Procurement Terms



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Independent Sourcing

Maverick spend, sometimes Rogue Spending, Non-compliant Purchasing, Off-contract Buying, Ad-hoc Purchasing or Independent Sourcing, refers to the practice of purchasing goods or services outside of the established procurement policies, procedures, and controls of an organization. This can include purchases made without proper authorization, outside of approved supplier contracts, or without the use of preferred suppliers.

Maverick spend can lead to a range of negative outcomes for an organization, including higher costs, reduced process efficiency, decreased compliance, and increased risk. When purchases are made outside of the established procurement process, it can be difficult for procurement professionals to manage supplier performance effectively, negotiate favorable pricing, or identify opportunities for cost savings.

To address maverick spend, organizations typically implement policies and procedures to promote compliance with procurement policies, and specialized software to help monitor and manage procurement activities. This can include the use of spend analytics, supplier management systems, and e-procurement platforms to streamline the procurement process and improve visibility into purchasing activities.

By reducing maverick spend and increasing compliance with procurement policies, organizations can improve their financial performance, reduce waste and inefficiency, and better manage risk.

Risk Management Spend Analysis
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Indirect Procurement
Indirect procurement refers to the acquisition of goods and services that are not directly related to the production of a company's end product but are necessary to support the business's operations. These can include items such as office supplies, IT equipment, marketing services, travel, and facility management services. Indirect procurement is also known as non-core procurement or indirect spend. Effective management of indirect procurement can help a company control costs, increase efficiency, and improve supplier relationships. Indirect procurement is an important aspect of overall procurement management, and effective management can help a company improve its bottom line.
Procurement Management Procurement Operating Model Procurement Strategy
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Innovation Sourcing
Innovation sourcing in procurement involves collaborating with external partners, such as suppliers, startups, research institutions, or other companies in the industry. By seeking innovative ideas and technologies from external partners, procurement teams can access cutting-edge solutions that can improve the procurement function's performance. Effective innovation sourcing in procurement requires a culture of innovation within the organization, a willingness to collaborate and experiment with external partners, and a structured approach to managing the innovation process. Procurement teams should identify areas where innovation can have the most significant impact and then engage with internal and external stakeholders to generate ideas and implement innovative solutions.
Sourcing Supplier Management
Insourcing, sometimes Onshoring, refers to the practice of bringing business processes or services back in-house to a company's domestic location instead of outsourcing them to external providers, whether offshore or nearshore. This can be done for a variety of reasons, such as a desire to have greater control over business processes, reduce costs associated with outsourcing, or to support local job growth. Insourcing can also be seen as a response to concerns around data privacy and security. For example, in the United States, some government contracts require that data be stored and processed domestically, which has led to an increase in onshoring activities.
Category Management Procurement Strategy Sourcing
Invitation to Tender (ITT)

An invitation to tender (ITT) is a formal invitation to suppliers or vendors to submit a bid for the provision of goods, services, or works. An ITT typically outlines the requirements and specifications of the project, the evaluation criteria, and the submission process for interested parties.

Organizations issue an ITT when they want to procure goods, services or works through a competitive bidding process. The ITT process ensures that the organization can evaluate bids from multiple suppliers and select the best offer based on price, quality, and other factors.

The ITT typically includes information on the scope of work, technical specifications, delivery requirements, and any other relevant details. Interested parties must submit their proposals by a specified deadline, and the organization evaluates the bids based on the criteria outlined in the ITT. The organization may then negotiate with one or more suppliers before selecting the successful bidder and awarding the contract.

An ITT is a common tool used in public procurement and is often required by law or regulation. However, it may also be used by private sector organizations to ensure that they receive competitive bids and select the best supplier for their needs.

Procurement Process Sourcing