https://www.techtarget.com/searchcio/definition/procurement-plan
A procurement plan -- also called a procurement management plan -- is a document that is used to manage the process of finding and selecting a vendor. The plan justifies the need for an external supplier and explains how the process of finding a supplier will be performed, from identifying the project requirements to closing the contract.
The goal of a procurement plan is to increase the efficiency, effectiveness and transparency of the procurement process. The document specifically describes how products or services will be acquired and how vendors will be managed during the project.
It includes information such as the types of contracts that will be used, the planned delivery or implementation dates for the contracted products or services, the types of metrics that will be used to evaluate the vendor's performance, and an explanation of how the procurement process will be performed.
Creating a procurement plan helps an organization avoid surprises and last-minute considerations. The document helps leaders decide what to buy, when to buy it and what sources to purchase from. A procurement plan also lets project planners determine if their expectations and requirements are realistic, as well as if the plan can be completed in the proposed project timeline.
Many companies use procurement software to automate and accelerate the procurement processes and optimize their workflow.
Procurement plans can be created for specific technical requirements and projects or for multiple requirements related to different systems. While the details will vary, successful procurement plans will include the following components:
The steps to create an effective procurement plan include the following:
Explain the procurement process. This section of the procurement plan provides an overview of the steps that must be taken to acquire products or services from a supplier as well as an explanation of what must be done to manage the process.
Identify roles and responsibilities. This section of the procurement plan identifies the different people working on the project and all stakeholders who will be affected by the project. The different roles involved in the procurement process include the following:
Identify the procurement needs and requirements. The first section of the procurement plan describes the products or services the organization is looking to acquire. It offers an explanation and justification for why the products or services must be bought from an external supplier instead of internally sourced.
Define the project timeline. This section proposes a timeline for the project and describes the timeframe in which the products or services are needed. Including this section helps project teams better understand when the procurement process should be started and when it needs to be completed by.
Define change approval processes. This section describes the company's change management processes -- specifically, how changes can be made to the procurement process and documentation. The section includes an explanation of how to ensure the changes are necessary, understood and approved by all appropriate people.
Identify vendor management techniques. This section of the procurement plan explains the techniques that will be used to manage vendors once they have signed the contract. The goal of this section is to ensure vendors fulfill their side of the deal and provide the organization with the products or services they've requested at the quality they expect. Vendor management techniques include the following:
Define relevant legal jurisdiction. All legal requirements for the project should be identified to ensure the company and vendor comply with the laws. For example, companies need to consider if they are affected by legislation such as the California Consumer Privacy Act or General Data Protection Regulation and whether the product or service they are considering offers regulatory compliance with the relevant laws. The legal requirements should also be clearly identified to ensure all stakeholders are aware of them and do not violate the legislation.
Identify payment methods. This section identifies the different payment methods and currencies that will be used and accepted during the procurement process. If payments are to be made periodically -- such as monthly or annually -- then the terms for these payments must be detailed to ensure there is no conflict between the organization and vendor regarding how much money is owed.
Explain risk management processes. Working with an external supplier introduces new risks to a project that would not be relevant if the project was internally sourced. This section of the procurement plan details the risk profile of the project, including the following:
The statement of work is an essential element of a company's risk management processes. The SOW defines the necessary project activities, deliverables and timelines that the vendor must follow to fulfill their half of the deal. Providing vendors with a SOW reduces risk by ensuring the supplier knows exactly what is expected of them and when it is expected.
Identify project constraints and limitations. This section of the procurement plan explains all the constraints and limitations that the project team and vendor must deal with. This can include the following:
Procurement plans provide many benefits to organizations that are looking to acquire new products or services from external suppliers. Most notable is the document's help with the management of the procurement process. Other benefits include the following:
Procurement software is a computer program or suite that automates the purchasing and inventory recording processes. Using procurement software, companies can create purchase orders, pay bills, execute online ordering processes and match invoices to the materials that have been received.
Procurement software is grouped into four major categories:
Some of the top P2P software options include the following:
Other offerings include Emburse Professional and ProcurementExpress.com.
Popular RFP software options include the following:
Finally, some of the top spend analysis software options include the following:
07 Jul 2025