Figure C10b.2 Procurement – Sourcing

Figure C10b.2 respects project management (PM) rules and describes Sourcing in procurement via components (steps) of today's frequently used.

Sourcing is concerned with finding the best supplier for goods and services. The subset of procurement comes before any purchases are made and is divided into six steps.

The Dialectic Diagram (DD) is a set of Sourcing steps split into goal and path triads.

There are differences between Sourcing for organizations (pro their production and services) and project needs (for an organization development or generally for a territory, national education, local health services, and any infrastructure development, in summary, for SED, DRR, and HA package of projects).

The below-described steps reflect present stages in Procurement (e.g., by Wikipedia), and their adaptation to new project paradigm needs. It is a task of the future teams (see chapter B, Challenge).

The triad of a goal of Sourcing covers:

• Supplier management: supplier management is the process that ensures maximum value is received for the money that an organization pays to its suppliers. It is the supplier lifecycle management and covers supplier risk, diversity, and compliance management. Supplier management reflects the buyer's readiness to do good business.

• Negotiate contract: contract negotiation is the process through which two or more parties deliberate over the contents of a contract to reach a legally binding agreement on the terms of their relationship.

• Category analyses/strategy: category analysis refers to in-depth knowledge of a particular category's demand and supply market. It does not only help in efficiently managing types (categories, classes) and matures holistically understanding a stakeholder.

The triad of a path of Sourcing covers:

• Supplier identification: supplier identification and qualification are the first two steps in the supplier management process within Procurement. Organizations (companies, institutions, etc.) define their unique supplier identification and qualification criteria for each supplier to become a supplier partner.

• Requirements definition: the Requirements Definition is a document created during the Requirements Analysis Phase of the project. Its intended audience is the project manager, project team, project sponsor, client/user, and any stakeholder whose input/approval the requirements definitions of processes that are needed.

Functional requirements are generally defined to make them independent of particular technology implementation. They describe the capabilities and functionality of the required solution, not specific, e.g., software features.

• Contract management: Contract management enables streamlining and an automated approach to managing and creating new contracts. It helps control costs, oversee payments, and revenue, improve productivity, and reduce error.

Contract management enables contractors to pass the path of streamlining and automating. Initiate approach to managing existing contracts and creating new ones. It helps control costs, oversee payments, and revenue, improve productivity, and reduce error.

Figure C10b.2 – diagram's reading: Figure C10b.2 presents two diagrams. Reading the first (the Dialectic Diagram) is explained in the previous text (e.g., in Figures C3d,e, and C5e,f,g).

The principle of reading the second (the Dynamic Diagram) is presented: present supply management is put into digital transformation (respecting the principle, doctrine of the Global Digital Transformation, GDT) step by step by the diagram.

It means that the structure of the procurement process respects the As-Is and status, and the added value to each following step comes via gained practice.

Digitalization will change contract negotiation processes and requirements definitions. Demand for analyses and strategy building via mission and vision analyses (e.g., by Figures C8.2a,  C8.2b, C8d.2) will form a press on the more complex view of Contract management.

The SHIFT in Figure C10b.2 indicates the change of the present PM into a new project paradigm (it is about new project management adapted to the internal processes of GDT building).

More explained in a set of Figures C10d.1–C10d.4 (Legal Framework, New Project Paradigm, and the Self-Powered Community).