The prime objective of procurement is to save cost and supply the requirement of the business in the most convenient and conventional ways. Deriving through the same, the main objective of procurement management is to process an errorless system for the procurement process.
Procurement management is the process of obtaining goods or services for a business through the acts of purchasing, renting, or contracting with an external resource to complete a project.
This process involves a variety of procurement activities, which can include identifying the needs of a project, sourcing potential options, submitting a request for proposals (RFPs) if needed, and administering procurements back to the team. This process may be done by a team separate from the one requesting the product or service in an effort to protect the company from any potential risk. However, always check with your internal legal team to confirm the specific procurement process at your organization.
Procurement teams are typically experts in contract management. Your internal procurement team will likely be the one responsible for negotiating contracts to best fit your company’s needs, negotiating pricing and packaging information with your potential partner, and running a risk analysis to protect your company from any potential threats.
There are typically two main sides to procurement: the front-end strategic sourcing and the operational side of procurement management.
Front-end sourcing is how the team goes about identifying the different partners and businesses that your company wants to work with. This process usually involves setting minimum qualifications that potential vendors should meet and identifying why the company needs to bring a third-party vendor in for a project.
The operational component of procurement management is the individual steps a company needs to take to begin working with a third party. These steps vary depending on your internal company practices, but they may include using purchase orders, submitting RFPs, choosing bidders, or going through a quoting process.