularly in the area of risk management. When making a decision alone, there are some
foreseeable risks that one may not be able to identify. However, when the decision involves
different people, it is easy to identify most of the risks that may negatively affect the project.

Another advantage of democratic style of leadership in procurement is that it
promotes innovation (Chan, 2019). When highly experienced individuals meet and discuss
various issues related to procurement together, new ideas are likely to emerge that are likely

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to improve the performance of the procurement process. For instance, deliberations among
team members may lead to adoption of innovative practices on issues such as the manner in
which goods and services are obtained. In addition to innovation, democratic style of
leadership can also result in potentially useful information, such as cheap suppliers of certain
materials and services that are needed in the project’s implementation. Without involving
team members in deliberation of such issues, the leader may potentially miss out on
information that could help in having cost-effective procurement.

The democratic style is also effective when applied to vendors. One of the methods
used to make sure that vendors or contractors perform their job well is through establishing
key performance indicators at the beginning of the contract. The key performance indicators
(KPIs) form the basis of evaluation of the contractors or vendors. The project procurement
leader can help to improve the performance of procurement by ensuring that the vendors meet
the established key performance indicators at every stage of the project’s implementation.
Research has shown that the best way to establish key performance indicators is through
collaboration with the people and entities whose performance will be measured by the key
performance indicators. Democratic style of leadership is appropriate in formulation of key
performance indicators because it is concerned with establishing consensus through having
discussions with all people who may be affected by a given decision. Since the KPIs relate to
issues associated with time such as procurement cycle time and quality, such as defect rate,
meeting the KPIs ensures that the vendors always bring high quality products at the right
time.

Unlike Richard Branson, Warren Buffet practices the laissez-faire leadership style. In
this leadership style, team members are given roles and responsibilities. The leader specifies
the kind of outcome that they expect and leaves them to perform their work without close

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supervision or monitoring (Rahbi, 2017). All that the leader expects from them is that they
execute their tasks as required and within the allocated time. Since this leadership style
involves minimum supervision from the leader, it is important to have team members who are
highly knowledgeable, skilled, and experienced. It is only such people that can handle the
high level of responsibility and autonomy that is associated with laissez-faire style of
leadership. Practicing the leadership style on team members who are less experienced or
skilled can lead to dismal performance of the project.

Laissez-faire can style of leadership can significantly improve performance of
procurement and, therefore, that of the project. However, it needs to be implemented with a
lot of care. For instance, suppliers can take advantage of the hands-off style of the leader to
provide low quality products or services in order to maximize their profits because they know
that the leader may not notice the quality of their products. It is worth noting that it is not all
times that the interests of the project’s implementation team align with those of the project’s
vendors. While the project’s team main focus is to deliver a successful project, the main
focus of the vendor is to make maximum profit from supplying various goods and services to
the project’s implementation team. Thus, they may not have any problem with supplying
substandard goods and services or supplying them at exaggerated prices.

To prevent suppliers from taking advantage of the downsides of the laissez-faire
leadership style, it may be necessary for the leader to adopt a number of measures that protect
the interests of the project’s implementation team. One of these measures is to develop long-
term relationship with suppliers who are competent, have integrity, and have an interest in
maintaining a long-term business relationship (Rahbi, 2017). Such kind of suppliers, when
provided with autonomy under the laissez-faire leadership style are likely to improve
procurement performance through providing high quality goods and services are prices that

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are fair and at the appropriate time. Working with such kind of suppliers improves chances of
having a successful project. By giving complete responsibility to experienced and
knowledgeable team members, a procurement manager makes it easy to get such kind of
suppliers as the team members are likely to have knowledge of the most reliable suppliers of
various products needed to accomplish the project.

Apart from vendors, laissez faire style of leadership can also be applied to the
project’s team members. One of the reasons why Warren Buffet has been able to successfully
use laissez-faire to achieve great results where others have failed is that he ensures that he
selects teams composed of highly talented, knowledgeable, and experienced individuals.
Confident in their skills and ability to deliver excellent results, he gives them autonomy to
work as they please as long they deliver goals set for them at the right time. The same
approach, when used in procurement, can lead to great performance of procurement. For
instance, the leader may assign roles based on category knowledge and experience of the
individual. Due to the individual’s experience, they are likely to know the best quality
product for various works in the project, fair prices for the products, and even the best
vendors for the products.

Therefore, the leadership styles of Richard Branson and Warren Buffet, when applied
in procurement, can have a positive effect on performance of procurement. Granted, some
other leadership styles that were not exhaustively discussed in leadership point of view may
also be effective when used in procurement process. For instance, authoritarian leadership
style, while not great at motivating team members or vendors, may ensure that strict
procurement conditions are adhered to during the procurement process. Authoritative
leadership style may also be effective. In this leadership style, the procurement leader gives
instructions about what they need the project’s implementation team and the vendors to do.

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They then guide them throughout the process to make sure that their work is in line with the
instructions that they gave them.

Conclusion

Procurement plays an important role in the successful implementation of a project.
While project human resource management ensures that the project has all the personnel it
needs for various positions and that they work at the correct speed to complete the project on
time, project procurement management ensures that the personnel have the goods and
services that they need to complete the project. As this paper has shown, the success or
failure of procurement management depends on leadership. Effective leadership leads to
successful project procurement process. The specific leadership style that is employed
depends on a number of factors. They include level of skills and experience of the team
members as well as the reliability of the vendor. The leadership styles of Richard Branson
and Warren Buffet (democratic and laissez-faire respectively) have been found to be effective
in achieving successful procurement just as they do in the business operations of the two
business moguls. Democratic style of leadership promotes innovation in the procurement
process which increases efficiency and effectiveness. Laissez-faire, on the other hand,
provides complete autonomy of various aspects of the procurement process to competent
individuals who, thanks to their autonomy, may speed up the process while ensuring that high
standards of quality are adhered to. Thus, these leadership styles, when applied in project
procurement management, improve procurement performance in terms of speed and quality
of products and services that vendors deliver to the project’s team.

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References

Chan, S. C. (2019). Participative leadership and job satisfaction. Leadership & Organization
Development Journal.

Mohamed, M., Hanafi, H. B., & Bin Ahmad, Z. Z. (2019). Do Human Resource Management
(HRM) Practices improves Project Quality Performance? Evidence from Construction
Industry. Quality-Access to Success, 20(169).

Pheng, L. S. (2018). Project procurement management. In Project Management for the Built
Environment (pp. 177-193). Springer, Singapore.

Radujković, M., & Sjekavica, M. (2017). Project management success factors. Procedia
engineering, 196, 607-615.

Rahbi, D. A., Khalid, K., & Khan, M. (2017). The Effects of Leadership Styles On Team
Motivation. Academy of Strategic Management Journal, 16(2).

Wang, H., & Cruz, J. (2018). Transformational Leadership in Supply Chain Management.
Available at SSRN 3152702.