Procurement and Acquisition: Key Differences Explained

Introduction

In business management, “procurement” and “acquisition” are sometimes used interchangeably, but they are different procedures with different goals and methods. Organisations that want to optimise resource management and accomplish strategic goals must understand these two principles. This essay will explain the main distinctions between procurement and acquisition, their purposes and procedures, and how they complement one other.

What is Procurement?

Businesses get goods and services from external providers to meet strategic goals and purchasing requirements.

The procurement process has multiple steps:

• Finding suppliers
• Negotiating best price and conditions
• Purchase order creation and submission
• Getting deliveries
• Invoice reconciliation
• Paying for goods and/or services

What’s acquisition?

Acquisition is how companies receive items and services to meet their needs, including designing and manufacturing them. It covers the complete product lifecycle:

• Conceptualisation
• Design: Creation or production
• Deploy, modify, and dispose.

Businesses that employ this technique generally create or sell multifaceted systems that combine their goods with external sources.

This specificity requires acquisition planning. Multiple departments work together to handle capabilities needs, design, technology, and, most critically, time and cost. Bid review, contract negotiation, and sale follow.

Is acquisition procurement?

The answer is yes! Both processes are interconnected.

Many firms begin procurement with acquisition planning. Both procedures assess demands, audit budgets, set timetables, and define product standards.

What’s the difference between procurement and acquisition?

Simply said, acquisition involves carefully planning to get resources intended for company needs at all phases of production and assembly.

Procurement focusses on contracting for undamaged, ready-to-install external items.

Solve procurement issues with automation.

Acquisition and procurement are vital yet difficult and time-consuming if not handled or planned effectively. Many firms use business process automation to solve these issues, streamline sourcing, and save thousands of hours.

A BPA system like Pipefy may automate inventory management, collecting and analysing supplier/vendor bids, reconciling bills, and onboarding new suppliers for more consistent and accurate outcomes and faster process efficiency.

Pipefy procurement automation helps you reduce expenses, increase visibility, and avoid supply chain interruptions. Pipefy’s no-code framework and end-to-end integration make it easy to streamline complex workflows, quickly deploy new workflows and process optimisations, and connect and centralise systems, workflows, and stakeholder interactions for better visibility and control.

Conclusion

The goals of purchase and purchasing may be similar, but they need to use different methods to reach those goals. Acquisition is the whole process of building and managing complicated systems or products, while procurement is the quick and cheap process of finding and buying goods and services from outside the company. Knowing these differences helps businesses plan and carry out resource strategies that improve operating efficiency and help them reach their business goals. Automating business processes makes things run more smoothly and makes information easier to find.