Procurement Terms



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Nearshoring refers to the practice of outsourcing business processes or services to companies in neighboring or nearby countries rather than to more distant offshore locations. This can benefit companies seeking to reduce costs while maintaining geographical and cultural proximity to their outsourcing partners. Nearshoring can provide advantages such as similar time zones, ease of communication, shared cultural and linguistic backgrounds, reduced travel costs, and faster response times. Common nearshoring destinations include Mexico and Latin America for companies in the United States and Eastern Europe for Western European companies.
Category Management Procurement Strategy Sourcing
Negotiation is a communication process in which two or more parties engage in discussions to reach an agreement or resolve a conflict. It involves the exchange of proposals and counterproposals, with each party seeking to protect their interests while finding common ground. Negotiation is a key skill in many business contexts, including procurement, sales, and contract management. Effective negotiators are able to understand the needs and perspectives of all parties involved and find creative solutions that satisfy everyone's interests.
Negotiation Sourcing Supplier Management
No Purchase Order (PO), No Pay
No Purchase Order, No Pay, usually No PO, No Pay, is a business policy that refers to the practice of not paying a vendor or supplier for goods or services delivered unless a valid purchase order (PO) has been issued and authorized by the purchasing department or authorized personnel. This policy is intended to help prevent unauthorized purchases or invoices, reduce the risk of fraud, and ensure that all purchases are approved and tracked according to company policy. Essentially, it means that payment will not be made unless a valid PO has been created and approved. In many jurisdictions, the policy can fall foul of common contract law and would not be upheld in court.
Non-compliant Purchasing

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