Effects of procurement processes on project execution in a project management company in Cape Town, South Africa

Abstract

The purpose of this study was to unearth the challenges that occur in procurement processes and the effects these challenges have on project execution. Project procurement management is the production of associations with outside merchants and providers for merchandise and enterprises expected to finish a task. This process encompasses five stages: initiating and planning, selecting, contract writing, monitoring, and lastly, closing the deal. To clearly illustrate the magnitude of challenges faced in procurement processes, a project management company in Cape Town, South Africa, has been chosen as the subject of study. This study identified that procurement challenges were rooted in the company’s method of execution which comprises supplier-related issues, strategy selection issues, cost reduction and savings achievement factors, data accuracy issues and stakeholder management concerns. The aforementioned challenges resonate with various theoretical connotations by authorities who maintained that challenges in procurement could be narrowed to four areas: cost reduction, ‘going digital’, risk mitigation and supplier relationships. This study adopted a mixed research methodology incorporating both qualitative and quantitative research techniques and relied on field research conducted both through a survey of administered questionnaires as well as structured interviews. The information gathered in field research has been used to augment and corroborate theoretical information existing in literature and to proffer solutions through pragmatic recommendations for improving procurement processes with the intent of enhancing project execution efficacy and effectiveness. This study further aimed to add input to the existing body of knowledge concerning the effects of procurement processes on project execution in project management and also to contribute to the existing literature in procurement management.