Although they are sometimes used interchangeably, acquisition and procurement are two separate resource strategies that, with the use of diverse methods, meet two different needs.
You’ll learn about the main distinctions between each process, its goal, and how to identify them apart in this brief tutorial.
What is procurement?
The process by which corporations find and get products or services from outside vendors in order to accomplish strategic goals, meet operational requirements, or make purchases is known as procurement.
There are numerous steps in the procurement process, including:
-Choosing vendors
-Choosing the best price and terms
-Producing and sending purchase orders
-Taking delivery of goods
-Matching and comparing invoices
-Issuing money in exchange for goods, services, or both
What is acquisition?
Acquisition, which encompasses the design and manufacture of commodities to meet a company’s demands, is the general procedure firms employ to obtain goods and services. The complete lifecycle of the process, including the product, is covered:
-Conceptualization
-Creation or fabrication of designs
-Deployment
-Modification
-Disposal
Businesses that employ this method frequently develop or provide complex systems that combine their own goods with those from outside sources.
Planning for acquisition is necessary given this level of specificity. Several departments work together during this stage of the process to handle issues with time and cost as well as capability needs, design, and technology. The buying process then starts, including reviewing bids, negotiating contracts, and making the actual transaction.
Is acquisition part of procurement?
Simply put, absolutely! The two procedures go hand in hand.
On a slightly larger scale, the initial steps of the procurement process for many firms are comprised of acquisition planning. After all, both procedures identify product requirements and specifications, analyse demands, carefully examine budgets, and set schedules.
What’s the real difference between acquisition and procurement?
Simply said, acquisition is the carefully planned acquisition of resources in all stages of development and assembly that have been properly created for company objectives.
However, the main focus of procurement is finding and purchasing through contracts for external items that are frequently whole and prepared for installation or usage.
Resolve procurement challenges with an automation solution
Acquisition and procurement are vital activities that, if improperly handled or structured, can be time-consuming and irritating. Many firms resort to business process automation to solve these problems, streamline sourcing, and potentially save thousands of hours of labour. (BPA).
With BPA solutions, manual processes like inventory management, receiving and assessing vendor and supplier bids, reconciling invoices, or onboarding new suppliers can be made more efficient and precise.
Utilize BPA solutions to fully realise the advantages of procurement automation to control costs, enhance visibility, and prevent supply chain interruptions. BPA makes it simple to connect and centralise existing systems, workflows, and stakeholder interactions in a single location for greater visibility and control. It also makes it quick to deploy new workflows and process optimisations thanks to its low-code framework and end-to-end integration capabilities.