What is procurement?

Procurement is how an organisation decides what it needs, selects the right supplier, agrees the commercial terms and manages delivery, risk and value throughout the supplier relationship. Buying is one transaction within that wider process.

What procurement covers.

The work starts with a business requirement. It continues through market research, sourcing, supplier evaluation, negotiation and contracting. Purchasing, receipt and invoice payment follow. Supplier performance, obligations, renewal and exit remain part of the job after the agreement is signed.

Price matters, but the lowest quote is not always the best decision. Procurement also considers total cost, delivery, quality, resilience and the consequences of failure. The practical question is whether the supplier arrangement will deliver the outcome the business needs.

For the maintained reference, read the complete procurement guide. Continue with the interactive guide below to explore the lifecycle, documents and a sourcing decision.

Next: direct versus indirect procurement and source-to-pay explained.