Plan Sourcing Strategy: Determining External Work Acquisition
PMBOK v8 Definition
Plan Sourcing Strategy is the process of determining the scope, time, cost, quality, and resources required to acquire the final work and deliverables from outside the organization. This process applies to projects where there is a need to use external sources to complete project work. Participants in this process may include the purchasing or procurement department as well as personnel from the buying organization’s legal department. These responsibilities should be documented in the sourcing strategy plan.
Process Group: Planning Process Group
Knowledge Area: Project Procurement Management
Why It Matters for the Exam
This concept frequently appears in PMI exam questions testing your ability to distinguish between make-or-buy decisions and the documentation of procurement responsibilities. Questions often present scenarios where you must identify which document captures sourcing decisions or who should be involved in procurement planning. Expect situational questions asking what to do first when external work is needed.
Key Points to Remember (for the exam)
- Main Output: Sourcing strategy plan (a component of the project management plan)
- Key Participants: Purchasing/procurement department AND legal department personnel
- Core Purpose: Determine which elements will be insourced, outsourced, or both
- Documentation Requirement: Responsibilities must be documented in the sourcing strategy plan
- Key Analysis: Make-or-buy analysis (evaluates risks, need for specialized expertise, desire to avoid expanding permanent employment obligations)
- Procurement Strategy Factors: Delivery methods, type of legally binding agreement(s), procurement phases
- Common Confusion: Sourcing strategy plan vs. procurement management plan—the sourcing strategy plan describes which elements are insourced/outsourced; the procurement management plan describes how procurement is performed
Typical PMI Exam Example
A project manager is planning a new software development project. The organization lacks specialized cybersecurity expertise. The project manager must determine whether to hire permanent employees or contract external experts. Which process should the project manager perform first? Answer: Plan Sourcing Strategy, which includes the make-or-buy analysis to evaluate risks and the need for specialized expertise.
PMI Exam Traps
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Trap: Confusing sourcing strategy plan with procurement management plan
Reality: Sourcing strategy plan describes what to outsource (insource/outsource decisions); procurement management plan describes how to perform procurement activities -
Trap: Thinking only the purchasing department is involved
Reality: Legal department personnel are explicitly mentioned as participants in this process -
Trap: Believing sourcing decisions are a one-time activity
Reality: The sourcing strategy should be revisited regularly to ensure it reflects current capabilities and project needs -
Trap: Assuming all procurement details are in the sourcing strategy plan
Reality: The sourcing strategy plan may or may not include details of how outsourced procurement should be performed
Important PMI Connections
| Related Concept | Relationship Type | Exam Attention Point |
|---|---|---|
| Make-or-Buy Analysis | Input to Plan Sourcing Strategy | Tests understanding that make-or-buy analysis precedes sourcing decisions |
| Procurement Management Plan | Component of Project Management Plan | Tests distinction between sourcing strategy (what) and procurement plan (how) |
| Manage Project Execution | Subsequent Process | Tests sequence: sourcing decisions documented before work execution |
| Project Schedule | Coordination Required | Tests that procurement activities must align with schedule development |
Quick Review Questions
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Which two departments are explicitly mentioned as participants in the Plan Sourcing Strategy process?
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What is the main output document of the Plan Sourcing Strategy process, and is it formal or informal?
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What three factors should be considered when determining the procurement strategy after a make-or-buy decision?
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True or False: The sourcing strategy plan must always contain detailed instructions for performing outsourced procurement.
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Why should the sourcing strategy plan be revisited regularly during the project?
PMBOK v8 Reference
Section 2.1.6.4 – Manage Project Execution (context: Plan Sourcing Strategy is referenced as the process determining external work acquisition)
Section X4.4 – Procurement Strategy (details on delivery methods, agreement types, and procurement phases)
Appendix X4 – Procurement (additional guidance on make-or-buy analysis and procurement strategy)
Exam Tip: Remember the acronym SOLID for sourcing strategy content: Scope, time, cOst, quaLIty, resources, and Delivery method decisions. This helps recall the exact elements PMBOK v8 specifies for determining external work acquisition.