While often used interchangeably, procurement and acquisition are two distinct resource strategies that fulfill two different needs with the help of various processes.
In this short guide, you’ll learn about key differences, the purpose of each process, and how to tell them apart in this guide.
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What is procurement?
Procurement is the process businesses use to source and obtain goods/services from external suppliers to achieve strategic objectives and fulfill business needs or purchase requests.
The procurement process includes many steps, including:
- Sourcing suppliers
- Negotiating best value and terms
- Generating and submitting purchase orders
- Receiving deliveries
- Reconciling and matching invoices
- Issuing payment for goods, products, and/or services
What is acquisition?
Acquisition is the overarching process businesses use to get goods and services to fill a company’s needs, which includes the design and production of goods to fill the company’s needs. This process spans the entire lifecycle, including the product:
- Conceptualization
- Design
- Creation or production
- Deployment
- Modification
- Disposal
Businesses that make use of such a process often build or supply multi-faceted systems that integrate their own products with external sources.
This amount of specificity demands acquisition planning. In this stage of the process, multiple departments collaborate to address capability requirements, design, technology, and, most importantly, time and cost. Purchasing then commences, including bid evaluations, contract negotiation, and the final sale.
Is acquisition part of procurement?
In a word, yes! The two processes are closely linked.
Acquisition planning constitutes, on a slightly wider scale, the first stages of the procurement process for many businesses. After all, both processes evaluate needs, closely examine budgets, establish schedules, and identify product requirements and specifications.
Procurement vs. acquisition: What’s the real difference?
Put simply, acquisition includes carefully planning to secure resources in all stages of creation and assembly that have been designed specifically for business needs, including stages of creation and assembly.
The main concern of procurement, however, is sourcing and buying through contracts for external goods that are most often intact and ready to install or use.
Solve procurement challenges with an automation solution
Procurement and acquisition are necessary processes that can be frustrating and a big drain of time and resources if not managed or structured properly. To remedy these headaches, streamline sourcing, and save what could potentially be thousands of working hours, many businesses turn to business process automation (BPA).
With a BPA solution like Pipefy, manual tasks like inventory management, receiving and evaluating supplier/vendor bids, reconciling invoices, or onboarding new suppliers can be automated for more consistent and accurate results and higher process efficiency.
Unlock the benefits of procurement automation with Pipefy to contain costs, improve visibility, and stay ahead of supply chain disruptions. With its no-code framework and end-to-end integration capabilities, Pipefy makes it easy to streamline complex workflows, quickly deploy new workflows and process optimizations, and connect and centralize existing systems, workflows, and stakeholder interactions in a single place for higher visibility and control.
