Sourcing Project Stakeholders: Plan Sourcing Strategy and Stakeholder Engagement

PMBOK v8 Definition

The Plan Sourcing Strategy process entails documenting project sourcing decisions, specifying the source selection approach, determining the scope of work for external sourcing, and selecting the appropriate contracts and sources for delivering the work. The sourcing strategy plan is a component of the project management plan that describes which elements of the project will be insourced, outsourced, or both, based on the desired impact to project value, schedule, risk, finances, or other considerations. The stakeholder engagement plan is a component of the program or project management plan that identifies the strategies and actions required to promote productive involvement of stakeholders in program or project decision-making and execution.

Why It Matters for the Exam

The PMI exam frequently tests your ability to distinguish between sourcing decisions (insource vs. outsource) and stakeholder engagement strategies, as these are often confused. Expect situational questions where you must identify the correct sourcing approach based on project needs, or select the appropriate stakeholder engagement plan component. Questions appear in both the Planning and Executing process groups.

Key Points to Remember (for the exam)

• Main Output: Sourcing strategy plan (component of the project management plan)
• Main Output: Stakeholder engagement plan (component of the program or project management plan)
• Key Decision: Insourcing or outsourcing decisions, based on project value, schedule, risk, finances, or other considerations
• Source Selection Criteria: Capability, past performance, financial stability, compliance with requirements, and alignment with organizational values or sustainability goals
• Common Confusion: Plan Sourcing Strategy is NOT the same as Plan Resource Management—sourcing involves outsourcing project work and deliverables from outside the organization
• Key Participants: Purchasing or procurement department and legal department personnel
• Plan Characteristics: Can be formal or informal, highly detailed or broadly framed, based on project needs and stakeholder expectations

Typical PMI Exam Example

A project manager is planning a software development project. The organization lacks internal expertise for database security testing. The project manager must decide whether to insource or outsource this work, document the rationale based on risk and cost considerations, and define source selection criteria for potential vendors. Which process is being performed?

Answer: Plan Sourcing Strategy process (Section 2.1.6.3)

PMI Exam Traps

• Trap: Confusing Plan Sourcing Strategy with Plan Resource Management

• Reality: Plan Resource Management focuses on internal team resources; Plan Sourcing Strategy focuses on outsourcing work and deliverables from outside the organization

• Trap: Thinking the sourcing strategy plan must include detailed procurement execution steps

• Reality: The sourcing strategy plan may or may not include details of how outsourced procurement should be performed—it is based on project needs

• Trap: Assuming the stakeholder engagement plan is only for external stakeholders

• Reality: The stakeholder engagement plan covers all stakeholders (internal and external) and promotes productive involvement in decision-making and execution

• Trap: Confusing source selection criteria with vendor contract terms

• Reality: Source selection criteria include capability, past performance, financial stability, compliance, and alignment with organizational values—not contract details

Important PMI Connections

Quick Review Questions

1. A project manager is deciding whether to hire an external vendor for quality testing or use internal staff. Which component of the project management plan documents this decision?

2. What are the three key elements that the Plan Sourcing Strategy process determines?

3. A project manager needs to select a vendor based on past performance and financial stability. What are these criteria called in PMBOK v8?

4. What is the difference between the Plan Sourcing Strategy process and the Plan Resource Management process?

5. Can the sourcing strategy plan be informal and broadly framed, or must it always be detailed?

PMBOK v8 Reference

Section 2.1.6.3 – Plan Sourcing Strategy Section 2.1.6.4 – Manage Project Execution Section 2.6.2 – Plan Resource Management