Procurement Processes Changes in the PMBOK Guide 4th Edition

In this podcast Ricardo talks about the changes related to the Procurement processes, where some of the 6 processes described in the third edition of the PMBOK Guide were melted, resulting in 4 process at the PMBOK 4th Edition. This new structure gave more clarity and fluidity for the readers, summing up all the procurement process with the verbs "Plan", "Conduct", "Administer" and "Close". Other important aspect is the replacement of the term "contract" by the term "procurement", giving more extend to the concepts, allowing that the processes cover the administration and closure of the the acquisitions without a "required" contract.

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Episode transcript

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Hello everybody welcome to the five minutes BM podcast. Today. I'd like to talk about one change coming from the third to the fourth edition of the PMBOK Guide regarding Procurement. If we returned back to the PMBOK Guide third edition, we had 60 process to address all the Procurement aspect's. And now in the PMBOK four Edition we have only four process. The first thing that I'd like to make everybody aware is that there is addition from six to four doesn't mean that Procurement became less relevant.

It's a stool extremely relevant. And the reduced from six to four only to make more clear approach about the Procurement So the first to process in the PMBOK third Edition is to Plan and acquisitions. And Plan contracting this to process where mix it into only one plan, a physicians. So all do this. Sesions the make or buy decisions and all the procurement strategy.

All the contracting strategy now became the only one process. So Plan acquisitions means what do I need to acquire? And second, how do I procure? How do I find the supplier's and how I will Conduct all the purchases. So it's much more clear from the two. And now only one regarding all the planning aspects of the Procurement. The second change. It's all the conduction of the Procurement.

So I'm talking about receive seller responses and select sellers. This too process became only one is Conduct Procurement much more clear. So what does be a mine one, two to do with the conduct Procurement process, Minutes find sellers receive their response and select and use the criteria that we decide to use to select the most specific and better supplier.

So this is the second process. So the first and the second process of the PMBOK 30 Edition became only one process, the third and the fourth process of the PMBOK 30 Edition became Conduct Procurement. And the third change that for me, it's really, really good. It's the administration and closure of the PMBOK third addition. We use the word contract. Now we change this word for Procurement and this is a very extremely important change.

It becomes much more broader because I, sometimes I will buy something or I will contract something. And now you don't need to have a contract let's suppose that I need to buy some supplies. So she just by pay and receive, there is no contract, but I need to administer and manage all the Procurement aspect. The word Procurement is a much more broad award than only contract and this change.

So if I use the word Procurement instead of contract I'm, including the contract. So it's contract plus all purchasers that I do without a contract, all of this package, Minutes, Procurement, So, it's a much more open, so on this process. So all the area have Procurement became a much more clear area, much more easy to understand the four process. So it's Plan I Conduct I Administer and they Close Procurement I Close Procurement and there's will include for sure Close contract, but I can have all their documents all the time, internal documents aren't or other, the terminal process that are not contract related process, but the air Procurement related process.

So this is a much more clear approach. And this is reducing from six to four is one of the reasons that we have now in the PMBOK for a second, Edition only 42. Processes the other 44. And it's extremely important. Again, as I said, in the beginning of this podcast, we're not telling you that Procurement become less relevant. What all of the people that produce at and wrote the PMBOK Guide the intend of This is to make more clear, easy to read, easy to understand process with a much more broader Procurement concept.

I hope you enjoy this podcast and see you next week with another five minutes BM. Podcast see you.

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