Procurement is the process by which businesses and other organizations purchase goods and services. Because these expenses can have a huge impact on the profitability of a company or the budget of a public entity, a well-managed procurement process is a very important to the overall success of an organization. Thus, procurement typically involves solicitation planning, research into sourcing and potential suppliers, competitive bidding, contract negotiations, and inventory management.
Procurement can be even more complex for multinational corporations or companies with international supply chains, where trade laws and tariffs must be considered on top of pricing and logistical concerns. Public entities may also be subject to additional procurement requirements pertaining to sourcing, including environmental and labor considerations.
Because of the complexity of the procurement process, it typically spans many departments of an organization, including accounting, operations, and sales. C-suite executives may also weigh in on procurement considerations given their importance to overall business strategy.