Project-based Purchasing

Companies that are able to move beyond staff augmentation to project-based solutions – where the service provider takes responsibility for the project definition, delivery, and results – usually find that outsourcing results improve while costs decline significantly.

The biggest obstacle for shifting from staff augmentation to project-based purchasing is usually not the procurement or negotiation of services, but the ability and willingness of the internal organizations to sufficiently define project requirements and relinquish project ownership. Project-based purchasing is primarily about changing the behavior of internal management.

Collabera advises clients, through a four-step process that works towards creating and implementing the capabilities, to begin project-based purchasing.
Collabera’s four-step approach includes:

Defining Expectations: Business units that are able to define the required results and performance levels, can benefit the most from project-based purchasing.
Technical Specifications: Business units should be able to outline the goals and objectives in the language of business. The IT organization would translate those needs into applications, networks, servers, and performance.
Selecting Service Providers: The common performance metrics for purchasing projects, will be very different from staff augmentation. While one goal is to ensure the best pricing possible, the service provider with innovative ideas and methodologies often gets the nod.
Governance: There are two types of contracts, for a project that has a fixed time and scope, the delivery success is determined by the meeting of milestones at the correct time and at the specified cost. The second variation is often categorized as managed services and is usually three years or longer, to maintain and sustain designated technologies. Here the performance is largely measured by service levels.

Customer satisfaction should always be a key measure of any provider relationship. While nearly every provider will be technically competent, a significant difference exists in customer responsiveness, problem resolution, and general concern about helping the client succeed, rather than merely complying with contract terms and conditions.

Project-based Purchasing

Brochure

Project Based Purchasing