Procurement and Acquisitions

People do often refer to procurement and acquisition as synonyms but do they mean the same? What is the difference between procurement and acquisition? What makes each term unique?

Keep on reading this article to get the key differences between these two words.

What is Procurement?

It is the process through which goods and services are obtained. It is conducted through bidding, contract, and negotiation. The process includes Sourcing suppliers, confirming, and placing the order, receiving deliveries, payment, and bargaining for the best values and terms, checking and matching the invoices. Procurement is a long process that will be requiring a helping hand in every segment. It is referred to obtaining existing services or assets.

What is acquisition?

The acquisition can take place through buying, hiring, or borrowing. It is referred to obtaining something whether in terms of technology, goods, or services. New assets for the business can be obtained through this process. This process includes the product’s concept, design, production, modification, etc. Various departments come forward to collaborate and to deal with the requirement, design, technology, cost, and time.

Acquisition process models exist in various ways. This process is defined by a sequence of phases with feasible concepts. This process involves recognising and defining the requirement and capabilities along with denoting the best way to meet those requirements.

What is the difference between procurement and Acquisition?

In comparison with how to operate, procurement is easier to deal with. Procurement is a short process as it involves five stages at local, state, or central agencies: requirements, application, evaluation, award, and post-award as the acquisition is a long process. Procurement is wider and end-to-end process of acquiring goods and services, it is a part of the acquisition process as it includes head and follow-up.

The main concern of the acquisition is to secure resources with a proper plan and implementation, along with specifically designing them for business needs at different stages. However, in procurement sourcing and buying with the help of contracts for internal as well as external goods, services, or technology from the supplier is carried out. Procurement is acquiring goods and services but the acquisition is gaining the control over the company’s buying process.

Is acquisition part of the procurement?

Yes, the two processes are closely connected. The acquisition consists of planning which is the preliminary stage of the procurement. They both deal with needs, examination of the budget, fixing schedules, products or services necessities, and conditions.

Summing Up!!!

Acquisition, as well as procurement, are important processes, which take time and resources and need to manage properly to avoid the loss of the organisation. Improper management of these processes turns them into a big headache for the organisation. A small and simple explanation about both processes is noted down: Procurement is the process of obtaining technology, goods, or services by releasing a demand for tenders. The acquisition is acquiring anything by the method to purchase through negotiation.

Hope so this article was productive and gave you a clear idea and difference about the Procurement and Acquisition.

?