Define procurement.

Procurement is the process of acquiring goods, services, or works from an external source. It involves activities such as sourcing, purchasing, negotiating contracts, and managing supplier relationships to ensure that an organization obtains the necessary resources to meet its needs in a cost-effective and efficient manner.

Definition of Procurement

Procurement is the process of acquiring goods, services, or works from an external source to meet an organization's or individual's needs. It involves identifying the need, sourcing suppliers, negotiating contracts, and managing the delivery and payment of the goods or services.

Key Characteristics of Procurement

- External Sourcing: Procurement involves obtaining goods or services from entities outside the organization.
- Needs Fulfillment: Procurement aims to meet specific requirements or needs of an organization.
- Contractual Agreement: Procurement transactions are typically formalized through contracts that outline the terms of the agreement.
- Value Optimization: Procurement professionals strive to achieve the best possible value for the goods or services acquired.
- Supplier Management: Procurement involves managing relationships with suppliers throughout the procurement cycle.
- Process Optimization: Procurement involves implementing efficient and effective processes to streamline the acquisition process.
- Compliance and Risk Management: Procurement adheres to legal, ethical, and compliance requirements, and seeks to minimize risks associated with external sourcing.
- Cost Control: Procurement focuses on managing expenses associated with the acquisition of goods or services.
- Strategic Alignment: Procurement aligns with the broader strategic objectives of the organization.
- Innovation and Sustainability: Procurement can foster innovation and support sustainability initiatives by considering factors such as sustainability and technology.