Hello again. In this lesson, we wanted to find a common understanding of project procurement and review the processes that are included in it. The definition of project procurement used by the Project Management Institute maybe a little different than what you may encounter in your organization. Some organizations limit procurement to the purchase of goods to be used on the project. However, for our purposes, we've included three distinct situations in our definition of project procurement. First, is the actual acquisition of goods, services or results from outside the team for use by the project. Note that this definition encompasses both material and services. It also includes results. Results might include a license to use software or the actual program itself. It might include a report on market conditions or other subjects important to the project. Second, project procurement includes the processes to manage the contracts that are in place to acquire the goods services or results including any changes in scope. Lastly, project procurement includes the management of agreements that are put in place by others for the benefit of the project. For instance, if a client purchases expertise or goods for us to use on the project, they may ask the project team to manage that relationship on their behalf. This activity is also included in procurement management. As we can see procurement manage is not just the purchase of goods for the project. It also includes all the other activities associated with these agreements. So, what might these processes include? As you see here procurement management includes three basic processes. As with all other functions, we need to plan the process. We need to decide what we will procure outside the organization, how we will do it, and under what conditions. Next, we need to actually acquire the goods services results we need for the project. This might be involved in bidding and awarding the work, or we may use some other process for the acquisition. After we make the acquisition, we manage the agreement used to acquire the goods services and results. We will track the progress of the supplier to make sure they meet the requirements and manage any changes that might occur. As part of this control process, we will close our procurements. This involves making sure all aspects of the agreement are met. All bills are paid and we receive what we acquired. Sounds pretty straightforward. Well, like most things in project management, it's not as straightforward as it may seem. Procurement management is like a series of small projects inside our larger project only in this case. We are one of the key stakeholders and the person or organization we made our agreement with is running the project. As part of our management process we should make sure that we are using all of the processes we've studied as part of this course. The supplier should have a scope, schedule, budget, execution plan, risk management plan, and be following the agreement. Together, the supplier and our team should have a change management process in place to document and approve any changes. As a project team, we should recognize the needs of this procurement project and provide the supplier with the information they need to properly manage their work. The first step in project procurement management is developing a plan. We will discuss how to do this in the next lesson.